China Tells Foreign Spies the Blockchain Is Being Watched
China's Ministry of State Security (MSS) has escalated its rhetoric around cryptocurrencies, publishing a social-media post that frames the asset class as a tool for criminal and espionage activity. The agency described digital currencies as enablers of money laundering, cyberattacks, and what it called "accomplices" in intelligence operations, according to reporting by the South China Morning Post.
The MSS specifically accused "overseas anti-China hostile forces" of exploiting crypto to destabilise financial systems and threaten national security. A key element of the warning was the assertion that blockchain transactions are far from anonymous — a message that analysts read as a direct signal to foreign intelligence personnel who might assume they can move funds without detection. In practical terms, the agency was telling would-be operatives that on-chain activity on mainstream networks such as Bitcoin and Ethereum is traceable. That said, privacy-focused coins like Monero and Zcash can offer a higher degree of concealment when used properly, a nuance the MSS did not address.
The warning comes against a backdrop of repeated regulatory crackdowns in China. The country imposed a full ban on crypto exchanges in 2017, followed by a mining prohibition in 2021, and has declared all crypto-related business operations illegal.
Singapore Reclaims Top Spot as Regional Crypto Hub
Singapore's crypto economy expanded by 55.4% to reach $284 billion in the twelve-month period ending June 2026, according to data from Chainalysis. The surge allowed the city-state to reclaim its position as the largest crypto economy in the Central and Southeast Asia and Oceania (CSAO) region, bucking a broader regional trend in which the wider CSAO market contracted by 6.8% over the same window.
A significant driver of the growth was institutional platform activity, which jumped 94% to $60 billion. Chainalysis noted that this volume was heavily concentrated among a limited group of market makers, over-the-counter dealers, and institutional brokerages. In a comment to Cointelegraph, the firm described the expansion as "very concentrated and marked by mostly high-volume activity by existing platforms rather than the dynamic entry of new services," suggesting that the gains reflected deepening relationships with established players rather than a wave of new entrants.
South Korea Weighs Market-Making Rules; Firms Expand Regional Footprint
South Korea's Financial Services Commission (FSC) revealed it is evaluating a formal market-making framework for digital assets. The move follows a notable pricing distortion earlier this month, when a yen-backed stablecoin called JPYC opened trading on the Upbit exchange on September 17 at 12 Korean won per token before spiking to 37.6 Korean won within roughly an hour — more than four times its intended peg. The exchange attributed the dislocation to thin liquidity.
"We will also review the need to introduce systems such as market-making activities to increase the efficiency and stability of the digital asset landscape," said Yoo Young-joon, director of digital finance policy at the FSC. Currently, South Korea's Virtual Asset User Protection Act contains no carve-out for market-making within its market-manipulation rules, effectively blocking licensed market makers from providing liquidity in the country's crypto venues.
Meanwhile, US-based payments and infrastructure company MoonPay announced the creation of a South Korean subsidiary. The entity is expected to partner with local financial institutions on remittances, payments, settlement services, and digital-asset distribution, although it has not yet secured the requisite regulatory approvals.
In Japan, Binance Pay is set to let eligible overseas visitors spend more than 100 cryptocurrencies at the vast majority of PayPay-supported merchants, with the service going live on a Wednesday. The arrangement runs through HIVEX, a payment-interoperability framework that links foreign QR-payment services to PayPay's merchant network. Under the setup, Binance Pay settles in Tether (USDT) on its backend, HIVEX settles with PayPay, and PayPay pays merchants in Japanese yen. Binance stated it is the first crypto payment provider to access PayPay merchants via HIVEX and noted that individual merchants do not need to opt in separately. PayPay itself is accepted at millions of locations across Japan, spanning major retail chains, independent shops, vending machines, taxis, and public transit. The platform lists nine other overseas payment services connected through HIVEX, predominantly from China, Hong Kong, and Taiwan.
Hong Kong Deepens Crypto Oversight; HSBC Launches Stablecoin
Regulators in Hong Kong have formalised a cooperative framework for the financial reporting and audit of licensed crypto firms. The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed an agreement that establishes mechanisms for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations targeted at licensed digital-asset companies.
In a related development, HSBC outlined a phased rollout of RedCoin, a new stablecoin denominated in Hong Kong dollars. The bank plans to begin with peer-to-peer and merchant payment use cases before extending the product to corporate and institutional applications. HSBC also announced it will run a public-education campaign aimed at helping retail users avoid scams and protect their holdings as stablecoin adoption broadens.
