Asian countries have been the first passengers in the crypto adoption train. However, without a standard regulatory framework, countries have approached cryptocurrency regulations from different angles. Some have chosen to embrace the technology that underpins cryptos and criminalizing crypto businesses while others have chosen to accommodate virtual currencies and formulate favorable regulations.
Let’s take a look at how key Asian countries are handling cryptocurrency regulations.
Let’s start on a slightly negative mood. China was once one of the major crypto markets in the world, although it had no concrete cryptocurrency regulations in place. Unfortunately, when it decided to regulate the space, virtual currencies were no longer welcome in China. Anything crypto was banned. From initial coin offerings to crypto exchanges to crypto mining. Before all these happened, a huge percentage of Bitcoin miners were stationed in China.
After the ban, miners and exchanges either closed shop or left the country. For example, Binance, one of the leading virtual currency exchange in the world, had to leave China to survive.
On the contrary, China has made huge use of the technology behind cryptocurrency; distributed ledger technology. Fortunately, owning Bitcoin and other cryptos is still legal in the country.
Japan is a major crypto market and its regulatory framework, although harsh, is geared towards making it even more appealing for both crypto businesses and enthusiasts. The Japanese financial watchdog, the Financial Services Agency, started paying close attention to cryptocurrency regulations when Mt Gox, a respected crypto exchange was hacked and millions lost. The hack brought the exchange down to its knees and creditors are yet to get paid 5 years down the line. Japan now requires crypto exchanges to be approved by the Financial Services Agency before they can be allowed to operate.
Last month, the Japanese House of Representatives passed a bill in a bid to tune the country’s laws about cryptocurrency regulations. The bill which was prepared by the FSA seeks to amend the Financial Instruments and Exchange Act and the Act on Settlement of Funds. If modified, the two acts are meant to help the FSA in enforcing tighter cryptocurrency regulations.
Singapore is making headlines due to its positive approach towards cryptocurrencies and blockchain technology in general. The country’s financial regulator, the Monetary Authority of Singapore, has been tasked with formulating cryptocurrency regulations.
For example, towards the end of 2018, the Monetary Authority of Singapore finalized the creation of a regulatory framework intended to govern payment services including, but not limited to, virtual currency payment service providers acquiring an operating license.
The crypto scene in South Korea is patrolled by the Financial Supervisory Service, the country’s financial watchdog. Although the country falls among key crypto markets in Asia and the world, initial coin offerings were prohibited in 2017. Fortunately, the country has a relatively good relationship with cryptocurrencies. The country has implemented cryptocurrency regulations to help protect crypto investors. The positivity exuded by the South Korean government on cryptocurrencies has helped in creating a favorable regulatory framework to help drive the fourth industrial revolution.
India is yet to decide how it wants to regulate its crypto space. The country’s central bank, the Reserve Bank of India (RBI), prohibited local banks from providing service to crypto affiliated firms such as virtual currency exchanges. The case to lift the ban sits in the Supreme court and is yet to reach a comprehensive conclusion.
Instead of banning crypto activities, Thailand has followed South Korean and Japan to develop cryptocurrency regulations aimed at governing its crypto space. Thailand requires exchanges to be licensed before operating.
For instance, at the beginning of this year, four exchanges – Bitkub, Bx, Satang Pro, and Coins – were approved to operate in the country.
According to Bitkub’s founder, Jirayut Srupsrisopa, the approval opened doors for partnerships.
“We can partner with traditional financial institutions, brokers, e-wallets etc. to offer more financial products to customers. The bottleneck was the regulation.”
In conclusion, countries in the Asia region are handling cryptocurrency regulations depending on their taste of virtual currencies. Notably, most of them have decided to keep a positive outlook. Additionally, even China and India, maybe it’s a matter of time for them to acknowledge the power of cryptos in their national laws.