The divergent regulatory approaches between the West, particularly the United States, and Asia, like Japan, regarding cryptocurrencies and blockchain technology are likely to have a significant impact on the general adoption of cryptocurrencies.
Crackdown By The US
The heavy crackdown on cryptocurrencies initiated by the United States, has created a challenging environment for cryptocurrency businesses and investors. Harsh regulations and increased scrutiny have created uncertainty and hindered innovation in the crypto space. This situation has led to a decrease in the attractiveness of the United States as a destination for crypto and blockchain companies.
Japan Fosters Innovation Via Crypto
On the other hand, Asian countries, such as Japan, have been actively working on creating crypto-friendly regulations to foster innovation and accommodate more firms in the market. The planned relaxation of curbs on margin trading in Japan is a prime example of the region’s efforts to attract cryptocurrency businesses. By allowing leverage for retail players of four to ten times, Japan aims to make itself more attractive for crypto and blockchain companies. This move could potentially encourage more trading activity in the market and stimulate the growth of the crypto industry.
Japan Regulators Willing To Engage With Digital Assets Businesses
The Japan Virtual & Crypto Assets Exchange Association’s push for increased leverage and the involvement of the Financial Services Agency (FSA) highlight the willingness of Japanese regulators to engage in discussions with digital asset businesses. The FSA’s requirement for strong justifications aligns with the government’s objective of expanding blockchain-related sectors. This proactive approach from regulators sends a positive signal to the industry and demonstrates a commitment to fostering the growth of cryptocurrencies and blockchain technology.
Different Regulatory Approach
The contrasting regulatory approaches between Asia and the West could result in a shift of crypto-related activities and investments toward Asia. Cryptocurrency businesses may choose to relocate or establish operations in countries with more favorable regulatory environments, such as Japan or Hong Kong. This potential migration of companies and capital could lead to a concentration of crypto-related activities in Asian countries and contribute to the region’s dominance in the blockchain space.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
Image Source: adiruch/123RF // Image Effects by Colorcinch
