Asia offers clearer regulatory frameworks, precedents for successful government and public-private partnerships, as well as the capital to support such an influx of Web3 projects.
While 98% of stablecoins are currently denominated in U.S. dollars, I predict that will change as Asian countries offer more regulatory clarity on this point. For example, Hong Kong’s Monetary Authority is introducing a mandatory licensing regime for stablecoin issuers. Meanwhile Japan has vowed to start accepting stablecoins in the near future. Three domestic banks have already announced their plans to issue compliant stablecoins under the framework. And the Monetary Authority of Singapore as well has proposed rules for stablecoins, back in October 2022.
Besides clear regulations, or at least the promise of upcoming frameworks, there are additional steps governments in Asia are taking to support Web3 development. For example Japan’s national strategy has a Web3 component, and South Korea’s government is even investing $200M in its metaverse ecosystem. Hong Kong has also vocally committed to establishing itself as a regional, even global crypto hub, driving many crypto firms, including mine, to look into acquiring virtual asset licenses in the city.
Asia’s Chance to Shape the Future of Crypto Finance
Ultimately, these examples show how an opportunity is opening up for Asia to shape the future standard for stablecoins, as well as crypto in general. Even though there may be strict compliance requirements in the region, regulatory clarity is the best way to improve customer protection and prevent wrongdoing. In general, an approach to regulation that encapsulates a willingness to collaborate, listen, and work to protect customers without stifling innovation is key. Asia seems to be getting that balance right. And that message is already starting to spread.
