Blockchain Asia | #19

"Asia's Crypto Landscape" report/Risks facing Tether/Mining in China/Thai SEC to decide qualifications for crypto investment; SCB 10X investment in Anchorage/SBI's ambition/S. Korea ready for CBDC

Hello, I am Coco Kee. Welcome to #19 Blockchain Asia. This is the first newsletter of the Year of the Ox, a Zodiac sign that symbolizes strength, hard work and gentleness. May the Year of the Ox be rewarding for all of you.


Market snapshot

Asia’s Crypto Landscape” authored by Mira Christano of Messari is by far the most comprehensive report that covers exchanges, market makers, funds, regulations and trends in key Asian markets.

Here are some highlights from the report:

  • 6 out of the top 10 largest crypto unicorns were located in Asia by the end of 2020

  • Asian companies account for 98% of ETH and 94% BTC futures volumes

  • As of January 12, of the top 20 token projects with headquarters, 42% of the market capitalization is based in Asia

  • China controls 65% of bitcoin’s hashrate

For those who do not have time to go through the report, I highly recommend Laura Shin’s podcast interview with Mira Christano “Why Asia is Critical to Crypto

Risks facing Tether. The legal case of Bitfinex and Tether had been like a Sword of Damocles hanging over the crypto industry. Tether is the most used stablecoin in the world, in particular, in Asia. If investors for some reason, are not willing or able to use Tether, that would affect the liquidity of the crypto market. What a relief to see the case is settled with New York State’s Attorney General’s Office.

It does not mean Tether is 100% out of the woods. Another potential risk may come from China’s CBDC DC/EP. Once DC/EP is officially launched China’s central bank may then move to root out Tether outright. Since China has banned its citizens from trading crypto with fiat, Tether has served as an intermediary through OTC markets.


Chinese mining business

BTC.com merged into 500.com

Bitmain’s CEO and Chairman Jihan Wu resigned from the company, ending an extensive dispute with one of the co-founders. Shortly after that, mining pool BTC.com and its related businesses, valued at around $1.8 billion, mostly owned by Jihan Wu, is acquired by 500.com through a stock swap.

500.com, an NYSE-listed Chinese online sports lottery service provider(ticker: WBAI), after struggling for years, started to pivot to being a crypto mining-related business a couple of years ago through the acquisition of Loto Interactive and mining rigs. BTC.com’s latest hashrate is 18.65 EH/s.

With the completion of a stock swap in April, Jihan Wu will become the second-largest shareholder and the company will change its name to BIT Mining Limited.

Through this publicly traded entity, Jihan Wu would be able to further consolidate the businesses of mining rigs, mining pool, crypto wallet, and mining financing. His priority is to reclaim the leading position of bitcoin mining hashrate.

MicroBT eyeing IPO in the U.S.

One of Bitmain’s major rivals MicroBT plans to go IPO in the U.S. in 2021. MicroBT and Bitmain have been engaged in legal battles for some time. MicroBT expects to see its revenue grow to $1 billion in 2021.

China’s Inner Mongolia to ban mining activities

To reduce energy consumption, Inner Mongolia’s local government has issued a decree to shut down crypto mining businesses by April.

Different from Sichuan, where abundant hydropower supports the mining business in rainy seasons, Inner Mongolia relies on coal to generate electricity.

Besides, most of the mining companies operate as data centers in disguise, evading income tax from crypto mining, which does not motivate local governments to support their operations.

Will other provinces such as Xinjiang, another place that miners relocate their mining farms to in the dry season, follow in the footsteps of Inner Mongolia? If so, where else can miners go in dry seasons? Right now, most Chinese miners are not concerned, believing the case of Inner Mongolia is an isolated situation. Let’s see.


Rundowns by country

Thailand
SCB 10X invested in Anchorage

The venture arm of the oldest Thai bank Siam Commercial Bank invested in Anchorage, a crypto custodian and digital asset platform that received the first federal digital asset conditional bank charter from OCC.

Thai SEC conducting public hearing about crypto investors qualifications

A public hearing hosted by Thai SEC is underway to finalize requirements for Thai people who want to trade crypto.


Japan
SBI’s investment in Swiss digital asset bank Sygnum

Sygnum received an 8-figure investment from SBI Digital Assets Holdings.

SBI’s reveals its global ambition for digital assets

SBI plans to link Osaka Digital Exchange it has been building with London Stock Exchange.

SBI eyeing the formation of a JV

SBI is considering either form a joint venture or acquire a leading foreign company to be a dominant player in the crypto space.


South Korea
South Korea ready for CBDC

Shinhan Bank has developed a pilot blockchain-based platform in preparation for the central bank to issue CBDC.

Gain from crypto taxed by 20%

South Korea set the date Jan. 1 2022 to start collecting tax from crypto investment gains above $2300. The tax rate is 20%.

Thank you, till next issue.


In the innovative blockchain/crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain Asia helps you stay on top of what is going on in the Far East.

Blockchain Asia covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, new deals and company highlights. Content is selective and curated.

I am the co-founder of Kee Global Advisors. For the past 2+ decades, I have been working in both the U.S. and Asia. A bilingual, I enjoy writing “Blockchain Asia” here in English, while blogging on WeChat’s mobile publishing platform in Chinese.

For previous posts, please visit here. Please email insight@keeglobaladvisors.com with any ideas or thoughts. Would love to hear from you!

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