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Which countries are promoting the bull run?

5 min read

The USA is currently making life difficult for the crypto industry. Authorities are shooting at crypto-friendly banks and crypto exchanges, issuing harsh threats, demanding hefty fines, and issuing bans. The industry is trembling – and is looking for the distance. In other countries, on the other hand, crypto companies are welcomed with open arms and work is being done on sensible regulation for the future. The next bull run will be forged in these five states.

UAE: With regulation to the goal

The United Arab Emirates (UAE) introduced its first crypto regulation back in 2018. However, it will then take another four years for Web3 companies to establish themselves in innovative cities such as Dubai. In any case, the megacity has been driving blockchain development for several years and even has its own crypto payment system. In addition, the country on the Persian Gulf also wants to expand the mining sector.

Despite the extensive regulation, crypto companies still have problems with regulated access to banks. The reason for this is the country’s complications with the Financial Action Task Force (FATF). This makes access to the international banking system and ultimately the business of the crypto industry more difficult.

However, the UAE is working flat out on this. As part of new regulations, for example, the issue of privacy coins is prohibited. Experts expect an easing of FATF restrictions by the end of the year. This should help the country grow into a new crypto location.

Singapore: population optimistic

The next bull run is also underway in the south of Malaysia. The Singapore government banned crypto advertising last year and refused license applications. As a study by Coinbase shows, citizens’ interest in Bitcoin and Co. has increased significantly. According to this, around 25 percent of the population believe that crypto is the future. Local banks are also noticing this and have expanded their services for private investors in early 2022.

The government is also showing ambitions: within the framework of a research project She examines the tokenization of assets using smart contracts. The implementation of the current regulation is meanwhile a double-edged sword: On the one hand, potential misconduct in the crypto scene should be countered “brutally and relentlessly”. On the other hand, this could prevent innovation. So there is no free pass for crypto service providers in Singapore. However, it doesn’t need that either. The rules are “fair, clear and offer a good mix of business friendliness and customer safety.”

El Salvador: still on the screen?

Hasn’t the experiment in the small country on the Pacific coast long since failed? After all, only 11 percent of the population uses Bitcoin in everyday life. Overall, the balance sheet is rather mixed. However, how one interprets acceptance depends on one’s perspective. After all, the Bitcoin law is only 19 months old. It would therefore be wrong to dismiss the Central American experiment as a failure right now. Getting a society used to a completely new form of money overnight is a Herculean task.

Rather, it is crucial that El Salvador has a so-called first-mover advantage with the Bitcoin Act. The government around President Nayib Bukele is thus setting a precedent: other nations can learn from their mistakes. Liechtenstein, for example, is following suit and is also considering Bitcoin as legal tender. El Salvador, meanwhile, continues to work on regulation for digital assets. The country is thus preparing to issue Bitcoin bonds – a bullish sign for investors.

Confederation of States Europe: MiCA strengthens the industry

With the MiCA regulation passed in April, Europe will be the first major economic zone to have its own crypto regulation. The ordinance brings drastic changes primarily for service providers, who will have to comply with a whole series of new rules from 2025. Crypto providers (so-called Virtual Asset Service Providers, VASP for short) therefore need a license if they want to operate in the EU. However, the permit then applies to the entire economic zone.

Furthermore, the MiCA regulation obliges crypto projects to publish a “white paper” with detailed information on the business operations and the design of the respective coins or tokens. Above all, these measures bring the citizens one thing: consumer protection. The EU should thus become more attractive for both service providers and investors and drive the next bull run.

Hong Kong: glimmer of hope for the crypto market

The Asian financial metropolis is advancing to become the new hotspot for Web3 and blockchain companies thanks to a fundamentally crypto-friendly regulatory policy. After the government issued a policy statement on the development of virtual assets (VA) last fall, numerous start-ups expressed their interest. In March, Hong Kong clarified its strategy in the crypto sector: Web3 is “not hype”, but a “paradigm shift”.

Particularly important for the future role in the bull market: the proximity to China. Hong Kong is the fourth largest financial center in the world and therefore a major capital hub. In addition, the special economic zone is considered the point of contact for the Chinese to withdraw capital from the mainland, which is isolated from the international financial market. So what Hong Kong is enabling with crypto regulation is having a major impact on the second largest economy in the world. Admittedly, the financial center has cracked due to China’s strong influence. Despite this uncertainty, Hong Kong could become the new Web3 hub with the upcoming regulation.

Conclusion: regulation drives bull run

The listed economic zones make it clear what is needed for the successful further development of the crypto industry: regulation. The United States is the opposite. The authorities are still sticking to the existing rules. The SEC, CFTC and IRS use methods that have been in place for 50 years and interpret the regulation “regardless of whether it is valid or not”.

Experts identify the regulation as an indicator for the next bull run. When exactly this will start remains to be seen. Nonetheless, the efforts of many countries are paving the way for investors – the bulls are raring to go.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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