Tuesday, August 16, 2022

Asian countries actively participate to develop crypto regulations

The Takeaway:

Crypto-friendly Asian states of Singapore, Thailand, and Hong Kong work towards progressive cryptocurrency & digital asset regulations.

Singapore, Thailand, and Hong Kong actively involved in developing regulations for cryptocurrencies and security tokens. Asian countries move to more progressive crypto regulations.


Thailand: State of Crypto friendly Regulations

The lawmakers in Thailand have created the most progressive set of crypto regulations. A well- defined guideline has been created for local exchanges, crypto assets, and security token offerings. The state’s government announced a Digital Asset Decree in May of 2018 that outlines the list of requirements necessary to provide crypto-related services.

The decree points out all the rules and policies to be followed for transactions concerning cryptocurrencies and digital tokens and is managed by Thailand’s Securities & Exchange Commission (SEC). It covers the primary issuing activities like fundraising (token issue activity) and secondary marketing activities like trading ( token exchange activity). 

The Thai government offers three types of crypto-related licenses- Digital Asset Exchange License, Broker License, and Dealer License. Each license outlines the set of business activities that companies are permitted to carry out. 

The Digital Asset Decree also places restrictions on token issuers, which are required to be carried out via approved or licensed Initial Coin Offering (ICO) platforms. The authorities have also provided a list for all the acceptable cryptocurrencies that qualify as investments for Initial Coin Offerings and might be paired or traded with other assets on exchanges which include- Bitcoin, Ether, XRP, and Stellar.

The country’s regulators are currently working on developing rules and policies for protective solutions for crypto assets. At the moment, it’s unclear whether Thailand’s existing securities laws apply to cryptocurrencies, or if new crypto regulations will be drafted.


Singapore: Authorities Work to Draft Crypto Guidelines

The central bank of Singapore, the Monetary Authority of the nation, has released a number of guidelines in November 2018, titled as “A Guide to Digital Token Offerings.” The record specifies which cryptos should be regulated under the country’s Securities and Futures Act (SFA).

In case the crypto tokens are traded in the capital markets and include products like securities or derivatives contracts, then they must be monitored by SFA’s rules. Singapore’s current licenses can be applied in such transactions; the rules vary depending on the type of transactions carried out by ventures. There are different policies and rules for token issuers, exchanges, and financial advisors.

Singapore’s SFA, in particular, only regulates crypto-assets that qualify as capital markets products. Other digital tokens such as BTC, ETH, etc. may be regulated under the Payment Services Act (PSA). The PSA will be adopted in the coming months and will have a different type of license.

Singapore’s administration has also been working on custody solutions for the cryptocurrencies. The Monetary Authority of Singapore (MAS) issued the Recognized Market Operator (RMO) license to 1exchange, the country’s first private securities trading platform that encourages digital token exchange in November 2018. Reportedly SGX, a Singapore based stock exchange, has also invested in 1exchange.


Hong Kong: Government puts in Efforts for Crypto Regulations

Hong Kong, the financial capital of Asia, has also been putting efforts on crypto regulations. The statement was issued by the Securities and Futures Commission (SFC) on ICOs in September 2017.

SFC released a circular & statement on the regulations applicable for digital asset portfolio managers, fund distributors, and exchange operators in November 2018. The new guidelines aim at providing clarity on the regulations for the efficient management & investment of digital assets. 

According to the new rules, the state says that any individual that markets or sells security token in Hong Kong is obligated to be registered for Type 1 regulated activity. Type 1 involves dealing in securities regulated under the Securities and Futures Ordinance (SFO). Hong Kong has lately been working on certain policies for regulating crypto exchange platforms.

SFC has called on the exchange owners to get involved in its regulatory sandbox, which would concentrate on figuring out the type of license to be issued to trading platforms. Currently, custodial activities are not being regulated by Hong Kong’s SFC. Nevertheless, firms or entities serving as custodians have to operate as a Public Trust Company. It is also compulsory for the companies to apply for the TCSP license (Trust or Company Service Provider license) issued by the state’s Companies Registry.

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Cheng Wei Chan
Cheng Wei Chan
Cheng is an AI & APP Engineer based in Taipei City, Taiwan. After completing his graduation in Computer Science from National Taiwan University, he dedicated his life into researching and writing about technologies such as blockchain, cryptocurrency, artificial intelligence and application development.

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