Japan Brings Digital Assets Into Financial Regulation as Korea and Hong Kong Build Market Controls (ASA News #26)

Japan’s integration of digital assets into financial regulation leads this week’s ASA News, alongside Korea’s expansion of public asset management infrastructure and Hong Kong’s effort to turn stablecoin licenses into real payment use cases.

1. Japan Brings Digital Assets Into the Financial Products Framework

Source: Japan FSA Establishes Dedicated Division for Crypto Assets and Stablecoins

Key Update

• On August 7, Japan’s Financial Services Agency established a dedicated Digital Assets and Stablecoins Division under the Asset Management and Insurance Supervision Bureau, elevating the former counsellor’s office into an independent supervisory unit.
• Japan is preparing to shift digital assets from the Payment Services Act framework to the Financial Instruments and Exchange Act, alongside a proposed reduction in the maximum tax rate from 55% to a 20% separate taxation regime and discussions on a Japan style Bitcoin ETF.
• Bitget will end services for residents of Japan after repeated warnings over unregistered operations, with new sign ups stopped on August 2 and remaining positions scheduled to close by year end.
• The Financial Services Agency and National Police Agency also requested stronger withdrawal controls, including waiting periods after fiat deposits or digital asset purchases and cooling periods for newly registered withdrawal addresses.

Commentary: Upgrading Supervision Before Opening the Market

Japan is building the supervisory structure needed to treat digital assets as financial products. A dedicated division, tax normalization, ETF discussions, investor protection, and fraud controls are advancing as one policy package.

This approach can widen access through regulated products while removing unauthorized operators. The next question is how quickly Japan will sequence ETF access and stablecoin approvals within the new framework.

2. Korea Expands Public Management and Investigative Infrastructure for Digital Assets

Source: Government Pushes to Explicitly Include Crypto Assets as National Asset Management Targets in Law

Key Update

• The Korean government is pursuing legislation that explicitly recognizes digital assets as assets subject to national asset management, reflecting the growing volume held through confiscation, seizure, donation, inheritance, and tax collection.
• The National Police Agency selected Dunamu to provide custody and management services for seized digital assets through Upbit Custody, using specialized wallet and private key infrastructure.
• Proposed amendments to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information would remove the KRW 1 million Travel Rule threshold and require information reporting for every transfer.
• Digital asset taxation remains scheduled to begin on January 1, 2027, although loss carryforward deductions and standards for different transaction types remain unresolved.

Commentary: Public Management Infrastructure Moves Ahead of Market Rules

Korea is incorporating digital assets into custody, accounting, tracing, and reporting systems before finalizing issuance rules. Administrative agencies are building the tools needed to manage assets that the state already encounters.

This sequence differs from Japan’s focus on investment products and Hong Kong’s focus on licensed issuance. Korea’s Digital Asset Basic Act may ultimately connect public management systems that are already operating across investigative, tax, and financial intelligence agencies.

3. Hong Kong Faces the Gap Between Stablecoin Licensing and Actual Use

Source: Four Months After Approval, Hong Kong Still Has No First Stablecoin… Timing of Second Round Also Unclear

Key Update

• The Hong Kong Monetary Authority remains cautious about a second round of stablecoin issuer approvals, while the two firms approved in the first round have yet to launch legal stablecoins.
• Standard Chartered Hong Kong is expected to disclose plans for HKDAP, a Hong Kong dollar stablecoin, although its issuance schedule, use cases, and reserve structure remain under review.
• OSL Group launched AgentPay, a stablecoin payment platform for autonomous artificial intelligence agents that supports USDT, USDC, and the enterprise token USDGO.
• The Securities and Futures Commission added BiFinance and Polar Tensor to its list of suspicious virtual asset trading platforms as Hong Kong continued to combine market opening with enforcement.

Commentary: Payment Networks Matter After Licensing

Hong Kong’s first approvals have not yet produced an operating stablecoin market. Issuers still need credible reserve assets, redemption structures, bank connections, distribution controls, and payment use cases.

OSL’s AgentPay shows that payment infrastructure can develop before locally licensed stablecoins launch. Competition may therefore shift toward distribution and settlement networks that give stablecoins recurring commercial use.

4. Other News

This section summarizes other news from the period related to Asian stablecoins, tokenization, payments, and digital asset infrastructure.

4.1 Theme 1. Expansion of Tokenized Payments and Bank Digital Money

4.1.1 Maybank Singapore Joins MAS’s BLOOM for Tokenized Cross Border Payments

• Maybank Singapore joined the Monetary Authority of Singapore’s BLOOM initiative to test programmable cross border settlement using tokenized bank assets, extending Singapore’s bank centered payment experiments beyond Project Orchid.

4.1.2 Deposit Token Wallets to Expand to 500,000, With Transfers Also Being Tested

• The second phase of the Bank of Korea’s deposit token experiment will expand the wallet cap to as many as 500,000 and test transfers, moving the project from issuance toward validation at user scale.

4.1.3 Bank of China’s mBridge Cumulative Transaction Volume Surpasses 600 Billion Yuan

• Bank of China reported that mBridge surpassed 600 billion yuan in cumulative transaction volume, with some cross border remittances and deposits completed within one hour.

4.1.4 China and Malaysia Test 43,000 Yuan e CNY Payment Corridor for Durian Trade

• China and Malaysia used e CNY to settle a 43,000 yuan durian shipment in about 30 minutes, connecting central bank digital currency infrastructure to a real small scale trade flow.

4.2 Theme 2. Institutional Onchain Finance and Distribution Infrastructure

4.2.1 Tokenized Assets Pass Indonesia’s OJK Sandbox

• Tokenized gold, securities, and real estate products passed Indonesia’s Financial Services Authority sandbox, advancing a digital asset roadmap designed to run through 2031.

4.2.2 Nomura Affiliate Laser Digital Invests in ZIGChain

• Laser Digital invested in ZIGChain and partnered with ZIG Markets to bring private credit, PayFi, small business lending, invoice factoring, and stablecoin based finance onchain.

4.2.3 Circle Announces Arc Genesis Validators

• SBI Group and Sumitomo Corporation joined the genesis validator set for Circle’s USDC focused Arc network, showing how infrastructure competition is expanding into validator composition.

4.2.4 Nomura’s BOOSTRY Plans Canton Based Multichain Wallet

• Nomura affiliate BOOSTRY is working with Digital Asset to launch a Canton based multichain wallet within the year, highlighting wallet interoperability as a competitive factor in institutional tokenization.

4.3 Theme 3. Regulatory Boundaries and Market Entry Conditions

4.3.1 Korea Releases Detailed Tokenized Securities Rules

• Korea released rules covering over the counter trading limits and exchange entry requirements for tokenized securities, moving the market from issuance experiments toward distribution standards.

4.3.2 Taiwan Applies the Travel Rule to Domestic Crypto Transfers

• Taiwan will require originator information for all domestic transfers between virtual asset service providers from October, with additional identity data for transfers above TWD 30,000.

4.3.3 Thailand Sets Digital Asset Capital Gains Tax at 0%

• Thailand will exempt personal capital gains from digital asset investments for five years when investors use locally licensed exchanges, linking tax incentives to regulated market participation.

4.3.4 FalconX Moves to Withdraw Singapore License Application

• FalconX is withdrawing its Singapore license application and reducing local staff as it reallocates resources toward its regulated European business, highlighting the cost of maintaining regional licenses.

[ASA News] is a weekly newsletter that summarizes major stablecoin related news across Asia and shares views from industry participants. (2026.08.03~08.09)