Cryptocurrency needs time in Asia.

Contrary to expectations, many Southeast Asian countries, such as Thailand and Singapore, have taken precautionary measures and maintained a safe distance from the Bitcoin Exchange Traded Fund (ETF) that was recently approved for trading on the US Securities and Exchange Commission (SEC).

Coinsfera Bitcoin Shop allows you to complete the buying and selling of bitcoin in Dubai within 1 minute. Photo: BNN

Immediate response

Since January 10th, ETFs have been traded on publicly traded markets, allowing investors to track the price movements of an asset without directly owning the underlying asset. This means ETFs are the easiest way to invest in assets or groups of assets such as gold, speculative bonds, or bitcoin without having to directly purchase the asset. On its first day of trading, spot bitcoin ETFs in the US attracted $4.6 billion in capital.

Analysts believe this is a major victory for Wall Street and a triumph for the cryptocurrency industry after nearly two years of turmoil that led to the collapse of several cryptocurrency companies, particularly FTX in November 2022. Supporters expect this step to boost demand for cryptocurrencies, helping them move further into mainstream finance. However, the SEC stated that it remains skeptical about cryptocurrencies and that the decision does not mean it has confirmed or approved Bitcoin.

Caution is still advised.

In contrast to Wall Street, Asian markets reacted less enthusiastically to the news of ETFs being traded on public exchanges, with some in Southeast Asia showing rather lukewarm reception. The Monetary Authority of Singapore argued that cryptocurrency trading is “highly volatile and speculative,” making it unsuitable for retail investors, reiterating its ongoing disapproval. Meanwhile, the Securities and Exchange Commission of Thailand issued a decision regarding spot bitcoin ETFs. In a statement on January 16th, the agency stated that the development of spot bitcoin ETFs in overseas markets is still in its early stages, and such ETFs may not provide direct economic value appropriate to Thailand's current context.

The above reaction stems from the fact that both Singapore and Thailand have witnessed the bankruptcy of major players in the cryptocurrency sector as prices plummeted in 2022, such as Three Arrows Capital and Zipmex. Singapore, in particular, has implemented some of the strictest regulations on cryptocurrencies to protect retail investors. The Central Bank of Singapore has introduced new regulations to safeguard individual interests by restricting cryptocurrency trading, including prohibiting credit limits for the purchase of volatile digital assets. Among the new measures, which will take effect in stages from mid-2024, incentives encouraging individuals to trade digital tokens are prohibited; free trading credit or the use of digital assets as rewards are also banned.

According to Nikkei Asia, while financial regulators in Singapore, Thailand, and South Korea have taken a tougher stance on cryptocurrencies, financial hubs like Hong Kong and Dubai are trying to attract cryptocurrency-related investment. Last month, the Hong Kong Monetary Authority (HKMA), along with the Financial Services and Treasury Department (FSTB), released a public consultation document to gather public opinion on the regulatory regime for stablecoin issuers. Additionally, the HKMA announced licensing and the establishment of a “sandbox” to communicate supervisory expectations and compliance guidelines to potential stablecoin issuers.

Meanwhile, data from Chainalysis shows that in 2023, India held the top position in the global cryptocurrency adoption index, and also ranked as the world's second-largest cryptocurrency market by trading volume. However, cryptocurrency businesses in the country are facing significant challenges due to strict tax regulations, driving investors and businesses to Dubai – considered a new haven for the rapidly developing cryptocurrency ecosystem with low taxes and simplified business registration procedures.

Analysts predict that the number of cryptocurrency owners could increase from 850 million to 950 million in 2024. Experts also believe that, with clear legal frameworks and guidelines, albeit cautiously, Asia will become one of the fastest-growing cryptocurrency economies globally.

KHANH HUNG

Source: https://www.sggp.org.vn/tien-dien-tu-can-thoi-gian-o-chau-a-post723748.html