In the past ten years, blockchain technology and Cryptocurrencies have gone from relative irrelevance to the center of widespread attention. The expansion of this sector has been nothing short of meteoric. Due to the immaturity of the sector, governments all over the globe are still working to develop the most effective regulations for making the most of the technologies of the future.

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China’s Approach to Cryptocurrency

It's generally agreed that China is far ahead of the rest of the pack when it comes to blockchain adoption and innovation. China has submitted the most copyright applications for blockchain technology worldwide, and many of the most prominent names in the blockchain as well as Crypto industries are based in China. Blockchain is additionally a top focus for the government: The 13th Five-Year Plan of the People's Republic of China includes funding for its creation, as decreed by the Chinese State Council. In addition, President Xi Jinping said last year that China aspires to be a global leader in technology, with blockchain, Artificial Intelligence, the IoT, as well as other technologies serving as the primary catalysts.

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The West Approach to Cryptocurrency

After a period of relative freedom, Cryptocurrency rules are starting to become strict in the EU and the US. A proposed set of regulations for the sector was recently released, causing a stir throughout Europe. Speaking specifically about the United States, the country has become a hotbed for the Cryptocurrency industry from the moment the first digital monies appeared there. However, the attitude of authorities toward this new asset class is beginning to change. Two laws aimed at standardizing the oversight of virtual currencies as well as Cryptocurrency exchanges were introduced in November. The SEC has filed charges against the popular Cryptocurrency Ripple. However, turning our attention to Europe, it seems as if the continent's Cryptocurrency industry may soon have the environment it needs to flourish. Additional "Markets in Crypto-Asset Regulations (MiCA)" have been released recently by the European Commission. Uniformity in the regulation and handling of Cryptos is anticipated thanks to MiCA, despite the fact that Cryptocurrency policy in Europe is still Polymerous, confusing, and potentially dangerous. In addition, the committee laid forth its strategy for becoming cashless.

Chinese Blockchain Activities

China is interested in blockchain technology because of its many advantages, including the reduction of transaction fees. The blockchain is an immutable digital ledger that records transactions. Because all users get a duplicate copy of the activities, the bookkeeping may be scrutinized by everyone. It eliminates the need for a third party to broker confidence between suspicious parties, saving both time and money. Transactions involving bitcoins are among the types of data that are stored on the blockchain. The People's Bank of China, the country's central bank, allegedly conducts trials of blockchain-based commerce as well as financial systems in cities like Shenzhen. The CAC published a list of 197 blockchain companies that have registered with them on March 30. This list included subsidiaries of Alibaba, Tencent, as well as Baidu. China also has "blockchain sandboxes," or SEZs set up to let enterprises experiment with and improve the technology. For instance, according to one of the participants, the Hainan sandbox provides startup incubators funded by the government, discounted office space, grants for budding business owners, and official licenses.

Stringent Rules are Scaring Blockchain Projects from the West

It is widely acknowledged that the bitcoin market is a novel one that requires oversight. Meanwhile, several western regulatory authorities are establishing restrictions which makes it challenging for Cryptocurrency enterprises to launch and maintain optimum functionality. In October 2019, for instance, the Financial Conduct Authority in the United Kingdom contemplated prohibiting the selling of Cryptos to ordinary participants. So, what exactly is the issue here? The overwhelming majority of Cryptocurrency participants are either individuals or rather modest companies. France has released new regulations for Cryptocurrency exchanges, which would essentially end the anonymity of the sector. Following the SEC's October 2018 publication of new regulations, Ripple publicly stated its intention to relocate its operations outside of the United States. Ripple backed down from its ultimatum and is now being sued over it's own currency sale.

Singapore and Japan’s Approach to Cryptocurrency

Singapore's openness to innovation has resulted in a number of Crypto startups establishing operations there. From 2016, the government has looked at adopting distributed ledger technology to figure out how to pay off liabilities. To safeguard its citizens against illicit financial transactions, Singapore's government in 2019 enacted the Payment Service Act (PSA). In Singapore, Cryptocurrency is not only recognized by law, but is also considered an intangible asset. Due to its welcoming Crypto policy, the nation has become a global blockchain center. Similar to Singapore, Japan shows some tolerance for digital monies. As of 2018, 23 digital exchange platforms in the nation have been granted regulatory licenses. A new set of bitcoin laws aimed at safeguarding investors, asset custodians, and Cryptocurrency assets were introduced in May of this year.

The Bottomline

Several industry observers feel that Asian nations are set to have an upper hand over the West when it comes to Crypto acceptance and regulation, despite some substantial and opportune change in regulatory approach from countries in the West. But the decentralized strategy taken by the West is supported by many businessmen. The government regulators of the West must find a middle ground between consumer safety as well as limiting business expansion if the region is to thrive.

Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.