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Investors and industry players find that regulation is likely to play a major role in the direction that digital assets will acquire as many as digital exchanges in many territories in Asia.
FREMONT, CA: Digital assets are carving a niche among investors and new types of blockchain-based securities and exchanges are coming up, prompting regulators to take a stand. However, rolling out frameworks tend to take a long time, leaving firms and investors in regulatory limbo. Hong Kong and Singapore are the leading jurisdictions for digital assets and they have been rolling out consultation papers and regulatory frameworks to police digital exchanges. To obtain a license from the Securities and Futures Commission, Hong Kong Financial Services requires virtual asset exchanges. Presently, virtual exchanges function under an opt-in regime and are licensed under the same canopy of regulations similar to the traditional trading and security firms. Singapore has evolved itself as a centre for innovation where fintech firms are setting up shops and fintech funding has reached $3 billion this year. Crypto.com, the crypto exchange firm, shifted its headquarters from Hong Kong to Singapore. The Monetary Authority of Singapore is yet to filter out 400 applications from digital token players for licensing approvals. Around 70 are currently functioning on temporary exemption licenses and only a few have been permitted approvals. The Monetary Authority of Singapore seeks to facilitate innovation while guaranteeing that adequate controls are in place to tackle key challenges like money laundering and terrorism financing.
Cryptocurrency is one type of digital asset that possesses the potential of tremendous use across several industries. Experts are hoping that an enhanced regulation coming up is likely to boost confidence in digital assets and underlying technologies. All of this contributes to the fact that the regulatory arbitrage window is either hiring fast or even disappearing which is both a plus and minus for the industry. However, the incline towards legitimacy showcases that for true institutional adoption to happen, the product set that surrounds the digital asset universe has to be more secure.
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