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The Current Status of Crypto in AsiaWith the United States having taken a very harsh line relative to cryptocurrency of late, there has been a lot of chatter surrounding the likelihood of Asia driving crypto forward. With that in mind, we’ve taken a look at the state of crypto in a number of Asian countries.©Pexels/RODNAE ProductionsJapanJapan is among the most crypto-friendly developed nations globally, having acknowledged Bitcoin as a legal payment mode and regulated crypto exchanges in 2017. Bitflyer and Bitbank are among the crypto exchanges operating in Japan, which currently has over 23 authorized crypto exchanges.The country aims to balance consumer protection and innovation by requiring crypto exchanges to register with the FSA, comply with stringent rules on security, anti-money laundering, and reporting, undergo regular FSA audits and inspections, and be part of the Japan Virtual Currency Exchange Association (JVCEA) for self-regulation.Despite being regulated, Japan’s crypto market is lively, with the Yen ranking second for Bitcoin trading volume by currency. The country has a flourishing crypto community, including blockchain firm LayerX, which requires ChatGPT expertise. Japan is also exploring the potential of central bank digital currencies (CBDCs) and plans to launch a pilot program with private sector partners in 2023 to test their feasibility for various use cases, aligning with the country’s strict approach to crypto.Japan’s crypto taxation is unfavorable, with crypto gains taxed at the same rates as regular income, potentially reaching up to 55% for higher income brackets. However, Japan is one of the few countries with comprehensive guidelines on crypto taxation, with the NTA providing a detailed document that explains different types of transactions and their corresponding tax calculations.ChinaChina’s ban on crypto mining led to many miners moving their operations overseas or selling their equipment at a loss. However, China’s crypto-mining industry bounced back, with a 21% share of the global hash rate. While China has a competitive advantage in cheap electricity, regulatory risks remain.China’s digital yuan is a legal tender fully backed by the People’s Bank of China (PBOC) and pegged to the renminbi. Unlike most cryptocurrencies, it is not decentralized or anonymous but is monitored by the PBOC. Adoption has been slow despite various partnerships and pilot tests, including with WeChat Pay.China is working with other countries on the Multiple CBDC Bridge project to explore the feasibility of cross-border fund transfers among different currencies. Launching its own CBDC may allow China to reduce its reliance on the US dollar and increase its influence over global trade and monetary policy. However, the success of that endeavor is questionable.Hong KongHong Kong is a crypto-friendly jurisdiction that faces banking access and mainland influence challenges. Despite difficulties opening local bank accounts after the closure of two crypto-friendly banks, Hong Kong remains committed to fostering its fintech hub status.The government proposed allowing retail investors to trade cryptocurrencies and ETFs and reviewing property rights for tokenized assets while considering legalizing smart contracts. Crypto purchases for all citizens are due to be legalized in June 2023. These measures should attract more investors and businesses to the city’s crypto industry.Nonetheless, Hong Kong must overcome hurdles regarding banking access and regulatory uncertainty from mainland China to maintain its attractive status for crypto businesses and investors.SingaporeSingapore has a supportive crypto ecosystem and regulations with low tax rates, favorable policies, strong financial center reputation, and proximity to other Asian markets. Notable international crypto players with offices in Singapore include Coinbase, Crypto.com and Kraken.However, Singapore imposes strict rules on crypto service providers to prevent illicit activities, requiring digital payment token (DPT) services to obtain a license under the Payment Services Act or face fines and jail time. Singapore’s crypto industry also faces competition from other jurisdictions, such as Hong Kong and the UAE, offering tax incentives and favorable legal frameworks.IndiaIndia’s crypto industry faces uncertainties due to the lack of a clear regulatory framework and frequent changes in the government’s stance. Despite having a large tech-savvy population and an active crypto community, the industry struggles with regulatory compliance and legal risks. In 2018, the Reserve Bank of India’s ban on banking channels cut off many crypto businesses and users.The Supreme Court of India later overturned the ban, but draft bills to ban or regulate crypto have since been proposed without official introduction or passage. India recently imposed a preemptive ban on crypto advertising and sponsorships and is exploring the integration of a CBDC. India’s position on crypto leans toward the anti-crypto side, just short of an outright ban.For brevity, we’ve confined discussion to these five Asian venues. However, it would be remiss of us not to mention that Vietnam has one of the highest levels of crypto adoption in the world while having a crypto trading ban in place. Not so in South Korea where crypto trading is legal, with strict regulation having been put in place. Meanwhile, Thailand’s Securities and Exchange Commission (SEC) has approved four cryptocurrencies as tradable assets, with crypto trading in the country having a legal status.It’s difficult to figure out precisely how crypto will develop geographically but it seems certain that its future will be molded to some extent in Asia.

Following the recent bitcoin boom, transactions in cryptocurrencies among Korean investors have surged, significantly benefiting local banks that have made contracts with Korean crypto exchanges to offer real-name accounts for crypto investors. As the price of bitcoin soared to as high as KRW 90 million ($67.6 million) in Korea on Thursday, online-only bank Kbank saw an uptick in trading fee revenue, according to local media outlet The Seoul Economic Daily. Kbank is a partner with crypto exchange Upbit, which accounts for 70% of the Korean crypto market.  Under the current law, Korean crypto exchanges offering trading against Korean won must secure real-name accounts from a bank. These banks typically earn fees of KRW 300 to KRW 1,000 per transaction. Currently, other than Kbank, NongHyup Bank offers real-name accounts to Bithumb, Kakaobank to Coinone, Shinhan Bank to Korbit and Jeonbuk Bank to Gopax.Photo by Kanchanara on UnsplashCrypto trading volume up 68.2% in a monthAccording to Xangle, a crypto data intelligence platform, the total crypto trading volume in Korea rose by 68.2% between the last week of January and the last week of February, rising from KRW 2.39 trillion to KRW 40.2 trillion. During the same period, the daily average trading volume also grew from around KRW 4 trillion to KRW 5.7 trillion.   In particular, the bitcoin trading volume on Upbit surged to 19,254 BTC on Feb. 28, reaching the second-highest level since Nov. 10, 2022, when the asset’s trading volume stood at 20,710 BTC. After signing the real-name account contract with Upbit in 2020, Kbank raked in KRW 29.2 billion in fees during the last bull market of 2021, which was equivalent to 14% of its annual interest income of KRW 198 billion and exceeded its net income for the year, which stood at KRW 22.5 billion. Increased bank deposits from exchange usersKbank also saw a substantial rise in its balance sheet, with Upbit users depositing around KRW 2.94 trillion into their real-name accounts. The sum is six times greater than the deposits made into NongHyup Bank by Bithumb users, which stood at KRW 547.1 billion.  Experts see that the surge in Kbank’s user base, which recently surpassed 10 million users, is largely attributed to growing excitement surrounding bitcoin. One crypto insider said that crypto trading fees, which have been on the decline for the past 2 years, could take a turn this year, signaling further gains for the affiliated banks.  

Crypto emerges as topic in Indonesian election campaignAs Indonesia gears up for its upcoming presidential election, the country’s crypto market has become a focal point for political discourse. Gibran Rakabuming Raka, a vice presidential candidate and the eldest son of President Joko Widodo, recently unveiled his plans to foster expertise in blockchain and crypto within the Southeast Asian nation.Chosen as the running mate for presidential candidate Prabowo Subianto, the 36-year-old politician aims to elevate tech education in Indonesia, opening avenues for the younger generation, particularly in the realm of digital assets. According to a report by Indonesian online news portal detikNews, while speaking at a political gathering on Dec. 10, Gibran asserted:“We are preparing blockchain experts, we are preparing cyber security experts, we are preparing crypto experts.”Photo by Nick Agus Arya on UnsplashCrypto potentialIndonesia has emerged as being ahead of the curve in terms of crypto adoption, ranking seventh on Chainalysis’ 2023 global crypto adoption index. With an estimated 18 million crypto investors, the country boasts a robust industry association that also functions as a self-regulatory body.Local news media reported in October that the Southeast Asian country has seen a 10.1% year-on-year increase in the number of crypto investors. At the time, Tirta Karma Senjaya, Head of the Commodity Futures Trading Regulatory Agency, said, "Growth in the number of crypto investors in Indonesia continues to increase, but investors are still looking for the right time to buy crypto.”Private sector entities have also identified the raw potential. In the same month, Web3 consulting firm Tiger Research, in partnership with South Korean crypto data platform Xangle, produced a report which identified significant potential for the development of Indonesia’s Web3 market. There are over 30 crypto exchanges operating in the country, acting as the primary channel through which growth in crypto is propelled in Indonesia.Capitalizing on crypto interestThe government, under President Widodo, has actively sought to capitalize on this crypto enthusiasm, going as far as establishing a local “stock market” dedicated to crypto assets.Gibran’s proactive stance on crypto education aligns with his broader vision of positioning Indonesia at the forefront of the global digital revolution. The country’s rapidly growing tech landscape and crypto adoption make it an opportune space for fostering expertise in these cutting-edge technologies.As the presidential election approaches, Gibran’s commitment to cultivating a pool of crypto experts underscores the potential influence of the crypto industry in shaping Indonesia’s economic future.An international topicCrypto is increasingly becoming an important topic in elections globally. In the United States, many of the presidential candidates, particularly within the Republican Party, have publicly expressed their interest in crypto and blockchain. Yesterday, Ripple CEO Brad Garlinghouse took to the X social media platform on the subject, stating:”Team @Ripple is putting a stake in the ground, leading the charge with other industry leaders to support pro-innovation and pro-crypto candidates in the 2024 US election cycle. The US cannot afford to continue taking a back seat on the global stage.“With Indonesia’s election frontrunners, Prabowo and Gibran, expressing interest in the sector, it remains to be seen how this focus on crypto will resonate in the upcoming political debate on Feb. 4.