2021 has seen significant growth in digital assets. This growth has made organizations and people more aware of investing in cryptocurrencies. Moreover, this has encouraged various countries to regulate and uplift a fair trading environment. As a result, many countries in Southeast Asia have also started adapting to international standards and developing a regulatory framework to govern cryptocurrency.
Cryptocurrencies are rapidly blooming all across the globe. The digital nature of these assets has put forth the need to regulate, verify and secure the transactions. However, when it comes to cryptocurrencies, Asian countries are in constant disagreement. While some Southeast Asian countries have banned cryptocurrencies, others have realized their importance and are implementing various regulations.
Let’s take a look into how some Southeast Asian countries are regulating cryptocurrencies.
Crypto activity has been fairly common in the South-East Asian region for several years. Despite this, there was little to no regulation of such transactions up until 2017. During this year, the Philippines became one of the first countries in this region to announce crypto guidelines. This happened via the Bangko Sentral ng Pilipinas (BSP), which issued its guidelines for virtual currency exchanges.
In 2018, the Securities and Exchange Commission (SEC) of Thailand also announced key regulations governing the crypto industry. This move triggered the other leading regulators in the region, as Indonesia and Singapore also formulated rules about crypto transactions during 2019.
At present, almost all countries in the South-East Asian region have started to take a keen interest in regulating crypto-asset transactions. For instance, Thailand has been proactive in grabbing opportunities and being an active player in the digital payment market. As a result, there has also been a drastic surge in crypto account holders from 160,000 to 700,000 in 2021. The account opening process is online. However, the Anti-Money Laundering Office (AMLO) introduced new regulations, effective from September 2021.
Singapore is another Southeast Asian country that embraced the crypto market and is implementing frameworks. Currently, Singapore has more than 230 homegrown blockchain organizations. Earlier in the year 2020, the Payment Service Act (PSA) stipulated a law that requires an entity to have a license to process any crypto transactions, storage, or exchanges.
To keep up with the proliferating growth in the cryptocurrency industry and match the international standards, the Monetary Authority of Singapore (MAS) has amended the PSA to alleviate the financial threats.
In Malaysia, all the trades related to cryptocurrency must comply with Securities Commission Malaysia (SC Malaysia) and Bank Negara Malaysia (BNM). SC Malaysia has also been attentive in regulating the ICO’s (Initial Coin Offerings) to promote fair trading. In the Philippines, after observing an increased response in the crypto trade, the BSP has implemented new guidelines to facilitate financial services through digital assets. Some other regulations were enforced later, which include two-fold ICO assessment.
It is evident that regulators within the South-East Asian region are tightening their grip on crypto transactions. The latest set of regulations have been expanded to cover areas such as ICOs and crypto exchange activities. This trend will likely continue in the near future, as the volume of crypto transactions is only increasing. Regulators within the region will continue to develop clear guidelines that govern crypto transactions.
With an increase in growth within the crypto market, governments now need to regulate cryptocurrencies and have disparate stances. However, these regulations are scarce across Southeast Asia and give us a view that countries still need a lot of development to administer and secure digital transactions.
Very few countries in Southeast Asia have a regulatory framework in place to deal with the crypto trade. There is a strong need to bridge the gap in these regulatory measures to match the pace of the growing digital economy.
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