• Tencent Cloud, the cloud service business of China’s largest Internet company, announced its full entry into WEB3.
• The firm has also reinforced its Web3 speculations through foundations of future partnerships with leading Web3 brands.
• Tencent Cloud has partnered with Ankr, Avalanche, Scroll, and Sui to develop blockchain API services and deploy nodes on Tencent Cloud.
Tencent Cloud Entering Web3
Tencent Holdings’ cloud service provider, Tencent Cloud, announced its interest in Web3 on Feb. 22. The company is targeting pillars such as storage, security, identity, data and analytics in order to provide virtual experiences for brands, organizations, companies and governments around the globe. They plan to do this by developing a full suite of blockchain API services as well as debuting the Tencent Cloud Metaverse-in-a-Box offerings.
Partnerships With Leading Web3 Brands
Tencent Cloud has signed a memorandum of understanding (MoU) with Ankr to develop blockchain API services and an alliance with Avalanche to deploy nodes on Tencent Cloud which will enable developers set up nodes quickly. Additionally it is partnering with Scroll and Sui for further cooperation.
Senior Vice President’s Statement
Poshu Yeung – Senior Vice President at Tencent Cloud – acknowledged the potential that exists where physical and digital worlds meet during the first Global Web3 Summit. He noted that the firm would be commencing virtual projects while leveraging their experience in technical support to grow the virtual space further.
New Products Unveiled
Tencent Cloud is unveiling new virtual experiences by releasing their new product ‘Tencent Cloud Metaverse-in-a-Box’ which will improve online users’ experience as well as developers’ experience too.
Tencent Cloud entering web 3 is a big step forward for both them and their partners who have collaborated in order to bring forth this project successfully. The partnerships that have been established are likely to lead towards increased efficiency within the system while opening up various opportunities for growth too!
• The US Securities and Exchange Commission (SEC) is proposing to introduce new rules that could make it harder for crypto firms to act as qualified custodians.
• A five-member SEC panel will vote on the proposal on Feb. 15 and a majority vote of three out of five is needed for the proposal to proceed.
• If approved, the SEC’s proposed rule changes would mean that entities that work with crypto firms will have to move their clients’ holdings elsewhere.
Proposed Rule Changes by the US SEC
The US Securities and Exchange Commission (SEC) plans to propose new regulations this week that could affect the services crypto firms offer their clients. According to people familiar with the matter, the SEC plans to propose rule changes on Wednesday that could make it harder for crypto firms to hold digital assets for their clients.
A five-member SEC panel will vote on the proposal on Feb. 15 and a majority vote of three out of five is required in order for it to proceed. If passed, the proposal will be voted on officially by the rest of the SEC and amended with feedback if approved.
Potential Impact of New Regulations
If implemented, hedge funds, private equity firms, and pension funds could have a more challenging time working with crypto firms as they are required to use qualified custodians to hold their clients’ assets. Therefore, if this rule passes through all stages, entities that work with crypto firms will have to move their clients’ holdings elsewhere.
In 2020, an SEC staff said that they were grappling with who could be a qualified custodian of digital assets and requested public feedback regarding this issue. This proposed change aligns with the agency’s plan to reduce any risks posed by cryptocurrencies in relation to broader financial systems after several spectacular failures from crypto companies occurred in 2022, such as FTX exchange and Voyager Digital brokerages.
After approval from its initial voting process, this proposed rule change must then go through public participation before being voted upon again by all members of the SEC in order for it take effect officially.
• The Financial Services Commission (FSC) of South Korea published rules outlining which digital assets will be regulated as securities in the country.
• Assets that fit into this category are those used for staking to derive dividends and assets like stablecoins fall outside this category.
• South Korea has been actively engaging in the crypto ecosystem, with plans to build the world’s first decentralized digital commodity market and launch a ‘virtual currency tracking system’ to curb money laundering.
South Korean Regulatory Body Publishes Security Token Guidelines
The Financial Services Commission (FSC) of South Korea published rules on January 6th 2021 outlining which digital assets will be regulated as securities in the country. According to these guidelines, all blockchain-based tokens that have characteristics that fit them into the country’s capital market act will be treated and regulated as securities, while assets such as stablecoins will operate following upcoming digital asset regulations.
Assessment of Crypto-Related Financial Assets
The FSC stated that cryptocurrency and other digital asset security-like financial assets will be assessed on a case-by-case basis and issuers and brokers, such as crypto exchanges, will be held accountable for evaluating them according to such rules. These new guidelines support innovation while ensuring consumer protection at the same time.
Korea’s Supportive Disposition towards Crypto
South Korea has been one of the countries with robust engagements in the cryptocurrency ecosystem. The government has allocated four billion Korean won to develop a blockchain-based virtual power plant; during a national assembly policy discussion on Initial Coin Offerings (ICOs), it was highlighted that an internationally consistent crypto regulatory framework is needed; Busan declared it would build the world’s first decentralized digital commodity market by H2 2023; and recently, the Ministry of Justice announced its plan to launch a ‘Virtual Currency Tracking System’ for money laundering prevention purposes.
Timeline for Legalization
The first half of 2023 is expected to focus more on promotional activities and institutionalization through submitting drafted guidelines for assessments ahead of proposed legalization of cryptocurrencies in South Korea.
These new security token guidelines from FSC are an important step towards establishing an effective regulatory framework for cryptocurrencies in South Korea, promoting innovation while simultaneously ensuring consumer protection. The timeline for legalizing cryptocurrencies is expected to begin during early 2023.