Wave electronic money is flooding into Southeast Asia, a very young region where half the population is under the age of 30. Countries in the region do not want to miss out on this investment channel, but at the same time want to ensure that cryptocurrencies are put under regulation to avoid downsides such as speculation, becoming a money laundering channel or tax evasion.
According to a report by the Gemini electronic exchange released earlier this month, Indonesia is the leading country in the world in terms of ownership of electronic assets. The total number of crypto asset transactions last year in Indonesia was nearly $60 billion, up more than 10 times from a year earlier. 41% of Indonesians aged 18-75 with an income of more than $14,000 per year own cryptocurrency.
“There has long been a perception that Bitcoin acts as a kind of ‘digital gold.’ If the value of Bitcoin, or any other cryptocurrency, increases over time, this will protect purchasing power from falling. decrease in a currency due to devaluation” – Mr. Feroze Medora, Director of Gemini Exchange Asia – Pacific, said.
Looking at the region as a whole, a study by the Singapore FinTech Association shows that funding sources for fintech and startups in the first nine months of 2021 have tripled compared to the whole year. 2020, reaching 1.1 billion USD. In which, crypto companies received 356 million USD in investment, more than 5 times higher than the level of 2020.
Since January of this year, Laos has licensed two companies to trade in digital currency. Previously, Indonesia, Thailand, and Singapore all legalized transactions in cryptocurrencies but did not consider this as a means of payment instead of the local currency.
Cryptocurrencies are emerging as a potential investment channel besides traditional assets
The cryptocurrency boom has also raised concerns about fraud, tax evasion, and high-tech financial crime. Therefore, many Southeast Asian countries have tightened control regulations.
From next May, Indonesia will impose a value-added tax on cryptocurrencies. Cryptocurrency asset transactions and returns on crypto investments will be taxed at 0.1%. While from this April, Thailand also banned digital asset operators from facilitating the use of cryptocurrencies as a means of paying for goods and services. Brunei and Malaysia have both announced similar regulations in recent years.
Mr. Terdsak Taweethiratham, analyst at Asia Plus Securities, said: “The policies of the Central Bank cannot be ignored because this is where it is supposed to regulate the economy, cut risks and maintain the financial stability of the country. But on the other hand, we cannot. ignore the financial technology breakthrough or ignore the use of Blockchain, use Bitcoin.So I hope the regulations can be more flexible and bring fairness to all players in the market. school”.
The cryptocurrency market boom in Southeast Asia reflects the general development trend of the global financial market, demonstrating the region’s rapid adaptation to the technological revolution. However, this is still a new field and it will take a whole process to come up with appropriate regulations and legal frameworks to control and limit risks from cryptocurrencies.
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