China

Chinese government plans for blockchain-based identity verification

The Chinese Ministry of Public Security plans to implement a blockchain-based identity verification system that it claims will help keep personal data and identity credentials safe.

The Chinese Ministry of Public Security plans to roll out a new blockchain-based platform called RealDID to verify the real-name identities of its citizens. 

According to a press release for an event held on Dec. 12 by the Blockchain Service Network (BSN), a Chinese blockchain firm, the project, planned with the Chinese government, will have multiple use cases. These include personal real name confirmation, personal data encrypted protection and certification, private logins, business identities, personal identification certificate services and information vouchers on personal identity.

The application will allow Chinese citizens to register and log into online portals anonymously using DID addresses, which will ensure transactions and data remain private between individuals and businesses.

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Chinese government plans blockchain-based identity verification

The Chinese Ministry of Public Security plans to implement a blockchain-based identity verification system that it claims will help keep personal data and identity credentials safe.

The Chinese Ministry of Public Security plans to roll out a new blockchain-based platform called RealDID to verify the real-name identities of its citizens. 

According to a press release for an event held on Dec. 12 by the Blockchain Service Network (BSN), a Chinese blockchain firm, the project, planned with the Chinese government, will have multiple use cases.

These include personal real name confirmation, personal data encrypted protection and certification, private logins, business identities, personal identification certificate services, and information vouchers on personal identity.

Read more

China’s state-affiliated banks onboarding crypto companies in Hong Kong

Chinese banks are opening bank accounts for regulated crypto companies, with several acting as a payment layer for the crypto platforms.

Hong Kong’s push to become a crypto hub has opened an opportunity for not just crypto companies but many state-affiliated banks in China. The Chinese banks have shown interest in building partnerships and onboarding regulated crypto companies in Hong Kong, despite a blanket bank on crypto-related activities in mainland China.

The Hong Kong arm of the major Chinese state-owned Bank of Communications is collaborating with several cryptocurrency businesses registered in the city. The bank is in talks to open accounts for regulated companies, according to a report published in The Wall Street Journal.

In addition to the Bank of Communications, ZA Bank — Hong Kong’s largest virtual bank controlled by Chinese internet insurer ZhongAn Online P&C Insurance — will also act as the settlement bank for the crypto companies. The banks will together facilitate the depositing and withdrawal of fiat currencies.

Along with providing account services to cryptocurrency businesses, these banks will serve as settlement banks to enable token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan and U.S. dollars.

At the start of the year, Hong Kong’s financial secretary Paul Chan clarified that the city is pushing to collaborate with more crypto firms in 2023. As a result of the government’s progressive crypto approach, nearly 80 cryptocurrency firms have shown interest in opening or expanding their business in the city. The government’s crypto push has attracted some surprising allies in the form of Chinese banks and funds.

Related: Hong Kong’s crypto rules set a high bar for good reason

As Cointelegraph reported, besides onboarding crypto companies and opening bank accounts for regulated firms, the Chinese government-backed CPIC Investment Management launched two crypto funds. CPIC is the second-largest insurance firm in mainland China, and its newly launched crypto funds are focused on institutional investors

China’s growing interest in crypto via Hong Kong has surprised many in the crypto ecosystem, as the country has carried out multiple crackdowns on crypto-related activities in mainland China. 

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Metalpha raising $100M to offer Grayscale Bitcoin products in Hong Kong

Metalpha has secured $20 million out of the planned $100 million for its new fund from overseas Chinese investors, the CEO said.

Hong Kong-based cryptocurrency wealth manager Metalpha Technology is working to offer new entry points into Bitcoin (BTC) and Web3 to investors in Asia.

Metalpha is raising a $100 million fund to invest in Bitcoin and other crypto products from the major United States-based crypto asset manager, Grayscale Investments. The new fund aims to help Chinese investors get a regulated channel to invest in cryptocurrencies and Web3, Bloomberg reported on April 12.

Known as the Next Generation Fund I, Metalpha’s upcoming investment project is launched in partnership with NextGen Digital Ventures. The fund will invest directly in Grayscale’s crypto investment products and indirectly through structured derivatives related to Grayscale’s products, allowing institutions and high-net-worth individuals to get indirect exposure to crypto.

According to Metalpha founder and CEO Adrian Wang, the company has secured $20 million for its new fund since March. He said that the fund had attracted many Chinese investors, stating:

“A lot of our clients are family offices with traditional backgrounds, rather than pure crypto or pure Web3 native investors […] It’s overseas Chinese institutions — some of them are family offices, some of them are public companies.”

Wang also noted that Metalpha had seen increased demand for its products recently, which followed a series of difficulties connected to the bear market of 2022 and the collapse of the FTX crypto exchange. “A lot of clients hesitated to place new orders, but now it’s getting much better,” Wang stated, adding that a lot of new traffic is coming in, and people are gaining more confidence now.

Related: Chinese state insurance firm launches two crypto funds in Hong Kong: Report

Founded in 2015, Metalpha was initially known as Dragon Victory International, offering supply chain management platform services and cryptocurrency derivatives product services in Hong Kong. The firm rebranded to Metalpha in late 2022, soon after receiving a Nasdaq notification regarding minimum bid price deficiency. Metalpha regained compliance with Nasdaq’s listing rules as of April 2023.

Metalpha is backed by Singapore-based venture capital firm Antalpha, which has been reportedly working with the Chinese crypto mining firm Bitmain to offer low-interest loans to crypto miners.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim

Tech giant Alibaba to roll out ChatGPT competitor AI

Tongyi Qianwen, the company’s AI chatbot, will be rolled out in the near future and integrated with Alibaba’s tech ecosystem.

Chinese e-commerce giant enters the global artificial intelligence (AI) race with its own version of a chatbot assistant. Alibaba announced the rollout of the ChatGPT-like product in the “near future.”

According to a BBC report from April 11, the new product will be called Tongyi Qianwen, which translates to English as “seeking an answer by asking a thousand questions.“ The chatbot will be integrated with Alibaba’s vast ecosystem of tech businesses, including the workplace messaging app, DingTalk, and voice assistant smart speaker, Tmall Genie.

The chatbot will be able to communicate in English and Mandarin at the first stage. Its task scope includes turning conversations into written notes, writing emails and drafting business proposals. The main intrigue, however, is whether Tongyi Qianwen could work on more creative tasks like its American counterpart.

ChatGPT was released by OpenAI in November 2022 and later integrated into the Microsoft’s internet browser, Bing. Generative AI made global headlines due to its ability to provide sophisticated information responses in a casual chat-like manner, mimic different writing styles by command and ultimately help users to create all kinds of texts, from academic research to movie scripts.

Related: How to use ChatGPT to learn a language

Earlier, Google’s parent company, Alphabet and Chinese tech behemoth, Baidu, announced the development of their versions of AI chatbots named Bard and Ernie, respectively.

Meanwhile, the Cyberspace Administration of China will require chatbot developers to ensure that AI-generated content is “accurate” and doesn’t “endanger security.” According to article four of its guidelines, once made open for public feedback on April 11, such content should “reflect the core values ​​of socialism, and must not contain subversion of state power.”

Magazine: AI and blockchain could transform the courtroom

Chinese authorities to enforce security reviews for AI services

China intends to introduce a new security review mandate for all generative AI services before operation as new chatbots like ChatGPT continue to surface.

Governments around the world are finding themselves face-to-face with questions on how to handle the swift rise of artificial intelligence (AI).

In China, local authorities announced they plan to enforce a mandatory review of generative AI services before public operation.

According to a statement on the website of the Cyberspace Administration of China — China’s internet regulator — providers of AI services have a responsibility to ensure all content is accurate, respects intellectual property (IP) and does not discriminate or endanger security.

Additionally, all AI-generated content must be clearly labeled as such.

These announcements come after one of China’s largest tech companies, Baidu, unveiled its new AI chatbot, “Ernie,” rivaling that of OpenAI’s ChatGPT in late March.

The chatbot is built from an AI-based deep learning model, Ernie, which stands for “enhanced representation through knowledge integration.” In addition to Baidu’s AI chatbot, other Chinese tech giants, like Alibaba and SenseTime, are all in the race to build out AI platforms rivaling those of Google and Microsoft.

Related: Midjourney AI users find workaround amid ban on images of Chinese president

Like the Chinese authorities, many governments worldwide are finding their footing in dealing with the rise in AI services. 

Recently, Japan openly showed its support for OpenAI’s ChatGPT. The Japanese government said it would even consider incorporating AI technology into its governmental systems so long as privacy and cybersecurity concerns are addressed.

However, other countries are not taking as keen of a stance on this emerging technology. Italian regulators temporarily banned ChatGPT following a data breach on the platform that exposed private user data. In Canada, OpenAI faces a privacy probe after allegations of harvesting personal information.

United States President Joe Biden also recently addressed tech firms to consider the risks of AI to society, national security and the economy.

Magazine: Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis: Asia Express

Bitcoin mining firm Bitmain reportedly fined for tax violations in China

Bitmain has reportedly failed to pay personal income taxes in accordance with China’s laws on the administration of tax collection.

Beijing-based cryptocurrency mining firm Bitmain has reportedly violated tax regulations in China, with local authorities imposing major fines.

Bitmain Technologies has been slapped with a tax penalty from the Beijing Municipal Office of the State Administration of Taxation, the local news agency Sina Finance reported on April 11.

The authority fined Bitmain about 25 million Chinese yuan ($3.7 million), the report notes, citing details from China’s data registry of private and public companies, Qichacha.

According to the data, Bitmain was penalized on April 4, 2023, with the firm allegedly failing to pay personal income taxes in accordance with China’s laws on the administration of tax collection. The statement specifically referred to certain violations related to taxes on the income from Bitmain employees’ salaries, bonuses, labor dividends, allowances and more.

The tax authority also mentioned that tax inspectors delivered notice on certain tax violations to Bitmain in August 2022. So far, Bitmain’s Beijing unit has failed to pay personal income tax totaling 16.6 million yuan, or $2.4 million.

Founded in 2013, Bitmain is one of the world’s largest cryptocurrency mining companies, widely known for manufacturing crypto mining-specific hardware and solutions. The company was reportedly forced to stop its business in China in October 2021 in response to a blanket ban on crypto imposed by the Chinese government in September 2021.

It’s unclear how the firm has been running its operations since. Bitmain did not immediately respond to Cointelegraph’s request for comment.

Related: Bitcoin proponents respond to New York Times’ BTC mining report

Despite regulatory uncertainty and a major bear crypto market in 2022, Bitmain’s business has continued to see success. In December 2022, Bitmain’s latest Antminer device reportedly sold out in less than a minute despite tanking mining profitability.

In September 2022, Bitmain founder Jihan Wu set up a $250 million fund to support the mining industry affected by the prolonged cryptocurrency winter. After leaving Bitmain in 2021, Wu founded Bitdeer, a new crypto mining firm and a spin-off of Bitmain.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim

Hong Kong takes the lead in blockchain logistics after Maersk TradeLens demise

China and Hong Kong are pouring money into the blockchain logistics industry to take the lead.

After Danish logistics firm Maersk terminated its blockchain-based supply chain platform last year, industry builders have not given up on blockchain applications in global trade.

Hong Kong-based Global Shipping Business Network (GSBN), a nonprofit consortium focused on blockchain trade applications, is bullish on blockchain as a crucial logistics tool in the long term.

According to a report by the South China Morning Post, GSBN currently operates one of the world’s largest platforms that can be described as an alternative to Maersk’s TradeLens tool. The platform is based on a permissioned blockchain with strong data governance, allowing only authorized parties to contribute and consume shipping-related data.

Since launching its blockchain-based shipping platform in 2021, GSBN has tapped major shipping partners like Cosco, Orient Overseas Container Line and Hapag-Lloyd. The organization has also reached partnerships with terminal operators like Hutchison Ports, SPG Qingdao Port, PSA International, Shanghai International Port Group and Cosco Shipping Ports.

Among the members, only German Hapag-Lloyd and Singaporean PSA International are not based in mainland China or Hong Kong.

Despite major industry firms like Maersk terminating similar projects, GSBN CEO Bertrand Chen is confident that blockchain has yet to catch on, and its adoption may take another decade.

“I think for a lot of people, the clear understanding is this industry has digitized,” Chen said, arguing that there’s no chance that global trade will continue using “pen and paper” by 2032. According to the executive, blockchain has the potential to help the industry transform in response to triggers of supply issues like COVID-19. He stated:

“Because of COVID-19, because you have to change the process, I think this is one of the regular use cases of blockchain […] Probably that’s better than NFTs of digital art. NFTs of documents for global trade — this will be the real killer use case.”

The executive suggested that China was taking the lead in blockchain logistics because the country has been pouring money into the industry. He also acknowledged that many local blockchain solutions have so far been highly specific to China.

Related: Hong Kong’s crypto rules set a high bar for ‘good reason,’ says SFC adviser

“When you throw so much money in one sector because it’s a policy, you’re bound potentially to be able to get lucky,” Chen said. He added that China’s investment in blockchain development would benefit GSBN by generating more potential partners for the firm.

The GSBN CEO also said the organization has global ambitions and is working to attract more European shipping lines. The nonprofit even hopes to onboard Maersk one day but admits that such a scenario “may be slightly challenging,” Chen noted.

Hong Kong has been increasingly emerging as a major Web3 and cryptocurrency hub over the past few months, with the local government taking action to adopt clear industry regulations. Despite a blanket ban on crypto in China, some Chinese government-related firms have reportedly been growing interested in crypto investment, with state-owned firms like CPIC launching crypto-related funds in early April.

Magazine: Asia Express: Zhu Su’s exchange did $13.64 in volume akshually, Huobi

Conflux proposes deploying Uniswap v3, setting up $2M liquidity pool for CFX pairs

Following the expiration of the Uniswap v3 code license on April 1, Conflux seeks to deploy the decentralized crypto trading protocol on its network.

Conflux, a regulatory-compliant public blockchain based in China, seeks to deploy Uniswap v3 on its network, according to a proposal on Uniswap’s governance forum on April 7. The move comes days after the Uniswap v3 code license expired, enabling developers to fork the protocol and deploy their own decentralized exchange.

As per the proposal, the deployment would provide “access to millions of potential new users, particularly in the Chinese and Asian markets.” According to Conflux, the blockchain experienced a spike in traffic in the first quarter of 2023. The network has a market capitalization of nearly $1 billion and has $45 million in total value locked on-chain. 

“Currently, 84% of worldwide blockchain applications are submitted in China. Compared to the UK and the US, 11% and 14%. […] This shows that China is one of the most mature markets in Web3, and exposure is important for all projects,” said Conflux in the proposal.

Regulatory crackdowns in the United States and Europe would also benefit the crypto industry’s growth in Asian markets, claimed Conflux, noting that over 80 crypto companies are planning to establish an office in Hong Kong, providing a crypto bridge to mainland China.

Ambre Soubiran, CEO of institutional crypto market data provider Kaiko, holds a similar view. “The U.S. being more stringent these days than ever on crypto and Hong Kong regulating in a more favorable way […] is going to clearly shift the center of gravity of crypto assets trading and investments more towards Hong Kong,” he noted in a recent interview.

Aside from potential market reach, incentives offered for projects building on top of Uniswap v3 on the Conflux Network are the creation of liquidity pools for CFX token trading pairs — specifically, CFX-USDT, CFX-BTC, and CFX-ETH. These liquidity pools would be worth $2 million and locked for two years. The Conflux Foundation would also provide $1 million in “liquidity incentives.”

Conflux is a layer-1 blockchain operating using a hybrid proof-of-work and proof-of-stake mechanism. In a recent development, the network announced a partnership with China Telecom to develop a blockchain SIM (BSIM) card. The BSIM will offer a secure place to store digital private keys and will be able to call upon the said signature to transfer money to other users. In addition, a “one-click direct check” functionality will allow users to check for transaction information and status progress in real time.

Magazine: Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis – Asia Express

Chinese state insurance firm launches two crypto funds in Hong Kong: Report

The Chinese government-backed CPIC Investment Management is launching two crypto funds related to blockchain investment and staking.

The Chinese government appears to be more bullish on the cryptocurrency industry than one might think, as a major state company is reportedly launching new cryptocurrency funds.

CPIC Investment Management, a subsidiary of China Pacific Insurance (CPI), is launching two crypto funds in partnership with the investment firm Waterdrip Capital, the local tech-focused news agency 36Kr reported on April 3.

Owned by the central government of China, the Shanghai municipal government and China Securities Finance, CPI is the second largest property insurance company in mainland China after the People’s Insurance Company of China.

The new crypto funds reportedly include a venture capital fund called the Pacific Waterdrip Digital Asset Fund I, which will focus on investments in early-stage blockchain projects. The second fund, the Pacific Waterdrip Digital Asset Fund II, will reportedly manage proof-of-stake digital assets.

According to the report, the new crypto funds will target institutional and wealthy private investors.

Waterdrip is a global investment institution supporting blockchain-related projects and crypto startups. Founded in 2017, Waterdrip is known for supporting the Chinese crypto mining industry and investing in projects like Polkadot-based decentralized Web3 network Peaq.

Related: Hong Kong’s crypto rules set a high bar for ‘good reason,’ says SFC adviser

The firm took to Twitter to confirm the news on Monday, stating that the launch of the two joint crypto funds relates to the implementation of incentive policies related to virtual assets by the Hong Kong government.

CPIC did not immediately respond to Cointelegraph’s request for comment. The article will be updated pending new information. 

The news comes amid the government of Hong Kong growing increasingly committed to developing local cryptocurrency infrastructure, distinguishing its crypto regulation approach from China’s crypto ban enforced in 2021. In late March, online reports suggested that some crypto firms in Hong Kong have been increasingly attracting interest from Chinese state-owned banks.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim