Comparative Analysis of Global Encryption Regulatory Attitudes and Styles

Cryptocurrency has transitioned from niche to mainstream, with global holders surpassing 200 million, and the number of users in China reaching 19 million. Governments around the world are forced to face regulatory issues, but currently, there is no consensus on cryptocurrency globally, and the attitudes of different countries vary.

This article will delve into the regulatory evolution and current attitudes of five major countries and regions in the field of encryption.

United States: Balancing Risk and Innovation

The United States has the highest level of attention in the encryption field, but regulatory policies are relatively vague. Before 2017, the U.S. mainly focused on overall risk control. In 2017, the SEC first brought ICOs under the jurisdiction of federal securities laws. After 2019, the U.S. took stronger measures against cryptocurrencies.

In 2021, after Gary Gensler became the chairman of the SEC, the United States' attitude towards encryption shifted. Allowing a trading platform to list on Nasdaq marked the beginning of the U.S. actively researching encryption regulation. In September 2022, the U.S. released the first draft of a regulatory framework for the encryption industry, but related laws have yet to be passed.

Currently, cryptocurrency regulation in the United States is jointly overseen by federal and state authorities, with the SEC and CFTC leading the regulation at the federal level. States have varying attitudes towards cryptocurrency, with some supporting it and others prohibiting it. The U.S. government is considering establishing a unified regulatory framework to eliminate interstate differences.

The President of the United States once signed an executive order emphasizing a unified regulatory approach that supports innovation while addressing risks. The U.S. places more emphasis on encryption technology innovation rather than regulatory leadership. This ambiguous policy increases market uncertainty but also leaves room for innovation.

Japan: Stable Regulation, Lack of Attractiveness

Since the early development of cryptocurrencies in Japan, the country has actively created a sound regulatory environment for the industry. After the collapse of a certain exchange in 2014, Japan began to implement stricter regulations. Starting in 2016, Japan actively legislated, adding a "virtual currency" chapter to the "Fund Settlement Act" and establishing regulatory details.

In 2017, Japan amended the Payment Services Act to bring encryption exchanges under regulation, becoming the first country to legalize Bitcoin. After a hack at an exchange in 2018, Japan further strengthened its regulations. In June 2022, Japan passed the amendment to the Fund Settlement Act, becoming the world's first country to create a legal framework for stablecoins.

Japan's regulatory environment is完善, allowing many encryption companies to develop stably. Japan's regulations are clear and strict, focusing on industry guidance rather than prohibition, dedicated to protecting retail investors, and continuously improving relevant legislation.

South Korea: Stricter Regulation, Legalization Expected

South Korea is one of the most active countries in the cryptocurrency market, with 20% of young people participating in trading. Since 2017, South Korea has banned various token issuances and introduced a series of regulations to protect investors. In February 2021, South Korea began considering legislation on encryption.

After the collapse of Terra in 2022, South Korea accelerated its legislative process. The government established the "Digital Asset Committee" and the "Virtual Asset Risk Committee", proposed policy recommendations, and strengthened regulation. The new president has a friendly attitude towards encryption, promising to ease regulations, and the market is moving towards legalization.

Singapore: Predictable but not accommodative

Singapore has always maintained a friendly and open attitude towards encryption. In 2014, Singapore took the lead in regulating virtual currencies. In 2019, the Payment Services Act was enacted to legislate for regulation for the first time. Singapore's regulatory environment is relatively relaxed, attracting numerous encryption companies.

In 2022, Singapore continued to improve its regulatory environment, balancing openness with financial market stability. At the same time, it began to focus on the protection of retail investors, restricting their participation. In 2023, Singapore provided tax incentives for individuals involved in digital assets, maintaining its encryption-friendly image.

Singapore's policy is stable and predictable, but to control financial risks, it is gradually tightening regulatory policies.

Hong Kong: Actively Catching Up, Accelerating Legislation

Hong Kong's attitude towards encryption has shifted from opposition to active embrace. In November 2018, Hong Kong first included virtual assets under regulation. In October 2022, Hong Kong officially released a declaration on the development of virtual assets, beginning to actively embrace encryption assets.

In 2023, Hong Kong accelerated the legislative process. In January, it planned to bring stablecoins under regulation, and in April, it released a consultation summary on the discussion paper regarding encryption assets and stablecoins. Hong Kong is expected to regain its leading position in the encryption field by seizing the development opportunities of Web3.

Conclusion

Strengthening cryptocurrency regulation is a global trend. Regulatory legislation issues are receiving increasing attention, indicating that the industry is developing positively. Reasonable regulation contributes to the long-term healthy development of the industry, and countries are exploring regulatory paths suitable for themselves.