Hong Kong Setting High Bar on Crypto Rules

Japan’s Ministry of Economy, Trade and Industry announced on Friday that it has approved a revision to the Industrial Competitiveness Enhancement Act, with the aim of broadening strategic investment opportunities. According to a local report from crypto publication Coinpost, this move would open avenues for venture capital (VC) firms to invest in projects exclusively issuing cryptocurrencies. Pending parliamentary deliberationWith cabinet approval secured, the revised bill will now undergo introduction and deliberation in the current session of the Diet, Japan's parliament. If passed, the amendment could pave the way for VC funding of Web3 startups in exchange for crypto assets. The Ministry highlighted that the amendment aligns with objectives to foster new businesses and industrial investment, with a particular focus on empowering Japan's economy through support for medium-sized companies and startups. Reports of Japan's intention to ease regulations for VC firms investing in crypto startups first emerged in September.Photo by Manuel Cosentino on UnsplashStablecoin frameworkJapan has further work to do to implement a comprehensive overall framework for digital assets. A move by the Japanese Financial Services Agency (FSA) earlier this month to implement measures designed to guard against unlawful crypto transfers is a case in point. The measure doesn’t appear to account for knock-on effects on the peer-to-peer (P2P) transactions market. However, its stance on crypto regulation is best characterized by efforts to establish a robust legal framework for stablecoins and digital assets. The nation has positioned itself as a global leader in stablecoin regulation, signaling plans to embrace Web3 technologies while maintaining stringent measures to protect users. Japan's stablecoin regulations, while providing clarity, present challenges for issuers, especially regarding profitability in a low-interest rate environment. Compliance with requirements such as maintaining 100% of assets within Japan's trust accounts poses operational hurdles for yen-based stablecoins. Recent developments indicate industry players' efforts to navigate regulatory requirements. Mitsubishi UFJ Financial Group, Japan's premier banking conglomerate, has engaged with stablecoin issuers to explore leveraging its blockchain platform. Web3 hope amid economic difficultiesJapan’s economy has seen better days. Last week, the bitcoin-yen trading pair saw bitcoin reach a record high valuation against the yen. New technologies like Web3 are seen as a potential mechanism for the East Asian country to improve its economic performance. In July of last year, Japanese Prime Minister Fumio Kishida emphasized the country’s commitment to nurturing the Web3 sector within Japan. Last year, Yudai Suzuki, the founder of a Tokyo-based Web3 incubator, suggested that the country could rediscover its past prowess at the forefront of innovation and technology by embracing blockchain and Web3. Japan's regulatory approach appears to be shifting to accommodate such sectoral growth and development. Last July, the Japan Blockchain Association (JBA) called on the government to address an issue within the Japanese tax code that was hampering the industry. That tax reform was subsequently implemented in December. This latest initiative, too, appears to underscore Japan's commitment to fostering innovation and economic growth through enabling further investment into emerging Web3 enterprises. 

A regulatory divide regarding the digital asset sector is emerging across Asia. While China is moving to strengthen its prohibition on cryptocurrency operations to ensure financial stability, Central Asian states such as Kazakhstan and Turkmenistan are increasingly formalizing frameworks to integrate and regulate the industry.Photo by Road Ahead on UnsplashChina cites renewed crypto speculationAccording to Reuters, the People’s Bank of China (PBOC) has reaffirmed its prohibition on business activities involving digital assets, citing a renewed wave of speculation as a complication in managing financial risks. At a Nov. 28 meeting on crypto regulation, the central bank reiterated that commercial activity involving cryptocurrencies remains illegal. PBOC officials stated that enforcement against unlawful financial operations tied to cryptocurrencies would be intensified to safeguard economic stability. The central bank identified stablecoins as a primary concern, noting that they fail to meet customer identification standards and broader anti-money laundering (AML) requirements. Officials warned that these assets could create vulnerabilities to fraud, money laundering, and unregulated cross-border capital flows. Kazakhstan mulls $300M crypto moveIn contrast to Beijing’s elevated oversight, Kazakhstan is exploring the integration of digital assets into its financial reserves. According to BeInCrypto, National Bank Chairman Timur Suleimenov indicated on Nov. 28 that the monetary authority is considering an allocation of up to $300 million into crypto assets. However, he clarified that deploying the full amount is unlikely. Suleimenov explained that any potential investment would be drawn from the central bank’s gold and foreign-exchange reserves rather than the National Fund. He added that the National Bank of Kazakhstan intends to wait for market conditions to stabilize, citing recent volatility as a factor making the timing of such an investment uncertain. The latest development comes after Bloomberg Law reported last month that the country is preparing to launch a crypto reserve fund valued between $500 million and $1 billion as early as next year. This proposed fund is expected to target exchange-traded products and industry-related companies rather than direct crypto purchases, with capital potentially sourced from repatriated assets and mining proceeds. Simultaneously, the government is advancing physical infrastructure for the sector. In May, President Kassym-Jomart Tokayev unveiled plans for a "CryptoCity" pilot zone in the Alatau development north of Almaty. Under this government-approved sandbox program, authorities are testing blockchain-based tools for taxation, investment, and decentralized identity systems, with the aim of positioning Kazakhstan as a regional hub for innovation. Turkmenistan to launch licensing rulesFurther deepening the regional trend toward adoption, Turkmenistan has moved to establish a formal legal infrastructure for the sector.  Another Reuters report said the country recently passed legislation to legalize and regulate digital assets, which President Serdar Berdymukhamedov has signed into law. Scheduled to take effect on Jan. 1, the legislation creates a licensing regime for crypto exchanges and mining operations. A government spokesperson said the law spells out the legal and economic status of virtual assets, covering their creation, storage, circulation, and other functions, and aims to boost digitalization and draw foreign investment. Despite their differing approaches, the three countries reflect a shared recognition of digital assets’ growing relevance in global finance. China continues to view cryptocurrencies as a source of systemic risk, while Kazakhstan and Turkmenistan are testing whether regulation, licensing, and selective investment can deliver economic gains without compromising stability. Together, these diverging paths underscore a broader debate over whether engagement or exclusion offers a more resilient long-term model. 

Korbit Joins Zero-Fee Crypto Trading Trend in South KoreaSouth Korean cryptocurrency exchange Korbit reduced trading fees to zero on October 20 (local time) for all of the cryptocurrencies supported on the platform. This move follows in the footsteps of Bithumb, another Korean exchange that introduced zero-fee trading earlier this month.Photo by Jeremy Perkins on UnsplashNo extra registration requiredKorbit users can now benefit from zero-fee trading immediately, with no special registration required. This arrangement will continue indefinitely until further notice.Market maker incentives continueKorbit’s market maker incentive program will remain in place. Under this program, users earn 0.01% of the transaction value whenever they place an order.Oh Se-jin, CEO of Korbit, underscored the exchange’s commitment to enhancing user satisfaction. He pointed out several initiatives they’ve undertaken, including enhancing the login system, raising the daily Korean won (KRW) deposit and withdrawal limits, and eliminating transaction fees. He further noted that by removing trading fees, they aim to alleviate the cost pressures of crypto trading for their users and breathe new life into the market.