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Crypto Regulation in Asian Nations Overtakes US As The Philippines Commits To Cryptocurrency Framework

Last Updated May 11, 2024 10:12 AM
Shraddha Sharma
Last Updated May 11, 2024 10:12 AM

Key Takeaways

  • The Philippines Securities and Exchange Commission (SEC) is set to release new crypto regulations in H2 2024.
  • The guidelines aim to protect investors and regulate cryptocurrency trading within the country.
  • Meanwhile, Asia sees movements with new ETFs in Hong Kong and potential legal changes in Japan.

Frameworks for digital currencies are being incoporated in Asian countries as they are taking steps to structure and enhance crypto regulation. Recently, the Philippines has made a definitive move, with its SEC gearing up to introduce a detailed regulatory framework for investor protection in the second half of 2024. 

The shift not only marks the region’s growing commitment to integrating cryptocurrencies into their regulated financial systems but also positions Asia as a major player against the US. 

The Philippines Commits to Cryptocurrency Regulation

The Philippines Securities and Exchange Commission (SEC) announced its plans to finalize and release a regulatory framework for crypto trading in H2 2024. SEC Chairperson Emilio B. Aquino told  the local papers that the guidelines are designed to safeguard the interests of investors by regulating crypto trading activities.

“We have to come up with (a framework); we will issue it by the second half of this year,” said the official.

Aquino’s statement comes amid the SEC’s ongoing efforts to clamp down on unregistered trading platforms. The government has demonstrated a firm stance against non-compliant operations. 

In the November 2023 circular, it said in a circular unregistered platforms had a 3-month deadline before they faced a ban. The SEC pulled up Binance on November 29 which led to a crackdown on unauthorized domestic operations.

For instance, on April 19, the SEC instructed Apple and Google to delist the Binance app from their stores.

 

Republic Act No. 8799, or the Securities Regulation Code (SRCmandates that all trading platforms secure the necessary licenses before operating.

Chairperson Aquino mentioned that such actions are routine, drawing from past experiences with lending apps where the response from app stores was swift and cooperative.

In March, the SEC released an advisory  against eTorostating, that it is  “not authorized to sell or offer securities to the public in the Philippines.

Aquino reassured that the SEC is not targeting any specific platform but is merely enforcing the law to protect Filipino investors. 

He also acknowledged that while some savvy investors might circumvent restrictions using virtual private networks, the responsibility to regulate the platforms falls squarely on the SEC’s shoulders. 

Asia’s Knows What It Is Doing 

While the Philippines is tightening its crypto regulations, the broader Asian market is also witnessing major developments. For instance, Hong Kong recently saw the launch of several spot Bitcoin exchange-traded funds (ETFs), which, despite a lukewarm initial reception, marked a major step forward in mainstreaming cryptocurrency investments in the region.

Further, Singapore continues to make strides toward becoming a global digital currency hub, reflecting a clear vision to lead in the crypto revolution. On the other hand, Japan is advancing its legal framework to better integrate cryptocurrencies into its economic structure. A recent government bill  proposed allowing venture capital firms to hold digital assets directly, showcasing Japan’s adaptive approach in line with Asia. 

Tom Kiddle, co-founder of European crypto platform Palisade told CCN, “There are a few jurisdictions in Asia that are taking the lead in crypto regulations. Singapore, with its Payment Services Act, and Hong Kong, with its clear licensing rules for crypto, encourage crypto businesses to set up shop.”

R. Venkatesh, Senior Vice President, Public Policy at Indian crypto exchange CoinSwitch, believes Asian nations have demonstrated a more proactive and collaborative approach to understanding and regulating virtual digital assets (VDAs).

He said, “They have established robust regulatory frameworks that offer legal certainty for businesses operating in the crypto space, addressing key aspects such as anti-money laundering, know-your-customer requirements, and security standards for digital asset exchanges.”

Venkatesh highlights that the clear regulations have increased investor confidence and encouraged innovation in the sector.

He suggests that if this trend continues, it could lead to increased collaboration and partnerships between Asian countries and the rest of the world, potentially positioning Asia as a dominant force in the virtual digital asset (VDA) space.

Asia Vs. US: Clarity in Framework 

The imminent release of cryptocurrency regulations in the Philippines, coupled with the regulatory shifts across Asiaheralds a new era of digital currency integration and clarity. 

The new rules position Asia as a leading force ahead of the US where regulatory enforcement has become the norm for clarity. As Asian regulations come into effect, they can promise to unlock new opportunities for investors and solidify the region’s reputation as an innovative financial space.

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