Delta variant spooking crypto markets? Fresh warning on crypto payments

Transcript

Welcome to The Daily Forkast, July 9th, 2021. I’m Justin Solomon of Forkast.News, covering all things blockchain, filling in for Editor-in-Chief Angie Lau.

Coming up, could the Delta variant spook crypto markets? Thailand’s central bank issues a warning against crypto payments, and a third major bank in South Korea enters the nation’s crypto custody roster. Let’s get you up to speed from Asia to the world.

The worrying rise in numbers of Covid Delta variant cases around the world could put the global economic re-opening into reverse.

Just this week, a newly issued state of emergency in Tokyo has led to a ban on any spectators at Olympic events that are set to take place in the city beginning on July 23rd. It’s also resulted in traditional markets taking a dive as investors worry about the impact on global growth. But could that caution hit crypto markets next? If so, we could see a rise in Bitcoin dominance as investors move towards assets they deem safer havens.

One analyst told Forkast.News that may already be happening.

“Bitcoin dominance had been edging lower for the past week or so, and then it kind of bounced back up, walking back on two days of losses. That essentially signals people are transitioning from us and towards Bitcoin.”

And while some investors may be thinking twice about the investment potential of digital assets, it seems that crypto as a payment tool is gaining steam, but that’s getting more authorities around the Asia-Pacific region worried.

Thailand’s central bank is the latest to issue a warning against the use of digital assets for payments. But just last week, Forkast.News Reported that Thailand-headquartered luxury hotel group Pavilion Hotels & Resorts had made moves to accept crypto for payments. Now the Bank of Thailand has issued a statement reiterating that digital assets are not legal tender. The bank has also warned that both parties involved in any crypto transaction face the risk of price volatility, cyber theft, and money laundering. The statement goes on to say that if digital assets gain widespread use, the bank will coordinate with the country’s Securities and Exchange Commission in order to take measures to ensure crypto does not pose extensive risks to the public or financial system.

And taking a quick look at the market now, Bitcoin closing up nearly one and a quarter percent to end the day just shy of US$32,900. That’s as of 4 p.m. Hong Kong time. And in the top 10 for cryptocurrencies, a mixed day across the board. Ethereum. taking the biggest hit, though, down 2.7% at the end of Asian trading hours here in Hong Kong.

Finally today, one of South Korea’s five major banks, NH Nonghyup is branching out into digital asset custody and NFTs. The bank signed an MOU with digital payment service Galaxia and Moneytree, credit card value-added network service KICC, and blockchain developer Hexlant to develop a digital asset custody service.

The joint effort will focus on developing digital asset custody with Hexlant’s blockchain-based wallet. NH is the third major Korean bank to jump into crypto custody after KB Kookmin and Shinhan Bank took the lead earlier this year.

NH is also developing a way to link users to NFTs and security token offerings, which is a public offering of tokenized digital securities. This is something that neither of its banking peers and crypto custody has tried yet. So what can we look forward to in the future of banking?

Professor Park Sung-jun of Dongguk University Blockchain Research Center explains.

“Currently in CeFi, ordinary consumers are given limited choices in financial products. In fact, there are only a few that ordinary people can participate in. But to my knowledge [the choices] in DeFi services using blockchain are infinite.”

NH is not only one of the largest banks in Korea, but also one of the few that support crypto exchanges. The bank backs Bithumb and Coinone by providing real-name bank accounts for their users.

This banking partnership is one of the major requirements that enables exchanges to apply for a license with local authorities. Those that are unable to woo banks such as NH will be forced to shut down following the September 24th deadline.

And that’s The Daily Forkast from our vantage point right here in Asia. For more, visit Forkast.News. I’m Justin Solomon of Forkast.News. Until next time.