Fintech

Blockchain fintech GammaRey signs $320M merger agreement

GammaRey said it has nearly $800 million in consumer assets.

According to a Jan. 3 announcement, blockchain fintech firm GammaRey has signed a merger agreement with financial e-commerce and consumer data analytics company GoLogiq. Both companies are based in the U.S., although GoLogiq focuses on customers in Southeast Asia. 

As stipulated by the terms, GoLogiq will issue $320 million in common stock to acquire 100% of GammaRey’s outstanding shares. The transaction is anticipated to be completed within the next few weeks, subject to conditions. The two parties said the merger aims to “focus on the high-growth market of wealth management for Generation Z and Millennials.” Brent Suen, chairman of GoLogiq, commented:

“Through this highly synergistic merger, we will have achieved our goal for GoLogiq to become a comprehensive fintech platform for underserved businesses and consumers that is generating strong revenue growth and cash flow.”

Suen also disclosed that GoLogiq is in the late stages of completing a new acquisition target with more than $9 billion in managed assets introduced by GammaRey. The two parties have set a guidance of more than $50 million in annualized revenue for 2023 upon deal completion.

Based in New York, GammaRey focuses on consumer digital wallets and developer software. The private company said that it is a “profitable business with strong cash flow” and nearly $800 million in consumer assets. Following the merger, GoLogiq stock will continue to trade over-the-counter under the ticker GOLQ, but the companies said that may change:

“GoLogiq also plans to apply for an uplisting to a listed exchange, such as Nasdaq or the NYSE. Such an application would be subject to approval based on several factors, including satisfaction of minimum listing requirements.”

Blockchain-based infrastructure forges the future for carbon markets, crypto and commodities

Rising from the ashes of old crypto exchanges, a new paradigm arises.

1GCX: Partnership Material

The environment is now a global priority, evidenced by the threat of increasing carbon dioxide emissions reaching 414.72 parts per million, a new record high in 2021, as reported by the National Oceanic and Atmospheric Administration’s Climate in the United States. With the impact of these emissions on climate change in mind, many countries have publicized their mission to lower their carbon emissions. For example, the United States has openly communicated its plan for environmental commodity measurement through the Bureau of Economic Analysis.

However, for many sectors, achieving absolute-zero carbon emissions is impossible; carbon offsetting becomes crucial to counteracting residual emissions. Under this model, organizations can compensate for residual emissions by investing in projects which absorb carbon. Carbon offsets then become a method for tracking the number of credits an individual or organization needs to be carbon neutral.

Consequently, the president and founder of 1GCX, Michael Wilson shares:

“Environmental commodities, a class of assets that exist as non-tangible energy credits, are now recognized as the most crucial value creators in the next 10–50 years.”

Consider that with the environment and carbon becoming a top priority for the world, the traditional way the world will view energy and, more importantly, value, is also likely to shift. As more countries begin operating on an energy-credit-first approach, a value denominated in U.S. dollars and debt that may never be repaid may no longer be sustainable.

Value, which is a construct of perception, may shift for countries to recognize non-tangible energy credits — more specifically, carbon credits to their balance sheets. Recognizing energy over dollars makes sense when you consider how significant U.S. debt is and how paying it off requires a budget surplus, which hasn’t occurred in the country since 2001.

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Unifying the carbon market

Currently, there is still no unified solution for the carbon market that allows participants to quickly and seamlessly capture the value of carbon commodities. Today, several private companies offer carbon offsets to companies or individuals, each representing investments of contributions to forestry or other projects with a negative carbon footprint.

Alternatively, buyers may purchase credits on a carbon exchange, but unfortunately, traditional finance (TradFi) has a poor reputation for being archaic and part of a suppressive system. High-quality carbon credits are scarce since verification methods vary, among other reasons.

For this reason, 1GCX believes that taking the best parts of TradFi and merging them with blockchain will prove to be the only solution that can support a global transition to this new value system.

Michael Wilson goes on to share:

“Freedom begins and ends with the decision to be responsible for yourself and your world, specifically the environment around you. Trade, economics, and currency are at the very core of our civilization. If freedom is to be ideal, then the only path forward is one of liberty and responsibility. Cryptocurrency is bringing money, value, systems, and philosophy to the forefront of people’s minds. We are at a precipice, a new age is upon us, and the choice is one of consciousness, which is the way we will go.”

A commodity-first approach

1GCX is addressing these concerns head-on. The exchange represents a green technology that can bring the benefits of new markets to market valuations in cryptocurrency by highlighting its most promising projects. The resulting two-way bridge for carbon offset trading becomes part of a broad, holistic market that can facilitate adoption, education and connection across the crypto industry.

Unlike others in the space, 1GCX incorporated a market-making, commodities-first approach to redesign its financial markets. Moreover, the incorporation of the pairing and cross-application of crypto, commodities and carbon credits differentiate this platform from other exchanges. For users, this means a new user experience for trading on the platform, with access to live markets in carbon and energy. Therefore, 1GCX will become an ecosystem starting with a marketplace for everyday people to access one of the most well-kept secrets in global finance — carbon commodities, also known as Natural Asset Capital.

Looking at the rest of the ecosystem, users will come face-to-face with transformative offerings centered around tokenized bonds, called black bonds, and new payment systems that integrate crypto with crypto-commodity pairings.

Since May 11, 2022, 1GCX has continued to offer trading pairs with Bitcoin (BTC), Dogecoin (DOGE), Ether (ETH), USD Coin (USDC) and Tether (USDT), and some less common trading pairs against not just the U.S. dollar, but also the Canadian dollar, the euro and the British pound, in addition to other well-known digital assets and physical commodities. Built on the best fundamentals from TradFi, the platform’s exchange has resolved to add new cryptocurrency assets every week. It also shares roadmap plans for creating the first digitized carbon assets from a variety of offset verifiers around the world. These assets are said to be available for trade as early as Q4 2022.

Unlike today’s private exchanges, 1GCX will offer smooth and fast settlements, complete with low fees. For new users, this means having access to one of the most accessible platforms to use, even if they have never used a traditional exchange before.

R.A Wilson, the chief technical officer of 1GCX, reiterates the company’s mission:

“Our economic principles of open and transparent markets begin with increasing the flow of capital and accounting for unavoidable emissions through the use of free market solutions such as carbon offsets in a way that benefits everyone.”

Material is provided in partnership with 1GCX

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Cardano to launch new algorithmic stablecoin in 2023

‘Djed’ is set to go live in Jan. 2023, after a successful audit and a series of rigorous stress tests

Proof-of-stake blockchain platform, Cardano, has partnered with COTI, a DAG-based Layer 1 protocol, to launch what it refers to as an over-collateralized algorithmic stablecoin. The project said in an announcement provided to Cointelegraph that the stablecoin will be backed by excess collateral in the form of cryptocurrency stored in a reserve.

According to the release, Djed is set to go live on the mainnet in Jan. 2023, pending a successful audit and a series of rigorous stress testing. According to the developers, Djed will be pegged to the US Dollar, backed by Cardano ($ADA), and will use $SHEN as its reserve coin. 

The algorithmic stablecoin will be integrated with selected partners and Decentralized Exchanges (DEXs), who will reward users for providing liquidity using Djed. In a bid to grow at a sustainably healthy pace, the developers plan to adopt a gradual and slow approach to providing $ADA liquidity to the Djed smart contract. 

Shahaf Bar-Geffen, the CEO of COTI shared at the official announcement at the Cardano Summit:

“Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized, and has on chain proof of reserves.” 

Related: Cardano price chart paints ‘Burj Khalifa’ with 7-month losing streak — More losses ahead?

Despite Cardano’s lackluster price action, the blockchain continues to build and innovate within the ecosystem. On Sept. 22, Cardano’s long-awaited Vasil upgrade finally went live. The hard fork was designed to help improve the ecosystem’s scalability and general transaction throughput capacity, as well as advance Cardano’s decentralized applications (DApps) development capacity. At the time of publication, Cardano was trading at $0.30.

Banks still show interest in digital assets and DeFi amid market chaos

Traditional financial institutions continue to demonstrate use cases for digital asset support, along with DeFi capabilities, despite current market conditions.

The cryptocurrency sector is the Wild Wild West in comparison to traditional finance, yet a number of banks are showing interest in digital assets and decentralized finance (DeFi). This year in particular has been notable for banks exploring digital assets. 

Most recently, JPMorgan demonstrated how DeFi can be used to improve cross-border transactions. This came shortly after BNY Mellon — America’s oldest bank — announced the launch of its Digital Asset Custody Platform, which allows select institutional clients to hold and transfer Bitcoin (BTC) and Ether (ETH).

The Clearing House, a United States banking association and payments company, stated on Nov. 3 that banks “should be no less able to engage in digital-asset-related activities than nonbanks.”

Banks aware of potential

While banks continue to show interest in digital assets, BNY Mellon’s 2022 Survey of Global Institutional Clients highlights increasing demand from institutions seeking access to digital assets through reputable custodians. According to the survey, almost all of the 271 institutional investors (91%) are interested in investing in tokenized assets. The survey also found that most of these investors are using more than one custodian, with 35% conducting business with traditional incumbent players.

The heightened demand from institutions seeking access to digital assets is one of the reasons why banks are showing interest in cryptocurrency and DeFi offerings.

Bobby Zagotta, CEO of Bitstamp USA — a cryptocurrency exchange founded in 2011 — told Cointelegraph that Bitstamp has received many inbound requests recently for their Bitstamp-as-a-Service offering, which allows fintechs and traditional financial institutions to give clients access to cryptocurrency.

“Last year, fintechs were asking Bitstamp about services to support cryptocurrency. This year, fintechs have been discussing the downsides of not offering clients access to digital assets. Banks are waking up to the fact that there is client demand to buy and sell crypto, and if people can’t do this with their banks they will go somewhere else,” he said.

Zagotta added that banks currently not looking to implement digital asset offerings will lose market share: “Banks are realizing that they could be creating a customer retention problem if they don’t come to market with crypto offerings.”

To Zagotta’s point, BNY Mellon’s survey found that 65% of institutions are currently engaging with digital-native platforms rather than traditional financial players. However, BNY Mellon’s findings also indicate that 63% of surveyors would accept longer settlement times in order to transact with a highly rated traditional institution.

Recent: Breaking down FTX’s bankruptcy: How it differs from other Chapter 11 cases

Moreover, some industry experts believe that large banks can advance their operations by implementing crypto and DeFi solutions. Colin Butler, global head of institutional capital at Ethereum layer-2 network Polygon, told Cointelegraph that while the pilot trade conducted by JPMorgan and the Monetary Authority of Singapore was a milestone toward the adoption of decentralized solutions, it also demonstrates that these entities are testing to see if DeFi frameworks are beneficial.

“If the answer is ‘yes,’ then it would allow them to significantly increase the efficiency of their operations,” he said.

Butler elaborated that Polygon’s proof-of-stake blockchain ensured that the cross-border transaction conducted between JPMorgan, the Monetary Authority of Singapore, and other banking entities was fast, secure, and as cost-efficient as possible. He said:

“All of these elements are extremely important when it comes to DeFi adoption. The inherent efficiency of blockchain-based solutions is what gives DeFi an advantage over traditional financial systems that have been built over the past decades. While they’re still ‘working,’ these frameworks are very rigid. The latest advancements in DeFi can help make the whole process of transacting significantly more efficient and convenient.”

Echoing Butler, Seamus Donoghue, chief growth officer at METACO — a digital asset custody provider for major financial institutions — told Cointelegraph that he believes all financial assets will eventually be represented on distributed ledgers. As such, Donoghue mentioned that there is an imperative to redesign the financial market infrastructure. 

“This is the reason why virtually all tier-1 banks are now investing in building new infrastructure: not for the currently bearish crypto market, but for the much larger vision of how every asset will be represented and how value will be created and exchanged, globally,” he said.

Donoghue added that banks will eventually become the bridge for institutions seeking exposure to digital assets and DeFi. He explained that this is due to the fact that traditional financial institutions have consumer trust, large balance sheets and a network of market participants creating liquidity, along with a customer base with unmet needs.

However, traditional financial institutions remain concerned about regulations. Mathias Schütz, head of client and tech solutions at SEBA Bank — a Swiss-based digital asset bank — told Cointelegraph that traditional banks are hesitant to engage with digital assets due to regulatory uncertainty.

In order to solve this, Schütz noted that SEBA Bank, which is licensed by Swiss regulators, acts as a trusted counterparty for institutions to engage with digital assets.

“This is why SEBA Bank has been able to partner with a number of major banks in 2022, including LGT Bank, the world’s largest family-owned private bank,” he said. This is also important from a consumer’s perspective, as findings from BNY Mellon’s survey notes that investors are primarily concerned with digital custodians’ legal and regulatory frameworks.

Source: BNY Mellon 2022 Survey of Global Institutional Clients

Will market chaos impact interest in digital assets and DeFi?

Regulations aside, the recent turn of events with FTX US and Binance may impact how traditional financial institutions view digital assets. While it’s too soon to understand the consequences of this debacle, Donoghue mentioned that the FTX US and Binance shakeup could have a short-term impact. “It could shift banks’ strategies to skip cryptocurrency services, and focus exclusively on digital securities more broadly, at least temporarily,” he said. 

Eric Berman, a regulatory expert at Thomson Reuters, told Cointelegraph that he doesn’t believe this event will hasten bank involvement in digital assets. “Banking institutions have taken it slow with crypto as it is. The FTX US and Binance situation probably underscores to the banking sector that it has done the right thing in taking a pragmatic approach.”

In any case, both Donoghue and Berman are aware that this event demonstrates the need for further regulatory clarity before traditional financial institutions can innovate with digital assets.

“The recent negative industry events have emphasized the critical need for safe and compliant infrastructure, business practices and regulatory oversight. So if anything, the demand for asset servicing from trusted institutions such as regulated global banks, has only increased,” Donoghue said.

It’s also interesting to point out that BNY Mellon’s survey examined how the Terra ecosystem collapse has impacted institutional investors. According to the report, 9% of institutional asset managers noted that the Terra collapse has not impacted their digital asset plans, while 50% reported taking a short-term pause to reassess, noting they will likely continue soon.

Recent: Could Hong Kong really become China’s proxy in crypto?

Regarding whether the bear market will impact banks’ interest in digital assets, Butler explained that the crypto market is not much of a factor affecting banks, particularly when it comes to DeFi. For instance, he pointed out that JPMorgan used Polygon to conduct a live cross-currency transaction that involved tokenized Singapore dollar and Japanese yen deposits, along with a simulation of tokenized government bonds. According to Butler, those assets have no correlation with crypto prices. He added:

“Essentially, financial institutions are looking for ways to tokenize traditional assets — and this could be anything, from bonds and fiat currencies to real estate deeds — and transact them digitally. As such, these tokens retain the value of their ‘original’ assets, so this is more about the technology itself rather than crypto prices and bear/bull markets.”

OCC makes its staff available for fintech-related discussions

The announcement of one-on-one discussions with the OCC followed the department saying it planned to establish an Office of Financial Technology starting in 2023.

The United States Office of the Comptroller of the Currency, or OCC, has announced its representatives will be available on a one-to-one basis to discuss financial technology.

In a Nov. 3 announcement, the OCC said entities considering fintech products and services, partnerships with banks, or concerns “related to responsible innovation in financial services” have the opportunity for one-hour meetings with its staff between Dec. 14-15. The government office said it will screen requests and proposed topics of discussion and announce virtual meeting times.

The OCC announcement followed the department saying it planned to establish an Office of Financial Technology starting in 2023 in an effort to gain a “deep understanding of financial technology and the financial technology landscape.” The request form for the OCC office hours offered the opportunity for a “candid discussion,” suggesting that a transcript or other details will likely not be available to the public.

In announcing its Office of Financial Technology, the OCC said the proposed office hours will be one of five methods businesses and individuals have to connect with the government department directly. The OCC arm also announced listening sessions, fintech symposiums, participation in financial and banking conferences and public speeches.

Related: OCC Comptroller calls for federal collaboration with crypto intermediaries

The OCC seems to be stretching its regulatory ambitions in its authority over fintech firms. In 2021, the office pushed back against efforts from the Consumer Financial Protection Bureau to charter non-depository fintech firms. Acting OCC head Michael Hsu has also called for regulatory standards on stablecoins, while the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission have clashed while handling regulation and enforcement cases involving digital assets.

US currency comptroller to up its game with new Office of Financial Technology in 2023

The OCC said it will incorporate its six-year-old Office of Innovation into a new agency that will help it deepen its understanding of fintech and promote responsible innovation.

The United States Office of the Comptroller of the Currency (OCC) announced on Oct. 27 that it will create an Office of Financial Technology early next year. The new office will incorporate the Office of Innovation, which was set up in 2016. It will be led by a chief financial technology officer, who will report to the senior deputy comptroller for bank supervision policy.

The OCC describes itself as the U.S.’s “preeminent prudential supervisor.” It is an independent bureau of the Treasury Department and also charters financial institutions. Acting Comptroller of the Currency Michael Hsu said in a statement:

“To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape. The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission.”

Hsu may be looking forward to paying less attention to crypto personally. He told Reuters in an interview on Oct. 13, “We’re spending too much time on crypto. It’s interesting, it has thorny issues… but relative to other technology and banking issues, I think we’re now kind of overweight crypto.”

Hsu’s observations on crypto itself have been tepid, at best. He called it an “immature industry based on an immature technology” in a talk on Oct. 12 and said that its “most promising innovations have been crowded out by hype and a fixation on trading.” He warned against “unduly accommodative regulation” of crypto in a different talk on the same day.

Related: OCC issues order against Anchorage Digital over AML compliance

Hsu’s attitude toward crypto was reflected in the OCC’s Interpretative Letter 1179, published last November, which requires that banks wishing to engage in activities with crypto “demonstrate, to the satisfaction of its supervisory office, that it has controls in place to conduct the activity in a safe and sound manner.”

Nubank to launch loyalty tokens on the Polygon blockchain

Dubbed Nucoin, the token creation process will receive collaboration from 2,000 clients in the following months.

Nubank, a fintech bank in Brazil, announced the creation of the Nucoin token on the Polygon blockchain on Oct. 19, paving the way for a rewards program for its 70 million clients across Latin America. 

The company said that the token will be available in the first half of 2023, and will recognize customer loyalty and engagement with the bank products without cost or fees for its users. The tokens can be redeemed for perks and discounts on selected products. Fernando Czapski, the general manager for Nucoin at Nubank, stated:

“This project is another step ahead in our belief in the transformative potential of blockchain technology and to democratize it, even more, going beyond the purchase, sale and maintenance of cryptocurrencies in the Nu app.”

As of this month, approximately 2,000 clients will be invited to participate in a discussion of the project details, including the decentralized process of product creation and its Web3 features. “We decided to bring a group of customers into this co-creation process precisely to refine our product ahead of the public launch, to ensure we get to a program that truly resonates with our customers’ expectations and needs,” noted Czapski. 

“One of the largest digital banking institutions in the world, offering its own cryptocurrency is a strong testament to the utility blockchain and crypto have to offer,” said Sandeep Nailwal, co-founder of Polygon in a statement. 

In May, the bank announced a partnership with Paxos to allow its clients to buy, sell and store cryptocurrencies through its app, a move aimed at expanding and improving access to crypto assets, eliminating complexity and friction for customers to buy, hold and sell digital currencies through the bank’s app, and requiring no new account to open or transfer funds.

Earlier this year, Warren Buffett’s Berkshire Hathaway dumped a portion of its Visa and Mastercard holdings and increased exposure in Nubank, purchasing $1 billion worth of stocks after selling $3.1 billion worth of Visa and Mastercard stocks combined.

Regulated fintech in Bahrain enables crypto payments with Binance

The Central Bank of Bahrain gives the nod to EazyPay, launching crypto payments for more than 5,000 payment gateways in the country.

Cryptocurrency adoption continues growing in the Kingdom of Bahrain, with local companies enabling payments in crypto like Bitcoin (BTC).

EazyPay, an online payment platform regulated by the Central Bank of Bahrain (CBB), has partnered with Binance Pay to enable crypto payments in the country, EazyPay CEO and founder Nayef Tawfiq Al Alawi announced on Wednesday.

The newly launched crypto payment option will be available in more than 5,000 point-of-sale (POS) terminals and online payment gateway across Bahrain, the CEO said.

Major local merchants and firms, including Lulu Hypermarket, Sharaf DG, Al Zain Jewelry and Jasmi’s, will be able to accept more than 70 cryptocurrencies as payment by scanning the QR code from Eazy’s POS using Binance App.

Al Alawi emphasized that ‎‏Eazy Financial Services is licensed and regulated by Bahrain’s central bank as the fifth POS and online payment gateway acquirer and payment services provider.

“Special thanks go to the Central Bank of Bahrain, Binance and Eazy Financial Services,” he noted. Khalid Hamad Al Hamad, executive director of the banking supervision at the CBB, also congratulated Eazy on rolling out the new crypto payment service.

Binance CEO Changpeng Zhao noted that EazyPay’s crypto payment feature would be the “first regulated and approved crypto payments service offering” in the Middle East and North Africa region. As previously reported, Binance received several regulatory approvals in Bahrain, including a crypto service provider license and the Category 4 license.

The third-smallest country in Asia, Bahrain, has been actively adopting cryptocurrency over the past few years. In 2019, the CBB issued a framework for a range of crypto-related activities, officially establishing rules for licensing, governance, risk management, Anti-Money Laundering standards, reporting, security and other rules for crypto-asset services.

Related: OpenNode sets up BTC payment infrastructure in Bank of Bahrain regulatory sandbox

Bahrain has been actively experimenting with crypto and blockchain technology since adopting crypto regulations. In January 2022, The CBB completed a digital payments trial in collaboration with JPMorgan’s blockchain and cryptocurrency unit Onyx. CoinMENA, a major local crypto exchange regulated by the CBB, in June announced plans to expand its crypto trading services into Egypt.

GameFi investors are now prioritizing fun factor over money: Survey

While roughly half of the investors joined the GameFi space initially for profits, 89% of GameFi investors succumbed to Crypto Winter 2022.

GameFi, the fusion of gaming and decentralized finance (DeFi) attracts a set of investors that tend to choose projects based on their use case rather than money-generating potential.

The GameFi ecosystem attracts GenZ investors and gaming enthusiasts. As a result, it stands as an entry point for numerous first-time investors. A ChainPlay survey participated by 2428 GameFi investors revealed that 75% of the respondents joined the crypto space solely because of GameFi.

3 in 4 respondents joined cryptocurrency because of GameFi. Source: ChainPlay

While roughly half of the investors joined the GameFi space initially for profits, 89% of GameFi investors succumbed to the crypto winter of 2022 — with 62% of them losing more than 50% of their profits.

GameFi profits are decreasing. Source: ChainPlay

However, investors believe that poor in-game economy design was the main reason for their losses. In accordance with this sentiment, the survey revealed that in 2022, investors worldwide spent an average of 2.5 hours per day participating in GameFi, which is down 43% to 4.4 hours from last year.

The fear of rug pulls and Ponzi schemes coupled with sub-par graphics are some of the biggest drivers preventing investments in new GameFi projects. As a result, 44% of investors believe that the involvement of traditional gaming companies can be key to GameFi’s growth.

Moreover, when it comes to future GameFi projects, 81% of GameFi investors are moving away from the traditional mindset and prioritizing the fun factor over profit-making as they seek positive in-game experiences.

Related: GameFi and crypto ‘natural fit’ for game publishers: KBW 2022

Blockchain gaming and the Metaverse were the least affected ecosystems by the Terra debacle, confirmed a DappRadar report.

In addition, a sustained institutional investment was seen in both blockchain gaming and the Metaverse, highlighting that many top companies see the potential for strong economic growth in both sectors moving forward.

Binance gives security assurances in Philippine senate banking committee hearing

Binance is seeking licensing to establish a presence in the Philippines ahead of a moratorium and providing educational resources for future traders and blockchain developers.

Binance representatives participated in a hearing of the Philippine Senate Banking Committee, according to a report in the local press Wednesday. Bangko Sentral ng Pilipinas deputy governor Chuchi Fonacier, the country’s Security Exchange Commission (SEC) chair Emilio Aquino, and members of FinTech Alliance Philippines and the Cagayan Economic Zone Authority also took part in that hearing.

The hearing was devoted to fintech innovation and consumer protection, according to the report. Fonacier discussed a sandbox approach to regulation, and Aquino talked about digital asset security. Binance was represented by APAC director Leon Foong and Philippines general manager Kenneth Stern, who told the hearing about the exchange’s security and Know Your Customer process. Stern said at the hearing:

“78% of Filipinos remain unbanked, but crypto can help decrease that number as crypto asset holders will soon surpass the number of credit card holders in the country.”

Binance said that it is also sponsoring a training program for new cryptocurrency traders in the Philippines this month, and is in talks with local universities on providing courses and certification in blockchain technology.

The Philippines has had an ambiguous relationship with crypto and Binance in particular, despite its rapidly growing economy and the popularity of cryptocurrency in the country. Binance has long been looking to set up services in the country but faced opposition from a local think tank that was later dismissed by the authorities.

Nonetheless, the Philippine SEC released a letter on Aug. 2 cautioning the public against investing with Binance. The country’s central bank will impose a three-year moratorium on virtual asset service provider applications beginning Sept. 1, citing “risks that may undermine financial stability.” Binance CEO Changpeng Zhao stated in June that the company would pursue VASP licensing in the country.

The Philippine central bank has stated that it is also exploring the issuance of a wholesale central bank digital currency.