MEET THE CRYPTO INNOVATORS

The United Arab Emirates has been one of the most proactive players on the crypto scene, pouring its efforts into creating a robust, clear and flexible regulatory environment.

"Each Emirate in the UAE is focusing on different market segments," says Gazmararian. "Abu Dhabi is taking on New York and London through establishing digital markets for institutions that are driven by blockchains and tokenisation. Dubai is enabling crypto entrepreneurs and platforms via its flexible licensing regime. Emirates such as Ras Al-Khaimah are looking at how we deal with decentralised autonomous organisations, and how we register them as companies."

Legal clarity, as well as simplified reporting obligations, are highly attractive to crypto-focussed firms. Coupled with favourable tax rates, the UAE’s forward-thinking approach is becoming an engine for considerable investment.

Adoption Rate: 25.3%

Source: Triple A, 2024

While the Vietnamese government has taken a cautiously positive approach to cryptocurrencies, ordinary people have embraced it wholeheartedly.

The country ranked third overall in the Chainalysis 2023 Global Crypto Adoption Index, and second for peer-to-peer crypto exchanges.

Part of the reason for cryptocurrency’s success in emerging economies such as Vietnam lies with the country’s demographics, says Vishal Sacheendran, Head of Regional Markets for Binance.

"You have a young population who are a lot more tech-savvy," he says. "They’re adaptable to new financial technologies."

At the same time, many of these users have been underserved by traditional financial institutions: 61 per cent of Vietnamese people still live in rural areas, according to the World Bank.

"Crypto offers an accessible and efficient alternative to conventional banking," says Sacheendran. "It’s a form of empowerment."

Crypto Users: Almost 21mn

Source: Triple A, 2023

With its long history as a financial centre, Hong Kong already has much of the expertise needed to become a cryptocurrency hub.

Lawmakers have been striding forward with licensing plans and stringent regulation to provide both clarity for businesses and greater trust for consumers.

Rather than attempting to reinvent itself, the jurisdiction is leveraging its existing advantages to gain a stronger footing on the crypto scene, says Gazmararian. Its small size means that it is easier to trace how the new technology will impact the market.

Often, officials are looking at how blockchain technology can improve existing financial structures and assets.

"They’re focusing on tokenising real-world assets and green bonds," says Gazmararian. "There’s already an incredible combination of ingredients that Hong Kong can use to see where this technology can go."

Crypto Transactions (July 2022-June 2023): $65bn USD

Source: Chainalysis, 2023

As India’s wealth and population grow, more households are looking for ways to save and support their income.

While gold has long provided a traditional way for Indian families to protect their assets, crypto is becoming a modern, accessible alternative, with the World Gold Council warning in July 2023 that gold ETFs have lost some flows to digital assets such as bitcoin. Other Indian families have also embraced crypto as a fast and convenient way to send remittances. The unfettered nature of crypto means it’s easy for family members to access on mobile, even in rural areas. All this has led to rapid crypto adoption; the country topped the Chainalysis 2023 Global Crypto Adoption Index.

"Financial inclusion has this very positive impact on individuals globally," says Sacheendran. "Even for people who are not excluded from the system, cryptocurrencies can offer this alternative, away from traditional investment. The possibilities of blockchain technology are so exciting, and that’s enticing in itself; people want to learn and understand and get involved."

Crypto Users: More than 19mn

Source: Coin Switch’s India Portfolio, 2023

Switzerland has adapted investor-friendly tax laws to suit the digital age, categorising cryptocurrencies as an asset class, rather than a security.

"With cryptocurrencies, the goal is financial freedom. But users are not going to be convinced unless they know there’s a framework that governs them. If you want more adoption, regulation will be the key to drive that forward," says Sacheendran.

What many crypto enthusiasts value most is public and state support for cryptocurrency; the canton of Zug, for example, has accepted cryptocurrencies for tax payments since 2021.

Such willingness and flexibility are vital; governments and financial institutions must adapt their mindset and invest in technological know-how if they want to meet digital currencies head-on.

"Changes in technology can be incredibly powerful, but institutions need to make sure they’re on top of it all," says Gazmararian. "The issue – and we see this with AI, crypto and blockchain – is that governments and central banks don’t necessarily have tech-savvy teams in place."

These hurdles are not insurmountable, and there’s a growing willingness among many officials to know more, she says.

"It’s going to be a constantly evolving journey for regulators because the technology is going to constantly evolve. But I think the outlook is really bright."