Asia Is Becoming More Crypto-Friendly Amid Regulatory Struggles in the United States
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Asia continues to work towards providing crypto clarity while there’s uncertainty surrounding the same group of financial assets in the United States. Consequently, this is likely to make Asia more welcoming to cryptocurrency investors.
Recently, Hong Kong authorized cryptocurrency trading for retail investors. Additionally, the licenses of some exchanges were upgraded (HashKey and OSL). This gave those exchanges the opportunity to grow their businesses so that they could now accommodate retail investors.
Lennix Lai, global chief business officer at cryptocurrency exchange OKX, said, “It shows that virtual assets are becoming a recognized asset class with a similar regulatory status to traditional asset classes.”
According to a statement made last year, Hong Kong acknowledges “the potential of distributed ledger technologies and Web 3.0 to become the future of finance and commerce” and anticipates that with the right regulations, efficiency, and transparency would be improved.
Also, Singapore has been one of the pioneers in cryptocurrency regulation. In August, Blockchain.com was licensed by the Monetary Authority of Singapore. This came as an upgrade to the in-principle version it earlier received in October. Also, Ripple had earlier received an in-principle from the same body in June.
On the other hand, the U.S. Securities and Exchange Commission has filed cases against Coinbase and Ripple, accusing them of breaking securities laws. In reaction to the SEC’s crackdown, companies like Coinbase, Ripple, and other cryptocurrency businesses have vowed to leave the country.
Chaos in the United States
Two years ago (in 2020), the Security Exchange Commission (SEC) faulted Ripple and its joint founder for violating the security law by selling the XRP token when it hadn’t been properly registered with the SEC. However, it was declared in July that the token isn’t inherently a security.
In the meantime, Coinbase was sued by the SEC in June on the grounds that it was running an unlicensed broker and exchange. Binance was accused of breaking various securities laws in the same month.
“I believe it’s fair to say that the United States has done all in its power to make it unclear as to what the regulations governing the crypto business are. According to Ripple CEO Brad Garlinghouse, the SEC has been at the forefront of this confusion since May. He came to the conclusion that some crypto companies would decide to relocate to nations with more progressive laws.
Cryptocurrency Regulatory Clarity in Asia
Hong Kong and Singapore provide clearer operational guidelines for different industry players. During the first month (January) of 2020, Singapore enacted its Payment Service Act, which was a framework for regulating payment services as well as the provision of cryptocurrency services for the masses.
Singapore has increased oversight of cryptocurrency businesses. Before the end of the year, it required businesses to place consumer assets under a statutory trust. Additionally, the MAS is preventing businesses from assisting in the loan or staking of the assets of their retail consumers.
Also, the city-state became one of the first nations in the world to introduce regulations for stablecoins, a sort of digital currency, on Tuesday.
Ong Chengyi (an executive at Chainalysis) mentioned that Hong Kong and Singapore have the same manner of approach to keeping a high regulatory benchmark while also being proactive in providing an encouraging environment for digital property businesses.
Ong anticipates that Hong Kong will award more licenses and that more crypto companies will move to Asia.
Gemini joined Coinbase and Ripple in growing their Asia operations in June when it announced it would hire more staff there and use Singapore as its regional hub.
