Emerging Digital Assets Taxonomy: Although considerable progress has been made in developing a taxonomy for digital assets globally, this field remains highly dynamic. Variations in terminology, differences across jurisdictions, and rapid technological innovations pose challenges for establishing standardized definitions.
Evolving Regulatory Responses: Regulatory responses to digital assets have followed an evolutionary pattern, from applying traditional laws to retrofitting existing frameworks, and now moving toward the development of bespoke regulatory structures. However, the pace and approach of these legal reforms vary significantly by jurisdiction, creating a patchwork of regulations that complicates compliance for businesses operating across borders.
High Compliance Costs: More than 80% of surveyed businesses reported that regulatory compliance accounts for 6-20% of their operational budgets. The most substantial cost drivers are licensing and AML/KYC requirements, which are particularly burdensome for smaller businesses.
Challenges in Cross-Border Transactions: Over half (55%) of businesses encounter occasional challenges with cross-border transactions due to varying regulatory standards, while 25% report frequent difficulties. This lack of alignment complicates operations and inhibits seamless business growth across APAC.
Demand for Harmonization: A recurring theme from respondents was the call for regulatory harmonization across APAC. Harmonized regulations could simplify compliance, reduce costs, and create a more stable environment for digital asset innovation, benefiting particularly startups and SMEs that are driving innovation in this sector.
