Crypto Projects Turn to Asia for Growth Opportunities Amid Regulatory Scrutiny in the U.S.

Crypto projects and investors are turning to Asia in search of growth opportunities amid increasing regulatory scrutiny in the United States.

Over the past year, there has been a notable increase in the expansion of U.S.-based crypto projects into the Asia-Pacific (APAC) region, driven by favorable policies and the growing adoption of cryptocurrencies, Kevin Goldstein, senior advisor to crypto investment firm HashKey Capital, told TechCrunch.

Asia has become an attractive destination for crypto ventures due to several factors.

The recent legalization of retail crypto trading in Hong Kong has enticed Web3 startups to establish a presence there, which hope to tap into the vast investor base in mainland China where crypto is banned. 

Singapore’s clear guidelines on stablecoin regulation have also been well-received, drawing interest from companies such as Circle, the issuer of the popular stablecoin USDC.

The significance of Asia as a growth market for crypto projects was evident at Token2049, a prominent crypto conference held in Singapore in September. 

This year’s event saw the largest gathering of U.S. crypto venture capitalists ever witnessed at an Asian conference, highlighting the shifting focus from the U.S. to Asia. 

Positive developments surrounding stablecoins, XRP, and the potential for ETFs in Asia have contributed to this change in perception.

The allure of Asia lies in the opportunities it presents for entrepreneurs and companies. 

By establishing operations in Asia, they can benefit from a supportive regulatory environment and tap into a market that offers greater freedom and fewer legal repercussions compared to the U.S. 

This has led to an influx of talent and investment from U.S.-based crypto players such as Coinbase, Galaxy, Gemini, Paxos, and CMT Digital, who have either planned or initiated hiring in Asia.

“Things have changed quite a bit since FTX where there’s been a little bit more scrutiny around regulations in the U.S., while there have been some positive developments [in Asia] around stablecoins, XRP, or ETF possibilities,” Paul Veradittakit, a managing partner at crypto venture capital firm Pantera, said.

“While FTX hit everybody, I think people in Asia are able to more easily forget that and really see the possibilities of being able to start a company here, being able to get a banking license and actually do things in a way where they don’t fear going to jail.”

Each Asia Country Presents Unique Benefits

It is worth noting that each Asian country presents unique opportunities for digital asset firms.  

For example, South Korean companies have successfully integrated tokenomics into the fan economy, while Japan offers a wealth of TV and gaming intellectual property that is ripe for NFT adoption. 

Vietnam has gained recognition for its development of blockchain games following the success of Axie Infinity.

Singapore and Hong Kong, as prominent financial hubs, have taken the lead in regulating institutional crypto finance.

When venturing into the Asian market, having local investors or partners with expertise in go-to-market strategies becomes crucial. 

The language barriers and different social media platforms prevalent in the region necessitate a localized approach to reach Asian communities effectively.