In the realm of cryptocurrency regulations, the United States has faltered in recent years despite its reputation for financial and technological leadership. The lack of clear and consistent regulatory frameworks has opened the door for other countries, particularly in the Middle East and Asia, to take the lead.
The US has faced difficulties in regulating the crypto industry. Regulatory bodies like the SEC have taken inconsistent and often hostile stances, as seen in high-profile lawsuits against Ripple and Coinbase. These actions have deterred innovation and prompted some crypto firms to relocate to more favorable jurisdictions. The SEC’s attempts to fit digital assets into existing securities and commodities laws, which were not designed with crypto in mind, have left the industry in a state of uncertainty.
In contrast, high-growth economies such as Indonesia and Malaysia have introduced novel approaches to crypto regulation. Indonesia’s Commodity Futures Trading Regulatory Agency classified all digital assets as commodities back in 2019, while Malaysia’s Securities Commission has established a comprehensive framework for crypto exchanges with strict licensing, investor protection, and anti-money laundering measures. These regulations have enhanced trust and reduced fraud, leading to a thriving crypto market. For instance, Indonesia’s crypto market saw a 350% increase in transactions from January to October 2024, surpassing $30 billion and making it the third-largest globally in terms of adoption, ahead of the US.
The reason high-growth markets are more advanced in crypto regulations lies in the greater utility of crypto in these regions. Crypto helps overcome issues like high remittance costs (averaging 6.65% of the amount sent) and limited access to assets and investment. In the Philippines, remittances account for nearly 10% of GDP. Additionally, digital assets serve as a hedge against inflation, and tokenized gold offers a more accessible alternative to physical gold.
While crypto regulations in these emerging markets are not flawless and will continue to evolve, they understand the importance of tailoring rules to real digital asset use cases. The future of crypto will be shaped by those who utilize it to solve real-world financial problems, rather than by Wall Street or Silicon Valley.
Related topics:
What is the Most Anonymous Cryptocurrency
