Tag: foreign exchange

Top Banks in South Korea Select CenterPrime And Chainlink To Bring FX Rates Data to DeFi

In South Korea, leading commercial banks have selected local fintech platform CenterPrime and Oracle system Chainlink to bring foreign exchange rate data feeds from local banks to the decentralized finance (DeFi) space. CenterPrime has access to the Korean open banking API that streams foreign exchange data from several local banks in the country.

Developing Country’s Perspective

Such integration would see CenterPrime share foreign exchange rates from leading Korean banks, including the Industrial Bank of Korea (IBK), Ngonghyup Bank, Shinhan Bank, and Hana Bank to Chainlink’s decentralized oracle network.  

Access to foreign exchange rates would be enabled in Korea’s local currency Korean Won. The price feeds would include Korea Won (KRW), China Yuan (CNY), Euro exchange rate (EUR), US dollar (USD), and many more.

The data would be accessible for DeFi service providers operating in the network, thus allowing them to access decentralized exchange rate data when creating smart contracts on blockchain platforms.

The development would bring more Korean users to DeFi while DeFi service providers would be leveraged as their exchange rates are provided by top commercial banks.

The development opens floodgates for a tremendous expansion in blockchain-based fintech applications operating DeFi and cross-border applications that build unique home-group products priced in the local currency Korean Wons. The development also transforms the capabilities of fintech and open banking services, therefore, bringing breakthrough innovations for the fintech industry in the country.

This is the first time in history that has happened in which blockchain apps would have the capability of accessing decentralized foreign exchange rates compiled by leading banks in South Korea.

Saving Traditional Finance with DeFi

DeFi has created a new wave of innovation that is shaping traditional finance. Just like Bitcoin is a peer-to-peer-cash, the DeFi system is a peer-to-peer service that functions without the need for intermediaries. With such a peer-to-peer electronic financial instrument system, projects are using blockchain and cryptographic tokens to enable anyone to own, transfer, and issue financial instruments.

South Korea is one of the most advanced and largest economies in the world. The country has one of the highest rates of cryptocurrency adoption in the globe. Having access to the decentralized data from the traditional financial markets makes the country set to expand the base of the DeFi use case.

China Dismantles $2.2 Billion Underground Banking Operation Leveraging Cryptocurrencies

Chinese authorities have recently dismantled a massive underground banking network valued at $2.2 billion, which was ingeniously using foreign digital currency platforms to circumvent the country’s stringent financial controls. This operation came to light following a detailed investigation by Chinese foreign exchange police.

The underground banking system operated by purchasing virtual currencies and then selling them through overseas trading platforms, thereby obtaining the necessary foreign currency. This process effectively bypassed China’s tight foreign exchange regulations. The inspector of the Qingdao Branch of the State Administration of Foreign Exchange, Xu Xiao, highlighted that this process involved illegal foreign exchange transactions, mainly converting yuan to other currencies.

During the crackdown, authorities seized cryptocurrencies worth approximately $28,000, including Tether and Litecoin, among others. However, it’s believed that the operation moved over $2.2 billion through more than a thousand bank accounts across 17 provinces and municipalities. This extensive network exemplifies the sophisticated and far-reaching nature of the illegal operation.

China’s strict regulations permit individuals to exchange only up to $50,000 in foreign currency annually unless officially authorized. Transactions beyond this limit without a permit are considered money laundering. This policy reflects China’s efforts to maintain a “closed” capital account, preventing capital flight.

China, once a significant player in the cryptocurrency market, imposed a blanket ban on crypto exchanges in 2017 and later expanded restrictions to mining and trading. Despite these prohibitions, underground operations continued, as evidenced by this recent bust. The Chinese government asserts that its strict stance on cryptocurrencies is to prevent illegal financial activities.

Interestingly, while mainland China maintains a hostile stance towards cryptocurrencies, the special administrative region of Hong Kong is more progressive, implementing specific rules and licensing crypto exchanges. This discrepancy highlights the varied approaches to cryptocurrency regulation within and outside China.

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