Asia’s biggest financial centers seem eager to encourage the growth of the crypto industry while protecting consumers and preventing contagion if things go wrong.
Top global financial centers Japan, Hong Kong and Singapore have some of the most mature financial regulations worldwide. It’s no surprise, therefore, that discussions on how to regulate crypto began years ago, though they have taken very different directions.
Japan went hard on consumer protection but more recently has relaxed requirements for token listings and pushed a more welcoming message for firms.
While China banned crypto trading and clamped down on mining, Hong Kong exerted its autonomy to chart its own way, announcing that it was open to crypto firms in a bid to preserve its status as an international finance center.
Crypto firms may find meeting the regulatory bar to be difficult in the beginning, but the signs are that regulations will keep easing. Meanwhile, in Singapore, existing market players know that regulations will tighten further.
Last year’s implosion of high-profile firms registered in the city-state, such as Three Arrows Capital and Terraform Labs, kicked off a regulatory process that looks likely to result in more restrictive regulations.
Despite their differences, “The more developed markets in Asia are fairly advanced in providing clarity on what falls within the virtual asset service provider (VASP) framework,” Vivien Khoo, co-founder of the Asia Crypto Alliance said, noting that Hong Kong and Singapore have a “fairly similar” VASP framework.
Collaboration among countries across the region will tighten. “It will be much harder to engage in regulatory arbitrage now in Asia,” Khoo said.
