Australians lost AU$113 million (US$81.5 million) to crypto investment scams in the first five months of 2022, according to new data from ScamWatch cited by consumer watchdog the Australian Competition and Consumer Commission (ACCC). The ACCC noted that most of the reported losses, which occurred in the January 1 to May 1 period, were investment scams, and they rose by 314% (including non-crypto scams) compared to the same period last year. This situation underscores the need for Australia to implement comprehensive regulation for digital assets, as crypto use among Aussies continues to rise steadily.
It has not been the best few months for India’s cryptocurrency market. New tax legislation is putting a damper on trading and investment, which are also taking a beating amid a broader crypto bear market. At the same time, fintech funding in India may finally dry up – a least for a while – as investors tighten their belts.
In February, Indian finance minister Nirmala Sitharaman said that the Reserve Bank of India (RBI) would launch a central bank digital currency in the 2022-23 fiscal year. In her budget speech, she said that introducing a digital rupee would give a big boost to the digital economy and lead to a more efficient and cheaper currency management system. Yet since then, there has been no obvious progress on India’s CBDC project, and even some measured pushback against the idea.
South Korea’s new president Yoon Suk-yeol entered office planning to make his country friendlier to cryptocurrency. During his campaign, Yoon said, “To realize the unlimited potential of the virtual asset market, we must overhaul regulations that are far from reality and unreasonable.” Though Yoon likely remains keen to carry out his campaign promises about crypto, it will be no easy task. He faces conservative, crypto-skeptical financial regulators, a parliament controlled by South Korea’s main political opposition, the Democratic Party of Korea, and now the fallout over the abrupt collapse of the TerraUSD stablecoin.
The Philippines is taking a different approach to crypto than many other Asian countries, most notably in a tentative acceptance of the use of decentralized digital currencies for payments. Thailand, Vietnam and Indonesia have all banned crypto for payments outright, while Singapore has licensed just a handful of companies to use digital assets for payments.
North Korea’s resilience is often surprising to outside observers. After all, Pyongyang is the only communist East Asian country to not formally launch economic reforms. It is impoverished and isolated. Further, U.S.-led sanctions imposed from the mid-2000s have made it harder for North Korea to conduct international trade. However, North Korea has developed a formidable cybercrime capability in order to evade the sanctions, and it is increasingly targeting digital assets whose decentralized nature make them vulnerable to determined hackers.
The use of decentralized virtual currencies is growing expeditiously in Indonesia and Southeast Asia’s largest economy has the highest crypto adoption rate in the world along with Brazil, according to a new study by crypto exchange Gemini published in early April. The report found that 41% of Indonesians aged between 18 and 75 years old with an income of more than $14,000 per year own crypto assets.
The need for comprehensive regulation of decentralized virtual currencies in Australia is greater than ever as crypto ownership in the country steadily rises. New research by Roy Morgan shows that 1 million Australians aged 18 and up own at least one cryptocurrency with the average crypto investment in the country roughly AU$20,000. Unsurprisingly, Bitcoin and Ethereum are the most popular cryptocurrencies with investors, though some also hold Ripple, Cardano, Dogecoin, Shiba Inu, Solana, Binance Coin, Litecoin, Cronos and others.
There is more than one way to drastically curtail crypto activity in a country. China’s approach has been largely effective, but is generally not applicable elsewhere. In the case of India, which has a very different political system than China, blanket bans could face legal challenges while being difficult to enforce. A better approach is to tax the heck out of crypto transactions, which regulators and some politicians almost certainly hope will reduce the attractiveness of the asset class.
When it comes to the cryptocurrency policies of Asia’s regulators, it pays to not be overly sanguine. While most regulators in Asia are happy to let crypto evolve as a regulated asset class, payments are another story. Thailand is the latest Asian country to crack down on using crypto for payments.
On March 23, Thailand’s Securities and Exchange Commission on Wednesday banned the use of cryptocurrency for payments, effective April 1. That means no bitcoin or any other crypto can be used to purchase goods and services. Digital assets payment operators will be given a grace period through the end of April to cease providing payment services. Trading of digital assets for investment purposes will be not affected by the SEC’s ban on payments.
South Korea’s people have long been more enthusiastic about crypto than the country’s regulators and politicians. By one estimate, in 2021 one in three South Koreans either invested in crypto or was paid in digital assets. A study by the Korean government’s Financial Intelligence Unit (FIU) found that South Korea’s cryptocurrency market value was estimated at 55 trillion won (US$45.6 billion) as of the end of last year, that 15.2 million Koreans have accounts and 5.6 million registered users of crypto actually trade. Yet heading into Korea’s recent presidential election, the country was tightening oversight of cryptocurrencies in a manner detrimental to market growth.
Could Malaysia become a crypto hub in Asia? A recent CoinDesk article made that case, pointing out that some of the necessary ingredients are already there, such as a common law system and institutional use of English. Further, Malaysia's crypto ownership rate of 19.9% is above the global average of 15.5%, according to Finder’s latest Cryptocurrency Adoption Index.
With CBDC hype subsiding – at least in most advanced economies – Japan’s plans for a digital yen are coming into focus and unsurprisingly, Tokyo is in no rush to launch a digital fiat currency even if it sees some upside to the idea in the long term. Japan has no compelling policy reasons to quickly roll out a digital yen, regardless of what China is doing. And in fact, Beijing spent about six years getting the digital RMB ready and it remains in the pilot stage.
Remember when more crypto was traded in China than any other country in the world? Though it was less than five years ago, it seems like a lifetime ago. In 2021, China accelerated a long-running crackdown on decentralized virtual currencies, banning just about everything crypto-related but possession. While some diehard crypto enthusiasts in China may carry on, Beijing has made crypto trading more trouble than it is worth for most Chinese. With crypto out of the way, Beijing can now concentrate on developing its own blockchain ecosystem.