Asia is racing to shape the future of crypto. Some nations ban trading, others embrace stablecoins. Hong Kong and Singapore have built clear rules, while Japan has led with the most established laws. India, Korea, and ASEAN pilot crypto use projects. The developments of crypto regulations are likely to define digital assets across the region.
Due to legal frameworks, the region has become a hub for crypto adoption. This overview looks at how major economies are approaching the regulation of cryptocurrencies and stablecoins and what that means for industry participants.
Some nations have chosen to impose strict bans, while others hope to cultivate a thriving digital-asset ecosystem. The reasons vary over concerns about consumer protection and financial stability colliding with ambitions to attract new investment and develop digital finance. In this article, we shall get to know deeper insights into the policies in various jurisdictions.
China’s Strict Approach and Potential Stablecoin Shift
Beijing has largely banned private cryptocurrencies since 2021, outlawing trading and mining over fears of speculation and capital flight. Although the stance remains, the nation has hinted at a slight inclination towards the crypto sector.
In July 2025, a Shanghai regulator urged local officials to study stablecoins and digital currencies more closely, signalling a shift towards changing its policy. Following this, reports surfaced that China’s cabinet was evaluating a plan to allow yuan-backed stablecoins to promote China in cross-border trade, and proposals reportedly include guidelines to mitigate risks. At present, the nation maintains a cautious stance.
Hong Kong’s Stablecoin Licensing Regime
On the other hand, Hong Kong has adopted a very different approach to digital asset adoption. In May 2025, lawmakers passed a bill establishing a licensing regime for fiat-backed stablecoins, which came into force in August. Officials are awaiting the first license, which would be granted in early 2026. Notably, only a limited number of issuers will be approved to maintain market development.
This clear framework has attracted heavyweight applicants. Ant Group’s overseas arm plans to apply for a license once the process opens. Standard Chartered, meanwhile, formed a joint venture with Animoca Brands and telecom firm HKT to issue stablecoins in Hong Kong. By offering regulatory certainty and signalling openness to innovation, Hong Kong aims to become a leading venue for digital-asset trading and issuance.
Related: Hong Kong to Cut Capital Rules for Banks Holding Crypto
Singapore’s Balanced Regulatory Approach
Known for its methodical approach to finance, Singapore amended its Financial Services and Markets Act (FSMA) to require any firm offering digital token services to overseas clients in Singapore to secure a licence. Those that continue to operate without approval risk fines or imprisonment. Meanwhile, the Monetary Authority of Singapore (MAS) has set standards for stablecoins, including reserve requirements, redemption rights, and disclosure obligations.
These measures are designed to encourage good actors and deter risky behaviour. Because MAS clearly outlines what is allowed and what is not, Singapore has become a preferred base for exchanges, custodians, and token issuers willing to comply with the rules. By providing a predictable environment, authorities hope to capture the benefits of digital-finance innovation without courting systemic risks.
Japan’s Stablecoin Leadership
Japan has established itself as a pioneer in the digital-asset space. In 2023, legislation labelled stablecoins as “assets valued in currency,” a designation that underscores their legitimacy, thus making Japan a hub for crypto use. Moreover, only licensed banks, trust companies, or money-transfer businesses can circulate fiat-backed tokens.
In addition, this structure has garnered attention, following which regulators have proposed to approve the country’s first yen-pegged stablecoin later this year. The token, known as JPYC, will be issued after the issuer registers as a money-transfer business and will be fully backed by yen deposits and government bonds. Japan’s approach underscores the potential for financial innovation within a robust legal framework.
South Korea’s Evolving Crypto Law
The country already enforces one of Asia’s robust crypto laws, which is the Virtual Asset User Protection Act, for strict licensing and reporting requirements last year. Lawmakers in South Korea are now considering a Digital Asset Basic Act, which would allow local companies to issue Korean-won stablecoins.
Central bankers, however, have expressed concerns, stating that privately issued stablecoins could complicate capital controls and destabilise monetary policy. Market interest remains high nonetheless. The volume of U.S. dollar-pegged stablecoins traded on Korean exchanges reached an estimated 57 trillion won (about US$41 billion) in the first quarter of 2025. The fintech firm Toss has announced plans to launch a won-denominated stablecoin once regulations permit it. Policymakers will need to balance competing pressures as they draft the new law.
Indonesia and Thailand: Tax and Tourism Initiatives
Indonesia permits the trading of crypto assets but restricts their use as a means of payment. In July 2025, the finance ministry raised transaction taxes on crypto. Sellers on domestic exchanges now pay a 0.21 percent tax, while those trading via overseas platforms pay 1 percent. Buyers no longer pay value-added tax, but mining operations face a VAT of 2.2 percent. Crypto mining income will also be taxed under standard income-tax rules, signalling a shift toward treating digital assets as financial instruments.
Meanwhile, Thailand launched an 18-month pilot programme in August 2025, allowing tourists to convert crypto into baht for local spending. Conversions are capped to limit money-laundering risks, and transactions must go through Thai-based exchanges. The government hopes the initiative will boost tourism revenue at a time when international arrivals remain below pre-pandemic levels.
India’s Partial Oversight and Tax Policies
Coming to India, the nation’s stance on crypto is intentionally restrained. A government document released in September 2025 outlined concerns, stating that full regulation would confer legitimacy on cryptocurrencies, possibly creating systemic risks. As a result, India has opted for partial oversight, wherein exchanges must register with an agency, but there is no broad regulatory regime.
The Reserve Bank of India continues to caution against private cryptocurrencies, while the tax policy raises flags over speculative trading. Transactions incur steep taxes, and gains from digital assets are taxed at 30%, with an additional 1% deducted at source. Officials also warn that the spread of stablecoins could undermine the country’s digital payments infrastructure. For now, this approach has kept the market small relative to India’s population and economy.
Related: American Bitcoin Eyes Asia: Strategic Expansion or Political Power Play?
Stablecoin Regulation: A Regional Priority
Stablecoins, digital tokens pegged to traditional currencies, have become the focal point of many regulatory efforts. Hong Kong’s new framework requires issuers to back tokens with high-quality reserves and offer clear redemption terms. Singapore’s MAS imposes similar standards, while Japan restricts issuance to licensed banks and trust firms. Even China is contemplating a yuan-denominated stablecoin to promote its currency abroad. These measures echo the principles of the U.S. GENIUS Act, which sets federal rules for dollar-backed stablecoins.
On the contrary, South Korea is still debating the classification and supervision of stablecoins, while other jurisdictions remain silent. The differences reflect diverse economic priorities and levels of preparedness. Nonetheless, stablecoins’ potential to facilitate cross-border payments and reduce transaction costs means they will remain central to regulatory discussions.
Challenges and Outlook
Asia’s fragmented regulatory landscape poses practical challenges. Companies operating across the region must follow the laws, tax rules, and licensing requirements. Policy differences can also fuel regulatory arbitrage, with firms relocating to jurisdictions they perceive as more favourable.
In the face of evolving markets, governments are trying to balance innovation and consumer needs. Clear licensing and reserve requirements help limit unstable projects, while tax policies can discourage speculative or risky behaviour. Enforcement is also tightening, with regulators increasing scrutiny of unlicensed exchanges and scams. Countries with unclear rules may struggle to keep pace, while jurisdictions that move too slowly risk losing industry activity to more welcoming neighbours.
Future Outlook
Looking ahead, Asia is likely to continue leading the global conversation about digital-asset regulation. While Hong Kong and Singapore show that robust legal frameworks can coexist with vibrant innovation, Japan demonstrates that clear rules encourage investment and development.
Meanwhile, South Korea faces essential choices over its coordination with global standards. Even China, which has long been resistant to crypto, has hinted at a potential shift to crypto through controlled pilot programmes and stablecoins. As policies evolve, cooperation among regulators will prevent market fragmentation and ensure that digital finance fulfills its potential for efficiency and financial inclusion.
Asia’s approach to crypto remains diverse, from strict bans to open stablecoin regimes. This approach brings both limits and opportunities to crypto investors. According to the governments, defined rules aiming to balance innovation and safety will decide which nations emerge as leaders in the global digital asset race.
