Hashbon Space: Crypto Grand Tour. Part 4 — Southeastern Asia
Xin chào Hashtronauts!
We welcome you aboard our crypto world travel with the “Hashbon Space Edition” column. Last week we took a long flight to Oceania. There were many interesting facts about their crypto world, let’s glance through the summary. There are 14 independent countries in Oceania that include some geographic regions: Australasia, Melanesia, Micronesia and Polynesia. Australia takes nineteenth place, where 11.1% of their Internet users own crypto. New Zealand stays on the thirtieth place with an 8.8% crypto user-base. The region’s most advanced crypto country is Australia, where there is the payment system TravelByBit, 1200 newsstands where you can buy cryptocurrency and Brisbane airport which accept digital money. We can see the similar development in New Zealand, but crypto regulation here is more blurry. In other countries the status of cryptocurrencies is not determined, only in Vanuatu cryptocurrency is prohibited.
Please set your seats back to their upright and locked position and fasten your seatbelts. Yours captain Wise Raccoon welcomes you on board. Our trip today will take 10 minutes. During this time, please switch off your mobile phones. Today we are going to discover Southeastern Asia. Have a pleasant flight!
To make it easier to navigate across our Crypto Grand Tour, we devote each Hashbon Space Edition to a group of countries which are united by some geographical features or have a single legal regulation.
Southeastern Asia — crypto regulation in general
In contemporary definition, Southeast Asia comprises two cultural regions:
- Mainland Southeast Asia, also known as the Indochinese Peninsula, comprising Cambodia, Laos, Myanmar, Peninsular Malaysia, Thailand, and Vietnam.
- Maritime Southeast Asia, mostly comprising the Malay Archipelago, Brunei, East Malaysia, East Timor, Indonesia, the Philippines, and Singapore.
According to Hootsuite’s 2022 Global Digital Yearbook, on average, 37.8% of Internet users around the world own one cryptocurrency or another. Many countries from Southeastern Asia were mentioned in this statistic. The first country is Thailand, which takes the first place, where 20.1% of their Internet users own crypto. Next up is third place with the Philippines having a 19.4% crypto user-base. Indonesia’s in seventh place with 18.5%, Singapore in ninth place with 15.6%, while Malaysia & Vietnam are home to 13.2% & 11.2% respectively.
Crypto activity has been quite common in Southeastern Asia for several years. Despite this, such transactions were unregulated until 2017. In 2018, the Securities and Exchange Commission (SEC) of Thailand announced key rules governing the crypto industry. The move prompted other leading regulators in the region, such as Indonesia and Singapore, to also plan rules on crypto transactions throughout 2019.
With the increasing digitalization of trade and commerce in Southeastern Asia, the number of online financial scams is on the rise. A report by ADVANCE.AI, an artificial intelligence company headquartered in Singapore, found that every third person in Southeastern Asia have experienced online scams. The report states that the current boom in e-commerce has led to an increase in online fraud cases and that online fraud will become a major business risk for organizations in Southeastern Asia in the coming years.
The economy of Southeastern Asia is one of the fastest growing in the world and is predicted to become the fourth largest regional economy by 2030. Southeastern Asia’s e-commerce market revenue is expected to be $67.6 billion in 2021, representing a 10.3% annual growth.
Governments in Southeastern Asia continue to disagree on how to regulate cryptocurrencies, even as digital assets rise in popularity. So let’s look at each country in Southeastern Asia under a magnifying glass.
Brunei, Laos and Myanmar
Brunei, Laos, and Myanmar prohibited the use of cryptocurrencies. Central banks of these three countries — Autoriti Monetari Brunei Darussalam (AMBD), the Bank of Lao PDR and the Central Bank of Myanmar — consider cryptocurrency transactions illegal.
Thailand is the only country in mainland Southeast Asia that has cryptocurrency regulation. The Securities and Exchange Commission (SEC) oversees cryptocurrency-related activities that are regulated by the Emergency Decree on Digital Asset Business of 2018 (“ICO Order’’). It regulates the offering and sale of “digital assets’’, including cryptocurrencies and digital tokens.
According to this cryptocurrency regulation law, cryptocurrency companies are classified into four types: exchanges, brokerage firms, dealers, and ICO portal operators. Exchanges, brokers, and dealers must obtain a license from the Ministry of Finance, and ICO portals must be approved by the SEC.
The Finance Ministry has authorized operating licenses for four digital asset businesses: Bitcoin Co, Bitkub Online Co Ltd and Satang Corporation Co Ltd, while Coins TH Co Ltd has been approved as a licensed broker and dealer of cryptocurrencies, according to a statement by the Securities and Exchange Commission (SEC).
Seven cryptocurrencies were also legalized — bitcoin, ethereum, bitcoin cash, ethereum classic, litecoin, ripple and stellar — without explaining why these particular coins received legal status.
On August 21, 2017, the Prime Minister issued Decree №1255 directing the Ministry of Justice, the State Bank, the Ministry of Finance and the Ministry of Public Security to prepare reports clarifying the legal status of “virtual assets” and “virtual currencies” and recommend changes or issuance of relevant legislation.
The Vietnamese government is still considering a legal framework for cryptocurrency transactions that would allow authorities to manage electronic transactions and legally protect citizens. Currently, Vietnam does not classify cryptocurrencies as a legal payment method, “goods and services”, or “property and assets”.
Cambodia does not have a clear regulatory framework for cryptocurrencies and crypto-related activities. On May 11, 2018, the National Bank of Cambodia (NBC) and the Cambodian Securities and Exchange Commission (SECC) issued a joint statement on cryptocurrencies. Any person or legal entity that propagates to mobilize funds, buys, sells, trades or settles Crypto Currencies without obtaining a license from competent authorities shall be penalized under applicable laws.
Cambodia announced the launch of its own digital currency, Bakong, in November 2020. Although Bakong is not a cryptocurrency, Bakong supports transactions in riels and US dollars, and the Cambodian government hopes to use it to increase access to financial services, especially among the country’s unbanked population.
The Malaysian government is still undecided on exactly how to legalize and regulate cryptocurrencies. The Malaysian Securities Commission (SC) regulates digital currency platforms operating in the country, dictating the rules for Initial Exchange Offerings (IEOs) and Digital Asset Custodians (DACs). All IEO platforms operating in Malaysia must register with the SC.
In the Philippines, Bangko Sentral ng Pilipinas (BSP) issued the Virtual Currency Exchange Guidelines in 2017, requiring all virtual currency exchangers to meet the same reporting and security requirements as currency exchange offices or foreign exchange dealers. Virtual currency exchangers are also required to work with the country’s Money Laundering Board. In January 2021, BSP expanded cryptocurrency regulations in the country in accordance with the recommendations of the Intergovernmental Financial Action Task Force (FATF). Cryptocurrency mining is very popular in the Philippines and cloud mining is operated as one business in the country. The SEC has enforced securities regulations on the cloud mining operations considering these types of activities as ‘Securities’.
In 2014, the Inland Revenue Authority of Singapore (IRAS) defined bitcoin as a good or service for tax purposes, and this is the only legal definition of cryptocurrencies in the country. Crypto assets are not a legal payment instrument, but any company can operate legally after registering with the Monetary Authority of Singapore (MAS). The National Bank still treats bitcoin and other assets as commodities, not money. After 2017, they regulated cryptocurrencies not as money, but as digital payment tokens (DPTs), which were classified as “securities”. On January 17, 2022, MAS released a new set of guidelines for DPTs providers. New rules prohibit them from advertising their services in public places such as public transportation, public websites, social media platforms, and broadcast and print media.
Good job! We’ve landed at Hashbon Airport. In just 10 minutes we visited 9 countries, which sounds like time-travel. Hope you will not forget your body of knowledge that we’ve filled today. Thank you for the educational flight.