Essere Cripto-friendly non equivale ad essere Cripto-facile

• Asia's Steady Rise in the Cryptocurrency World
• Singapore's Stance on Cryptocurrency
• Hong Kong as a Cryptocurrency Hub
• Japan's Approach to Cryptocurrency
• Japan's Regulations on Stablecoins
• Regulatory Clarity in Asia
• Regulatory Challenges in the United States
• Global Cryptocurrency Regulations
• The Need for Crypto-Clarity

Asia's Steady Rise in the Cryptocurrency World

In 2023, one of the standout themes was the consistent rise of Asia as a region of critical importance in the global cryptocurrency sector. This surge can be largely attributed to prominent digital asset hubs like Singapore, as well as the resurgence of Hong Kong and Japan. While these jurisdictions might embrace digital assets, the hype surrounding them can sometimes be misleading. Locations often coined as "crypto-friendly" or "pro-crypto" actually have some of the strictest regulations worldwide. The term crypto-friendly does not necessarily equate to crypto-easy.

Singapore's Stance on Cryptocurrency

Singapore has earned its pro-cryptocurrency reputation from its early initiatives to regulate the industry and a consultative approach from its regulators. However, just because it may advocate for the tokenization of assets does not necessarily make it "crypto-friendly". This was further confirmed by Ravi Menon, Managing Director of the Monetary Authority of Singapore, who gave a speech in the previous year aptly titled Yes to digital asset innovation, No to cryptocurrency speculation. He expressed that cryptocurrencies had not performed well as a medium of exchange or a store of value, highlighting substantial speculative fluctuations and significant losses incurred by cryptocurrency investors.

Hong Kong as a Cryptocurrency Hub

There was much excitement regarding the resurgence of Hong Kong as a cryptocurrency hub. In June, the Hong Kong Securities and Futures Commission (SFC) began accepting license applications for cryptocurrency exchanges. Despite its stricter regulations, Hong Kong seems more favourable towards cryptocurrency trading than Singapore, with regulators encouraging banks to onboard more cryptocurrency exchanges as customers. However, this cordiality comes with many stipulations. Operating an exchange in Hong Kong is neither simple nor cheap, with the cost to obtain approval from a team of lawyers, consultants, and insurers ranging from 12 to 20 million dollars.

Japan's Approach to Cryptocurrency

Japan's ruling Liberal Democratic Party has been clear about its intention to make Japan a Web3 capital. Despite a severe crackdown on cryptocurrencies following the Coincheck hacking incident in early 2018, Japan's regulatory approach led to a significant win when FTX$3.28 -5.38% collapsed in November 2022. The country's requirement for cryptocurrency exchanges to separate exchanges and customer assets helped FTX Japan users effectively recover their money.

Japan's Regulations on Stablecoins

Japan is among the first major economies to implement regulations on stablecoins, but it sets a very high bar. Only banks, trust companies, and money transfer services can issue stablecoins in Japan. This could make profitability of yen-based stablecoins very difficult considering Japan's low interest rates. Ultimately, high taxation may be Japan's biggest obstacle in becoming a destination for cryptocurrency entrepreneurs.

Regulatory Clarity in Asia

Singapore, Hong Kong, and Japan have something significant in common. They may not be easy on cryptocurrencies, but they are relatively clear. Exchanges have a clear idea of what they can and cannot do. Regulatory authorities in all three jurisdictions have taken the necessary time to create comprehensive regulatory frameworks and have shown a willingness to engage with the industry. In other words, the rules may not please everyone, but at least they are accessible.

Regulatory Challenges in the United States

This approach contrasts sharply with the United States, where the lack of a national cryptocurrency framework has people seeking clarity in court decisions. The main issue is not that regulations are too strict, but that there is ongoing debate on what constitutes a security and what constitutes a commodity.

Global Cryptocurrency Regulations

Global cryptocurrency regulations are clearly trending towards being more stringent, as we will see when the European MICA takes effect next year. The wide-ranging regulations for the 27 member states of the European Union, covering about 450 million people, will be anything but lenient. This is why it's crucial for regulatory authorities to be flexible and open to dialogue with the industry so that they can make appropriate adjustments if oppressive rules prevent businesses from thriving.

The Need for Crypto-Clarity

The term crypto-friendly, which implies ease, may need to be retired. A more accurate term would be crypto-clear. If and when the cryptocurrency market fully recovers, this clarity will give regions like Singapore, Hong Kong, and Japan a significant advantage.

Edited by Jonathan Stoker