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Hong Kong Bitcoin Approval: How Crypto Adoption is Growing in Asia

The Hong Kong Bitcoin approval was received with cheers from every aspect of Web3. Despite being limited to a specific region of the country, it shows significant progress. While there is considerable buzz about the ETF launch on April 30th, China’s situation does not reflect the whole of Asia. The country seems to be a “latecomer” in this case.

Many other countries in this continent have friendlier approaches to cryptocurrencies than China. Japan, for example, is arguably the most crypto-friendly country globally. This country recognizes Bitcoin and other blockchain tokens as legal tenders and places no restrictions on ownership and investment.

Alongside Japan, Singapore is another Bitcoin-friendly country that properly regulates digital assets to protect users. The nation has strict AML and CFT regulations to prevent individuals from using cryptocurrencies for illegal or criminal purposes. Virtual Assets Service Providers must meet certain requirements before obtaining and retaining their licenses.

Moving on, Malaysia is another Asian state where cryptocurrency is legal. The Security Commission regulates digital assets with the Capital Markets and Services Order 2019. In 2020, the SC released new guidelines enabling businesses to raise funds by selling tokens. However, these enterprises must use approved crypto exchanges.

Crypto Adoption in Europe: Market in Crypto-Assets (MiCA)

What is MiCA? Market in Crypto-Assets is the first robust regulatory framework governing the use, ownership, and management of crypto-assets in Europe. This guideline comes from the best legislation guiding traditional securities that apply to stablecoins and other blockchain assets.

In simpler terms, the MiCA comprises existing financial laws the European Union believes are equally applicable to non-traditional assets. These regulations aim to mitigate the risk of blockchain securities and ensure financial stability.

MiCA defines crypto assets as securities and investments that use decentralized ledger technology. Despite the umbrella classification of DLT-based investments, the regulatory framework distinguishes between cryptocurrencies and non-fungible tokens.

These are the classification of crypto assets under the MiCA:

Established in 2019, the Market in Crypto-Assets aims to accomplish the following:

Hong Kong Bitcoin Approval: What The Governments Must Do to Support Crypto Adoption

While Asia seems to be opening up to Bitcoin, there is still significant work to be done. For example, India still taxes 30% on crypto transactions, mining, staking, gifting, and airdrops. Worse still, people cannot include losses when filing their taxes. This means that a trader cannot account for a $500 while taxes on a $300 gain.

There are several similar instances where the government implements a blanket policy without considering specifics. This indicates that most institutions do not fully understand crypto and are not making any effort to do so. It further implies that the authorities are either too lazy or do not care about the industry. They are only paying more attention to the sector because it is growing exponentially.

According to Forbes, the crypto industry is currently worth $2.39 Trillion. This is a significant reduction in value from the $3 trillion in 2023 when Bitcoin hit an all-time high. Despite the drop, experts project that the sector will rebound in the coming months. These claims are not surprising, especially with the recovery from the slump in 2022, where Web3 lost more than $2 trillion.

Looking at the mammoth number above, it is unsurprising to see why the government is interested in the industry. While we cannot fault the authorities for paying more attention to Web3, their intent and approach and intent is wrong.

Conclusion

Instead of trying to tax people to death in a bid to deter them from crypto-asset investments, the authorities should focus more on understanding the technology. It is disappointing that institutions are too lazy to understand DeFi and cryptocurrencies. Instead, they choose to replicate financial legislation on non-traditional assets and investments.

Without a proper understanding of cryptocurrencies, DeFi, NFTs, etc, the government cannot introduce the right legal framework for regulation. Therefore, the authorities cannot protect users. Unfortunately, it seems as though they are more focused on generating revenue through taxes and catching criminals than protecting consumers.

At Tectum, we prioritize user protection over everything else. This is why we use zero-knowledge proofs to protect user information when processing transactions. Furthermore, our noncustodial wallet – SoftNote enables people to send and receive Bitcoin for a 1% fee. This is the cheapest transfer cost, demonstrating how we value giving consumers a premium trading experience.

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