Unchained - How Asia's Crypto Communities View the Tariffs and Trump's Embrace of Crypto

Episode Date: April 22, 2025

The U.S. is rattled by tariffs, economic uncertainty, and political U-turns on crypto. But across Asia, the response has been … different. In this episode of Unchained, we check in with two of the sharpest observers of Asia’s crypto landscape: Emily Parker, China and Japan advisor of the Global Blockchain Business Council, and Yat Siu, chairman of Animoca Brands. They unpack how Asia views the Trump crypto pivot, what’s actually happening inside China, why Hong Kong may be the most important jurisdiction in crypto right now, and how Japan and Korea are quietly shaping the future of regulation, stablecoins, and DeFi. Plus: Is crypto really banned in China? Why Korea is lifting its “shadow ban” Why crypto gaming is thriving in Asia And what the West can learn from it all Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Bitwise Guests: Emily Parker, China and Japan Advisor at the Global Blockchain Business Council Yat Siu, Chairman of Animoca Brands Links WSJ: Crypto Is Illegal in China. Binance Does $90 Billion of Business There Anyway. Timestamps:  🌏 0:00 Introduction 😌 5:43 Why Chinese sentiment around tariffs is calmer than in the U.S. 🗣️ 8:24 What crypto conversations are really about in China right now 🔁 11:28 How Asia reacted to the U.S. crypto U-turn under Trump 🏦 20:13 Are Asian nations quietly building up bitcoin reserves? 📜 23:19 How Asia has more regulatory clarity than the U.S. 📈 25:13 Why crypto adoption in Asia is outpacing that of other regions  🇰🇷 30:22 Why DeFi hasn’t taken off yet in South Korea – Don’t miss this! 🌐 38:05 The potential rise of non-USD stablecoins in Asia 👀 43:52 Is crypto actually banned in China?  💴 55:51 Whether the digital yuan is being adopted 🔓 1:00:28 Korea potentially lifting its “shadow ban” on institutional crypto investment? 📊 1:05:15 Why some Asian companies choose to IPO in the U.S. and whether more are coming 🎮 1:10:21 What’s really happening with Web3 gaming in Asia right now Learn more about your ad choices. Visit megaphone.fm/adchoices

Crypto isn't actually really banned in China. Like, that's not really true. Like, that's just kind of like a media trope that people say. But, like, you know, like if China actually really wanted to ban crypto, like it would. Like, you know, China's pretty good at banning things when it wants to do it. There are, it's not that hard to trade crypto in China. So the question is, like, why is this happening? Hi, everyone.

Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Every episode, we feature comments from listeners. Today we have two comments responding to my recent interview with Bass's Jesse Pollack. On Farcaster, B-926 says, quote, the intention of Bass's content coin was to empower creators, but it ended up being traded like a meme coin. So what went wrong? The intention isn't bad, but the timing is off.

It launched into a market where trust is low, attention spans are shorter than ever, everything gets beam coined. If it were launched at a different time or in a different context, it might have been seen as an experiment. Instead, the launch felt like someone showing up to a pull point. party in a suit. Awkward. On X, ECJ writes, look at his smile, bro, just made a ton of money and absolutely loves the chaos. What your comment featured? Write a review of the podcast of Rawl or leave a comment on our video on YouTube, X, or Farcaster. This is the April 22nd, 2025 episode of Unchained. Need to keep up with Macro? We have you covered. Every Monday at 430 p.m.

E. Our Macro and Crypto Show, Bits and Bips, is now streaming live on X and YouTube. Don't miss it. Crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. Today's topic is what's going on in Asia, one of the areas of the broadest crypto adoption, especially in light of Trump's tariffs. Here to discuss are Emily Parker, China and Japan Advisor at the Global Blockchain Business Council, and Yat Sioux, Chairman of Anamoka Brands. Welcome, Emily and Yat. Hi, great to be here. Thank you for having me.

Let's have each of you give a brief description of your background, you know, in terms of your involvement with crypto and Asia. Emily, do you want to start? Sure. So I've been involved with Asia for most of my life. I think we did an Asia show once before Laura, and just talked about that. But I started Chinese. Years ago. Many years ago, many years ago. It's still a hot topic.

So I started studying Chinese in high school. I've been involved with China pretty much ever since, moved to Japan right after college. And basically my whole career has sort of been the U.S.-China-Japan triangle, which it's still very much is. And then with crypto, I kind of came to crypto through the China angle. I'd been doing a lot of work on China and the Internet and looking at China's government attempts to control the internet. And so when crypto was blowing up in China in 2017 and China was trying to crack down on it, I was kind of like, okay, I've seen this movie before. I'm going to go over there

and see what's going on. And then I ended up co-founding a crypto startup in Asia that had very much a focus on the entire region called Longhash. And now I still spend a lot of time in Hong Kong, China, Japan, US. So still kind of following the market very carefully. And yet? Yeah. So I guess my background is a little bit different in the sense that I started in the tech space really in Europe. I grew up in Austria. I actually have a music background, so nothing related to crypto whatsoever. This is why Yad is definitely like one of the more interesting people in crypto. By the way, his background is so different. Yeah, by the way, Yad, I also heard you say you grew up in Vienna and I love Vienna. One of my very closest friends lives there. So Vienna is a beautiful place, right? And so I actually studied music. So I went to the Music Conservatory. So that was my, original background ages ago.

And maybe another interesting thing is that I grew up at a time when it was still in East and West sort of Europe. And so that's a different story. But anyway, so that kind of shaped me a little bit. Worked for Atari, went into gaming quite early on. Fast forward. Ended up in Hong Kong, started one of Hong Kong's very first

internet service providers back in the early 90s called Hong Kong Online, which kind of catapulted me really sort of in the internet space, eventually did a cloud computing business that was acquired by IBM, and basically with Animoca Brands, we were really a gaming company, and in our involvement through a studio in Vancouver with CryptoKitties got into the entire blockchain space that way. So we came in really from the culture gaming angle, not so much from the Bitcoin angle.

So that probably makes us a little bit different from the classic crypto-OGs. And since then, Annamoka Brands is really a prolific investor. We are a global business, but of course I'm based in Hong Kong. A lot of our operations and teams are here. I advise the government in the Web 3 Advisory Council in Hong Kong on things Web 3. And we're also very involved in the Middle East. We also advise Niyom and I guess by definition the Saudis on their blockchain strategies. And we do a lot of policy work.

We help write the papers and stable coins and so forth. And today, Animal Blands is known as an investor. We have over 540 portfolios in Web 3. And a lot of people think we're very focused on gaming and metering. we are, but that might comprise maybe a third of our business. Most of the other activities that we do are very much on the sort of advisory financial services and, of course, investing business. All right. So the reason that we wanted to do this show is actually we started by trying to get Emily on bits and bits to talk about the reaction to Trump's tariffs in Asia.

but because she's actually physically in Asia was not going to work out timing-wise or time zone-wise. But I did want to ask, you know, ever since Trump announced these tariffs, you know, many of the tariffs are especially high on Asian countries, in particular China. And I wonder just like generally what the reaction's been

and whether or not the tariffs are changing the perceptions of people in Asia about crypto. Sure. I can start real quick with that. So, of course, it's always dangerous to sort of say anything about what all Asians are saying or what all Japanese or all Chinese. I mean, it's really impossible to generalize. So I can only give kind of my impression. You know, here in Tokyo, the tariffs are on TV all the time. I mean, it's definitely a topic. It's of interest. Obviously, it's a huge discussion topic in China as well. It's Korea. I mean, these are the tariffs are being talked about. These are these are, these is a main topic as it is the United States. I mean, again, talking about China, this is just sort of my anecdotal impression, but I don't get.

the feeling that Chinese people are really panicking about these tariffs. That's just not the vibe that I get. I get that there's kind of a lot of confidence there that, you know, China sort of saw these coming for a while. They're pretty prepared. That's generally the impression. I'm sort of feeling more panic coming from the United States, again, purely anecdotally. As for crypto, I have, I mean, Laura, you raised this question. It's a great question about how it affects the crypto market in Asia specifically. I've asked a bunch of people that most people responded that it's just part of the larger global conversation. So, you know, people are asking the same questions that they're asking in the United States, which is basically like, will Bitcoin be a hedge against this, right?

This is the question, you know, what will, what will it mean if, you know, there's a weakening dollar? What will that mean for Bitcoin? These are pretty similar questions to what were the conversation that's being had globally. So I'm not sure maybe yet has a different take, but I haven't heard that much of a specific Asia angle for the tariffs. Obviously, there are certain things like mining, you know, we sort of talked about this a little bit this morning. That could impact the mining. industry. Interestingly enough, you know, there's talk of trying to bring the mining industry back to the United States, but there's a lot of reliance on parts from Asia. And obviously, like, tariffs could impact that. So there could have all these different effects, but, you know, the tariff story keeps changing.

And we don't know exactly what's going to happen or what the end tariffs are going to look like or what the economic impact is going to be. So again, I think there's a lot of speculation and a lot of unknowns. But yeah, I think it's just largely reflective of a global conversation. Yeah, maybe just to add a little bit on Emily's note there, broadly speaking on the macro side, it's viewed very much for the time being crypto as a risk-on asset. So if you're going to de-risk broadly, you're also de-risking on crypto. Bitcoin might be a little bit the exception, but definitely altcoins are sort of not in favor. Generally speaking, when you think about the entire macro space because there's a lot of uncertainty.

So that's kind of just the sentiment. That said on tariffs, the conversation is around, you know, is crypto-good heads, is it an alternative? And there's a lot of conversation also, especially around, you know, future stable coins and so on around, is that another way in which you can sort of, you know, circumvent tariffs or deal with them a different way? So that conversation is definitely happening. I would also say sentiment-wise anyway, you know, Hong Kong is a major, I wouldn't say it's a manufacturing hub, but the owners of the manufacturers tend to live in Hong Kong, right? So Hong Kong can be viewed a little bit as, you know, I sort of the, I guess, if I have to give an American example,

It's a little bit like what Miami is to South America. Hong Kong is to, I guess, the Chinese in the region. People live there from the region. They go to a local school here. They might work in China, but their family lives in Hong Kong because they're in local schools. And it's based on sort of a British common law, for instance. There's certain types of securities that they have there that they feel safer than,

say, in China, for instance. So there's a whole bunch of things that they prefer to sort of live in Hong Kong. So you have a very large Chinese community here. and so there are many of the business owners, so they are definitely impacted, and there's talk about tariffs as a sort of macro, like, you know, where do I move my manufacturing, how do I deal with business? I am aware, though, of a number of very large businesses, particularly in textiles, that have, for instance, de-emphasized the U.S. years ago. To your point, Emily, you know, many Chinese companies have prepared for that moment. So the ones that are essentially sort of dependent on, let's call it, the Walmart drug, that kind of in a difficult situation, but the ones that have already sort of diversified

themselves over the last several years because they kind of saw the writing on the wall are sort of in a much, much better place. So you do have that. Inside China, at least a commentary, and I think we kind of see this a little bit online, it's a little bit of sort of, you know, poking fun and a little bit of like what the hell's going on and that doesn't make sense. And, you know, America's lost the plot. whether it's right or wrong, it's not kind of my point.

It's just the perspective in China isn't like, oh, my goodness, we're shaking in our boots. It's much more like, this is a joke and we're not going to take this seriously anymore. So it's a little bit of that on the more national level. Obviously, businesses are concerned. And then I think the final point I would say is that quite a few companies in Hong Kong and in Japan, of course, and Singapore have started adding Bitcoin as a play. So they're basically started adding Bitcoin on their balance sheet. and the way that they're positioning it is as a macro hedge.

And so the conversation is beginning. And, you know, some of them are very speculative. But the point is that it's becoming more of a broad conversation overall. So I just wanted to also zoom out because, you know, we started this with the most recent news, which is about the tariffs. But obviously before then, we did see that the U.S. did a 180 on crypto with the fact that the Trump administration has really embraced it. And I wondered what the perception was in the Asian crypto. seen about this change and stance from the U.S.? This is a really interesting question.

I think about this a lot. I think that a lot of these jurisdictions, Hong Kong, Japan, they do watch what's happening in the U.S. pretty carefully. And there's a lot, and not just the U.S., the U.S., in Europe. There's a lot of looking at Mika, you know, in terms of what they're doing with stable coins. So people are definitely paying a lot of attention to what's going on in the United States. Now, again, this is an area where it's sort of hard to, like, pinpoint specific data to say,

like, okay, because this happened in the U.S., this had this specific impact on Asia. But there's definitely been some vibe changes in Asia that I think you could maybe attribute to some of the changes in the United States. Like, if you look at Japan, for example, so there's some very interesting things happening in Japan right now. And we can get to this in more detail a little bit later. But one of the biggest obstacles to crypto adoption in Japan is taxes. This has been the case for a very long time.

Taxes for crypto can go as high as 55% in Japan. And this has been the case for a while. For the first time, there's actually starting to be some very serious discussion about changing it and bringing it down closer to 20%, which is kind of what's used for stocks. And when you talk to people, and again, you can't really like nail this down, but there is some sense that like the changing wins in the U.S. might be sort of having an impact on the conversation here in particular because lowering the tax rate is one way to pave the way for an eventual Bitcoin ETF in Japan. So that again was something that even when I was here, like, I don't know, less than a year ago and was talking about a Bitcoin ETF with people who were in a position to really be influential on that, I kind of had the feeling that there was no chance that it was going to happen. And that's not the case now. I mean, it will take a while. I mean, we're looking for something like maybe two years out, if even that. But there's serious discussion about that. And I do think that that's something that maybe was influenced by the sort of, you know, so-called crypto-friendlyness in the United States. China also, again, this is all sort of in the sort of methodology. It's a little bit of a But yeah, I don't know if you've heard this as well. But I've definitely heard various people say to me that sort of, you know, since Trump was making these statements about how like, you know, we can't let China win in crypto, which is a sort of weird thing to say because China's not exactly friendly to crypto. But since he's been saying that, that actually caused China to look at crypto more seriously. I've heard that from actually a few different people. I don't know if that's true. I don't have any evidence of that, but it's interesting. And then another interesting example is Korea. So Despread, which is like they're a great organization in Korea. They do a lot of research and data. I I was asking them about this, and they noticed a very noticeable surge in, like, crypto investors and just like basically a huge surge in market sentiment between October and November of last year,

basically from the election. Now, again, can you say like 100% this is because of the election? But it did correlate. Basically, when Trump was elected, we just sort, we kind of saw the immediate impact on Korean market sentiment. And they attribute that to Trump winning the election and this idea that we were sort of, you know, entering a crypto-friendly era in the United States. So there's definitely an anecdotal evidence abounds. Yeah.

Just a supplement, definitely from a Chinese perspective, there was widespread jubilation in the crypto communities, particularly the Chinese crypto communities were like, oh, drums winning, all our bags are going to go up, you know, all that kind of stuff, right? Yeah, somewhat to be expected. And just understand when you say Chinese, because, like, technically crypto is banned in China. So how are you defining that? Yeah, so quick distinction here. First of all, trading of Bitcoin.

would be not allowed, but owning of Bitcoin in China is actually not illegal. And trading of crypto is happening all the time. I mean, and to be clear, I think China is very well aware that especially during sort of both the changes or the addition of Article 23 in Hong Kong and the sort of COVID sort of crisis that Hong Kong had, a lot of that Chinese capital that was involved in some form of fashion crypto moved to Singapore. And that's actually one of the drivers I think where Hong Kong also decided to be much more pro-crypto with, of course, the blessing of China.

Like, nothing happens on those type of policies front without the approval of China. And, you know, it's also important to remember that, you know, Xi Jinping, in his address, did say, you know, blockchain and Web 3 is strategically important. He didn't mention crypto, and certainly he doesn't talk about trading. But that has been already more than hinted, you know, last, I think it was it last year or the year before I don't remember when there was a big, I think it was FinTech Week in Hong Kong. And there was a show in China about Bitcoin on CCTV. Now, you just have to sort of understand that when something is shown on CCTV,

that doesn't just happen without the blessing of basically multiple sort of ministries and so on, right? And a show that discusses Bitcoin in Hong Kong. So it's very much correlated between that. So, yeah, widespread jubilation, at least, you know, at the time, not sure at this moment in time, a lot of people are like, oh, my goodness. but certainly at the end of close of 24, everyone was super optimistic. The other thing to understand is that the youth, particularly in Hong Kong, and particularly in Hong Kong, tend to be very, very pro-Trump to begin with.

And so that kind of sort of added on top of it. They are the majority of the crypto owners, and they also happen to be pro-Trump because they agree with his general perspectives, which is kind of funny because I don't think they really look at it from an American sense. They just look at it from the perspective of, you know, how does it impact me in sort of me in Hong Kong, right? And it's not just in crypto, but in terms of policies towards China, they think that Trump might be better for them.

Not sure they think that anymore, but at the time, that's certainly, you know, what the sentiment was. And wait, I don't understand what is it about Trump that they felt like would be better for them? It's not related to crypto. It's, I don't know what... No, so if you look at, for instance,

what happened in Hong Kong with the umbrella movement, which is largely passed, right? And it's, I wouldn't say it's a majority, anymore, but there was very much a sentiment towards trying to keep Hong Kong. So Hong Kong enjoyed this very special status, which it has lost because of the US, but now we can get into that maybe later. But at the time, Hong Kong was a special status, and there was a hope amongst a certain group of people in Hong Kong, which tended to be demographically younger, that Hong Kong

would somehow splinter off, if you remember. There was a whole umbrella movement thing, and that obviously sort of is gone and no longer an issue, which is actually good for Hong Kong. But broadly speaking, that sentiment that, let's call it sort of we need someone who is tougher towards China, so to speak. That sentiment sort of persists. Having said that, you know, I think there's an ignorance there. And the ignorance is, of course, that, you know, this administration doesn't really care about China or Hong Kong. And in fact, the decision to place Hong Kong within the same sort of framework as China and removing its special status, basically is just a way for sort of the U.S. government to basically try to strangle the sort of

international finance arena that China has through Hong Kong. And so to understand the entire sort of, I guess, crypto and sort of blockchain lens of China is to think of it as how it navigates through Hong Kong. You can't look at it from within China. You have to look at the policies that are happening in Hong Kong as that proxy. When they look at their stable coin regulations, when you look at the exchange licenses, all of these advanced. are happening, with, of course, the blessing of China is essentially the way that Hong Kong has already navigated today. When you think about things like dim sum bonds, the whole sort of Chinese bond market is exporting to the rest of the world through Hong Kong, right? And when you think of that

from a sort of geopolitical standpoint, you know, what happens in the world where, you know, more sort of countries are starting to buy essentially dimson bonds more than they're buying, for instance, U.S. Treasury bonds as an example, or there's a balancing act. You can totally see why that would be something that the U.S. might not really be very happy about. So it's very much at the center of geopolitics. Also, just to add one thing. And on one level, it's actually also incredibly simple. I mean, you know, there are different like prices for Bitcoin in different countries in the world. So there was a very obvious Trump bump, you know, when like he got elected, there was a lot of a widespread view that, you know, his election was good for Bitcoin specifically.

And of course, that just translated all over the world. So Bitcoin investors all over the world are going to, you know, react to this news. So that's just, you know, on the most simple level, it's just kind of about price and Trump's impact on price, which reverberates throughout the world. Yeah. And I did also want to ask, like, when Trump established the strategic Bitcoin Reserve, did that have any impact in Asia where people felt like maybe they either wanted their government to do some similar things or there was even like political chatter?

Maybe at least from a Hong Kong perspective or a Singapore perspective, what I know, there is no conversation around, oh, look at that. Let's add that Bitcoin business. I can tell you that at the advisory council, the discussion of other industry leaders, not myself, who've been trying to sort of suggest that Hong Kong should have a Bitcoin reserve has been sort of, you know, has been pushed. And the reactions generally like, you know, noted, right? Nothing much further than that. But there are Asian countries like Bhutan, for instance, who have made a fairly big deal around the sort of, you know, Bitcoin. you know, outside of these sort of mining process that they have, but, you know,

sort of continuing to invest in Bitcoin and trying to bring that crypto community into essentially sort of their new, I guess, satellite nation that is supposed to be constructed in a crypto-friendly and way. I would maybe also add one other thing, which is that for a while, places like Hong Kong and to an extent Singapore, and of course Dubai have really benefited from this kind of regulatory arbitrage. And I think people saw that as an opportunity, because the U.S. was so hostile towards crypto, Hong Kong actually decided to take that direction as well to bring in talent, and it really helped in a couple in the beginning. I think this obviously changes, and the conversation has framed itself a lot more into realizing that the U.S. is becoming

one to competitive, that it's trying to become the crypto capital of the world, is trying to bring that talent back or retain it, which it had lost. And so there is sort of thinking around that the conversation there, which I think is good, because it just means. means more competition and more choice for entrepreneurs to choose the most ideal places they want to work from. Although I think it's important to add a really important footnote here. And this is something that Laura I've talked about on your other shows. You know, one of the main issues with the U.S., and we've talked about this a lot, is not just like friendliness to crypto or lack of friendliness to crypto. It's a lack of regulatory clarity, right? And that's something that Asia generally has.

I mean, you can argue that a lot of Asian jurisdictions are too strict, but they're generally pretty clear. I mean, there's a lot of things you can't do it and they're really clear about that. And in terms of the U.S., I mean, clearly there's been a really big vibe change, but like in terms of regulatory clarity, there's not that much of a difference, right? I mean, we're not seeing like, I mean, I know that maybe we're working towards that. I don't know. But like, that's not something that we've seen since the election, really, you know? So, I mean, in that sense, I mean, depending on how you define competitiveness, it's competitiveness is just, you know, politicians saying we love crypto, okay, but if competitiveness is actually having rules where you know what a security is and what a security isn't, you know, and you have like clear, you know, rules of the road, so to speak, I don't necessarily know if the U.S. has really like increased its competitiveness in that area thus far.

Yeah, I think the U.S.'s biggest advantage is, of course, the fact that it is access to the most capital. So in other words, that once the regulatory framework, and I think some of the very big players are still waiting to see, you know, what is that clarity in terms of, for instance, defining securities and utility tokens. That's up and coming or the stable coin regulation that's about to happen. We hear about it and we expect it to happen in maybe the next quarter or something or before, but we don't know for sure. And so that's going to sort of dissuade the larger entities to go into that for the time being. But once that's done, once that happens, I think you'll see a lot more activity. Whereas for instance in Asia, I mean, for instance, you know, like in Japan, right,

they were actually one of the very first, if not the only country for the longest time, that actually had a regulatory framework for listing utility tokens. I mean, that's something that most people don't understand or appreciate that, yes, it takes a while, but you have a totally complete, compliant legal framework by the GFSA to do that. Whereas other countries, though, I think are going to sort of do away with that. So this thing that wasn't advantage in Hong Kong, I'm sorry, in Japan, is now maybe potentially a disadvantage because other places like Hong Kong and Singapore may follow a view driven somewhat by the U.S. from a competitive standpoint to say, okay, if you're a utility token and you're defined on these broad parameters,

is not considered to be under the purview of the SFC or whatever securities regulator. And therefore, it opens up a different sort of competitive landscape because you no longer need to have an approval. You just kind of launch it as long as it fits these parameters. The local governments have already made quite clear that NFTs, for instance, are not in that category. I mean, the U.S. ESEC was like, NFDs, yeah, it could be a security. You know, they went after stoner cats and they went after Yuga and they went up to OpenC. Whereas in Asia, they didn't do any of that. They actually were fairly clear that they wanted more like sort of industry self-regulation

as opposed to sort of, you know, regulate from a security standpoint. So that already has been happening and has been helpful in building out the ecosystem in at least our part of the world. Yeah, I did actually want to ask because I saw this stat. I believe Asia has perhaps the largest crypto adoption in the world. I saw this coin desk report that estimated that the region has 22, adoption. They did a survey, I think it was, of 10 Asian countries. And worldwide adoptions at 7.8 percent, they estimate. So I wondered, like, why you thought that was. I don't know if it's

because of these regulations that you were talking about or what all the reasons might be. I'd really have to look at that data. For example, like, what countries are they talking about? And how do they define adoption? Do you know what I mean? Is adoption defined as, like, people who have, like, the number of crypto accounts on exchanges or are people actually using it as a form of You know what I mean? So I don't know. I'll turn that over to you. Yeah, but I'm kind of, like, I feel like that some of those terms can be a little bit murky.

Yeah. And I think it also, to your point, crypto adoption, different countries will be different. So it's like, you know, it's like saying European crypto adoption or, you know, Pan American crypto adoption. It's like Asia is defined very differently. For instance, I would imagine that crypto adoption in Japan is notably smaller than places like the Philippines or, for instance, Korea, broadly speaking, because of, you know, not just a tax situation, but also the relationship with money.

So generally speaking, what we've seen, at least from the perspective of product and product adoption, just anecdotally as well and sort of stat-wise as well, is that places like Philippines and Indonesia, for instance, and Malaysia as a racial are fast adopting because they essentially are, in Vietnam, for instance, because it essentially means in which you have new income sources and you have new economic opportunities. And that's something that, you know, you couldn't really see before in these places. And it also opens up international markets, right? So that's obviously one area of growth.

But the other thing I would also say, remember, if you look at particularly sort of that Asian territory growth, Japan exempted, these are countries that have had nothing in the last sort of 40 years ago, and today have become somewhat economic powerhouses or in some cases really significant. So take South Korea an example. 40 years ago, South Korea's GDP was smaller than North Korea. I mean, let that sink in for a moment. And now it's the 12th largest GDP in the world. And it doesn't have resources or oil or anything like that.

There's pure human raw potential, but it also was really around the fact that it embraced a capitalist framework, and it had property rights and it had, you know, quasi-democracy. I mean, they had all these topplings and overthrowing and every president seems to go to jail. But still, there is a democratic framework around the protection of property rights around the jurisdiction, sort of a legal framework, which allowed essentially for capitalism to thrive in, you know, whatever complex manners. and that thinking is in living memory of that generation. So my parents' generation, for instance, had nothing in China.

Like, they would not have any ability to own anything. And that generation, you know, that grew there, became wealthy from ownership of things and from having a stock market suddenly they didn't have before, right? So they appreciate the benefit of sort of these, let's call it capitalist values. And, you know, I can say this as a Chinese person. And certainly my peers, when we go all over the world, you know, we always like to compare real estate prices. And we always like to look at different things.

We always quantitate things in value because that's how we've been brought up. So our relationship with money, which is essentially sort of much more friendly and more open and more welcoming, is therefore much more compatible with crypto. Coming from the European lens, you know, I grew up in Austria and we don't talk about money. In fact, money is something you just, you know, it's like rude to talk about it, right? And so, and especially in the circles that my mom was in. And therefore, you know, we know nothing about it. we're critical of it and we're fearful of it. And so you have that sort of dimension where, therefore, these places that tend to be

critical of money, generally speaking, and are also critical of crypto. So is it therefore a surprise that financial centers like Hong Kong and Singapore were amongst the fastest growing crypto markets from an adoption standpoint? I don't think it's a surprise at all. It's because it relates to money and we need to be comfortable with that. And I think the places that are comfortable adopt faster. So I subscribe to this view that generally Asia would grow faster than the rest of the world because of that. I think there was a saying.

I don't know who said it first, but I think the American dream is much more alive and well in Asia than it is in America. Actually, before Emily speaks on this, I just wanted to mention about how you were saying that across the region. Adoption is really different. That same coin-desk report had adoption amongst internet-connected people in these different countries. And you're right. So Thailand, they estimate, is at 43%, UAE 37%, India 32%, Philippines 31%, South Korea, 28%. But the Japan is only at 12%. China is at 17%. They had Australian there as well, and that's 18%. But yeah, I think what you were saying about how for some of the poorer countries, this is like a way for them to make money that wasn't available before, which, yeah, would explain. why we see such huge differences across the region.

I want to have one more point. I want to have one more point about South Korea, for instance. And I think there's some distinctions there, right? So in South Korea, you don't have a defy market, which is very different from other markets. So South Korea, all of the activity is in the exchanges for the time being. And I think there was a stat that Mr. was saying something like, I think 60% of the youth under 30 basically own most of their assets in some form of crypto.

but it's for predominantly speculative purposes, right, which I think is the reason why sort of the Korean trading market is so active and frankly crazy at times. But it doesn't roll over into defy activities, which you would see elsewhere around the world, right? And just going quickly around sort of the Japan conversation, you know, the anecdote here would be, and I think Emily can probably comment on this far better,

but Japanese have a relationship with money, much like the Europeans do, which is that it's complex, but it's not something that you openly talk about and it can be sometimes critical for people who make too much money in contrast to other places. And therefore, I think crypto adoption is also maybe related to financial literacy or at least to comfort with finances. Yeah, and I think with Japan, again,

it depends on how you define adoption. But I mean, if adoption is like, you know, trading on exchanges, I mean, as I mentioned, this tax issue is a really big one because why are you going to sell your crypto if you're going to get charged, you know, 55% in taxes? I mean, that's a pretty big disincentive. But also, I think, you know, with Japan, and this is a conversation that's happening around the world, there's the use case question. You know, what are the use cases?

For example, you know, one of the headlines about Japan that I don't think got enough attention in the rest of the world was that Japan was perhaps the first major economy to actually have comprehensive stable coin regulations. But it took a really long time to actually get stable coins in Japan. USDC just launched in Japan, but it's basically, it's taken a really long time. And part of it is because the regulations are very strict. The other part of it is there are just sort of questions about like, okay, Japan has a lot of different forms of digital payments, you know, like what exactly is the use case for stable coins? I think people are still sort of grappling with that and still figuring that out. And I think that's a question just all over the world, right? It's like what are the use cases here? Like what do we actually need this for other than trading and speculation? Yeah. And if you look at places like Hong Kong, Taiwan, Singapore, for instance, which have a large, let's call it labor sort of export market with, you know, basically the domestic helper. industry here. In Hong Kong, for instance, you have a perfect use case here, which is remittance, right, for a fraction of a cost, you don't have to, you know, you don't have to pay anything. In contrast to using something like Western Union, where from a percentage standpoint,

it's significant relative to the money that they're sending back, right? And so the use cases are much more apparent in those places. And frankly, I think it's also one of the reasons why it's attractive for places like in the Middle East, not just in UAE, but basically all of the sort of overseas workers. that are working there literally in the millions, you know, this becomes a very, very simple use case. And stable coins is probably, you know, one of the most obvious ones, which is also one of the reasons why Hong Kong has started to regulate around this. And, you know, soon, hopefully, will come out of a sandbox mode and, you know, launch actual live stable coins in, in Q3 this year.

All right. So in a moment, I will follow up with the ad about how he said Koreans aren't using defy, which I found interesting. But first, we'll take a quick word from the sponsors to make this show possible. Hi, I'm Matt Hogan, CIO of Crypto Asset Manager Bitwise. Look, crypto can be confusing. There's so much noise and the space changes so quickly. That's why, every week, I write a five-minute memo on the biggest stories impacting crypto. In plain English.

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please write a review or leave a comment on an episode on YouTube, Farcaster, or X. Back to my conversation with Emily and Yat. So, yeah, you said something super interesting. You said in Korea, people aren't really using DeFi. They're only using, like, exchanges and treating. Why is that? Like, it's not like, I don't know. I don't think that DeFi protocols have cut off access to Korea.

Or maybe they haven't. I didn't know. Well, first one, it's a regulatory one, the opposite of what's going on in Japan, which is essentially sort of no taxes. And one of the interesting things about trading in Korea has become such a hot topic for the youth, because so many people have it, that various political parties, in order for them to get elected, are effectively agreeing to defer the whole tax discussion, which they've been trying to tax sort of, you know, basically crypto trading, but they haven't. So that's kind of one incentive. So if you make money and

then you basically create gains or, of course, lose them when you're trading, you don't basically have to sort of, there's no sort of taxes in the same way. Wow. So that's actually, it just kind of demonstrates what, you know, what policies do to a market, right? And what kind of impact it can have in a macro sense. But the other two factors we probably shouldn't forget is what happened with Terra Luna. Tara Luna was probably the biggest potential sort of defy play from a Korean perspective. And it's spectacular collapse and everything else that, of course, we all know about, sort of shied a lot of people from this idea of building on chain.

a lot of companies were sort of doing stuff, you know, back then, you know, on, on terror. And the other one, of course, was that the other sort of big story at the time was Clayton, which has since merged, right? But at the time, you know, the whole cacao framework was very hopeful, but wasn't able to sort of bring sort of that kind of adoption and didn't really work out the way that people hoped. And so you've had more sort of, let's call it somewhat failed sort of, I guess, defy and on-chain experiments. and unlike other parts of the world, Korea has a fairly insular economy from a language and culture standpoint. By design originally, but that created a very domestic online culture. I mean, you don't have Google there for protectionist reasons, right? You don't have Facebook there for the same reasons, but that means you have people are navigating and searching things differently.

You use NAVER or you use NHN or when you use kind of, you know, kakao, there is a different cultural context where you use it and you use it in the rest of the world, creating different type of norms and cultural sort of meanings, and therefore the adoption of, let's call it, you know, Western approaches is not the same. So you do have that sort of, sort of, I guess, semi-isolation and sort of impacts that as well. So all these different forces essentially are making it harder for DFI to adopt. That said, one of the hopes that we have with Mokovirce and with SK Planet is that we can basically create enough incentives in the Korean market for people to go on chain. Because at the end of the day, you know, if you can make better yield, if you can get better rewards, if there's long-term

better benefits, then what's the difference between being in exchange or basically doing it sort of, you know, on-chain? So that's kind of the goal, but it is going to be a much longer road. It's not going to happen overnight. Wow, that is so interesting. I don't know how I forgot that perhaps Terralina might have had some effect on that market. So I actually want to circle back to something that we started to discuss, which was stable coins. And, you know, we're in this situation where like 99% of all stable coins in the world are pegged to the value of the U.S. dollar. But I wondered, you know, I don't know if there's any demand for local fiat denominated stable coins. And then both of you have kind of reference the different stable coin legislation in some of the different jurisdictions.

And I wondered how any of that is affecting, you know, the way entrepreneurs are approaching this area, trading activity or just even uptake of usage. of stable coins. Yeah, I mean, that's an interesting question. So, I mean, Hong Kong, like, different stable coin regulations are different. So Hong Kong stable coin, they're allowed, it doesn't have to be an HKD stable coin. It can be, you know, different. It can be backed by different fiat currency. So that's sort of explicitly laid out in the regulation. So, you know, we'll see what happens, right? Like once that actually becomes law, you know, we could easily see non-HKD stable coins. That's allowed. Japan's an interesting story because in Japan, you know, you can have JPI back stable coins. You could have U.S.D. back stable coins.

So far, we really have the only kind of widely acknowledged stable coin right now is USDC. There are some very specific barriers that are preventing JPI stable coins. So for example, this is again in the regulation, if you're a JPI stable coin, there are certain restrictions on how you can sort of invest the reserve assets. And it basically has to be in bank deposits. And that's basically no interest. So there's not really a business model there. Whereas like for the U.S. dollar back stable coins, you have a little bit, you're more exposed

to kind of like U.S. dollar. interest rates as opposed to JPI. So it's a little bit, there's a little bit more like fluidity there. So that's like one specific example of why we're probably, there's probably some delay on JPI stable coins in Japan. But yeah, I mean, I think like I all, I think that probably part of the reason why at some level Japan wanted these stable coin regulations was to see kind of like a JPI stable coin, you know, come into play at some point or or other. So yeah, I don't know, yeah, if you have anything to add to that. Yeah, and maybe just to add on the Japan front, you know, one of our key shareholders is MUFG,

is one of the largest banks of the world, and they explicitly cannot do stable coins for the time being, although I think there was in hopes and ambitions to do that. So there, the regulatory framework for them is a little bit more prohibitive for the time being. Whereas in Hong Kong, we have a joint venture with Standard Chartered, which is a note issuing back in Hong Kong

to basically issue a stable coin, and right now it's in sandbox mode. And so it's quite different from that perspective where you have a large major bank in Hong Kong, basically partnering with a Web3 company, which is kind of interesting, right? It's kind of like imagine what would happen if there was a big bank partnering with,

not an exchange necessarily, but like a Web3 operator of some sort, right, to basically launch something for, you know, the fusion of these two markets, which is basically bringing Web2 users into Web3. And for a bank, it's, of course, important because they can basically do all of their sort of transactions over a stable coin.

The current framework is a Hong Kong dollar-based slip coin, but because it's HKMA licensed, and this is kind of, again, a differentiator, Most of the stable coins, if not all of the stable coins out there, are a combination of different licenses from different regions, you know, put together for like payments or for custody. But this is a specific stable coin license, which perhaps the US will do as well. But that possibly makes it the first jurisdiction that has a sort of stable coin issue license from a central bank. So that's kind of interesting as well, right? I mean, I think it hasn't happened before.

And so that's unique as well. And so you think about what's the opportunity and why is that important. So first of all, Hong Kong dollar is a safe way to do because Honga dollar is maybe you could describe it as the OG stable coin because it's pegged to the US dollar. And that was strategically done so, right? And it was pegged to the US dollar because it was the clearinghouse for international markets. And, you know, when you talk to the HKMA, there's an absolute zero indication that will ever change. A lot of people are speculating, oh, it's going to, you know, change the peg to rem and B and whatever, not going to happen. At least not going to happen until sort of unless Hong Kong doesn't want to be in international clearinghouse.

And just to be clear, Hong Kong's strategic role for China is that. It's the one thing that Hong Kong can do that nowhere else you can deal within China, in terms of basically trading foreign assets, trading shares, bonds, and all that kind of stuff. And I think there is a recognition. And I think in the U.S., they recognize strategically, at least the current administration, that the stable coin is a different way of extending dollar hegemony. And I think I wanted to continue to do that. And especially in the market where with Japan or China or other places selling off,

basically their T bills precisely because they have to manage the market or because they need to have less dependency, stable coins is actually the way in which you can further the trade and the value and the importance and influence of the dollar. So if you're China, you know, how do you respond to that? You know, nobody's going to trust the CBDC in China. I mean, they're obviously doing that, but people aren't going to be holding that. And I think, you know, the one thing that you can sort of recognize about China is that they're quite pragmatic and practical. So issuing a stable coin out of the one market that is trusted in the international financial markets from a clearinghouse standpoint is Hong Kong, right?

I mean, Hong Kong, I think, is the largest sort of non-Chinese sort of Rememblebee clearinghouse. I think we do over, I don't know, it's like $2 or $3 trillion of remand-b a day. So that's like $200 to $250 billion a day in remunbee trading through Hong Kong. I mean, people, you know, it's, of course, much smaller than U.S. dollars overall. But from an influence standpoint, you can kind of see where that's going to go. and especially in light of what's happening with tariffs, becomes even more important. So you can expect that the stable coin in the future

isn't just going to be home-one dollar-based, which again is safe because it's US dollar pegged. It can extend into other currencies. And I think the big opportunity, sometime in the future is probably CNY flows. When that happens, don't know. There's a lot of work that has to happen, but I think that's the real opportunity.

And you kind of referenced this earlier, but I want to dig into it a little bit more, you know, because so first of all, Emily was like, just because trading crypto is banned in China doesn't mean people aren't doing it. And then you talked about this, you know, special on Bitcoin on CCTV, which, you know, being a journalist, I just have to point out that, like, media in crypto in China is very much like top down. It's like coming from the government, you know, somebody might use word propaganda for it. But I did want asked just like, you know, does it seem like there's been this theory floated that China is using

Hong Kong as this testing ground for crypto policies that it could potentially bring over to mainland China. And I wondered like if you thought that was a legitimate theory or how you're reading any of these signals for what it means about. I've heard that many times. So I think first you've got to understand what is the Chinese lens overall. And the Chinese lens overall, and I think most of the West misunderstands this deeply. It is not sort of, you know, sort of conquest of the outside world, you know, kind of sort of stuff, right? It is mostly as generally around stability and harmony within the, it's within China. You have to understand that China sort of, it's a homogeneous society, more broadly Han Chinese,

but historically has always been ruptured from within, like histories of revolutions. Typically, if you look at dynasties, you know, there's a flood, there's a revolution, right? That's kind of sort of the history around sort of, you know, what happens in China and it very much shapes a policy and thinking. So it is about internal stability. So the one thing we should not expect, therefore, because it's inherently unstable, is when you have speculation that is fairly rampant. So in a classic sort of trading world in crypto, it's going to remain speculative and volatile. And that's what China does not want, which is the reason they talk about blockchain and they talk about Web3, but they're not going to talk about trading and speculation. So I think this idea that people are going to start trading crypto the way that we do in the rest of the world, it's a bit of a pipe dream.

I mean, you know, it's a nice narrative, but I don't think it's going to happen. But it can and will happen through Hong Kong. And that to me is, you know, sort of what Hong Kong's role has always been. Because Hong Kong is contained. It also has a very, very high financial literacy rate. People kind of know what they're doing. There's a legal system that deals with this. If people are upset in Hong Kong, they know what they're getting into.

If you have a whole bunch of people in Western China getting a separate over losing money, they're not going to understand this. It's a totally different situation. So we have to wait until those markets become much more financially literate overall, which will take a while. China has lifted 400, 500 million people out of broad poverty in the last 20 years. The one thing they don't want to do is create something much more unstable overall. And we can agree or disagree in the method in which they've done it. But take a look at what they did, for instance, in terms of policies around if there's stock market instability, literally CEOs can't leave the country and they can't spend certain things.

This can never happen in the West, right? And it's not because they're worried about people sort of taking money out, per se. They want to make sure that people are accountable and that they're trying to solve the problem because of the fact that they want stability in the country. You know, when they went after, for instance, the tutoring companies, I mean, this is the other story that perhaps people in crypto don't know. But they basically killed all the tutoring companies in China. Why did they do that?

Because it was a hugely, hugely profitable business because every Chinese parents wants to make sure their kid is well. But what they did was they basically outlawed it because they sensed that it was creating great inequality. The people who are able to basically pay for better education can then send them to better schools and then create a more unequal society, which creates sort of these pay differences.

And they basically went after that. And from an economic standpoint, it was a disaster in the sense that companies went to zero, investors lost money. But broadly speaking, they felt from their policy standpoint that that was a better, more fair outcome to ensure long-term stability. Again, we can agree or disagree, but that's their frame of mind, right? And so, therefore, I don't believe that the way that we hope, some people hope crypto

speculation and trading will happen in China will happen anytime in the maybe even distant future. But Hong Kong will be that playing ground, as it is already today in other financial sectors for Chinese people. But then just finish the thought on when you talked about how they showed that Bitcoin show on TV. like what interpretation do you have of that? Well, first of all, it's to acknowledge Hong Kong, right, as a center. And one speculation would be that I think China already knows, as most people know,

that there's a large number of very wealthy Chinese that own Bitcoin. Right. So that's not a secret, really. And it's a little bit like sort of the classic sort of, I guess, sort of thing around, you know, let's own some real estate overseas, let's own some assets overseas, let's hedge ourselves, right? And during COVID and because of what happened earlier in Hong Kong with the protests and the sense of sort of insecurity, a lot of that money had moved to places like Singapore. So you saw a flood of basically sort of, I guess, call it, you know, how capital moved to Singapore for that reason.

And that's just another way to say it's okay to do it in Hong Kong, right? And if you're thinking about owning crypto, maybe you can do this in Hong Kong and don't move it away from a place like Singapore in which China has zero influence. So that's kind of one aspect. But the second thing was also really, they didn't talk about other tokens. They specifically talked about Bitcoin. I think there is a recognition that Bitcoin is something. The thematic overall for the last couple of, really not capital years, but more than just a couple of years, is a broader theme, and this isn't just Chinese, around de-dollarization.

And de-dolarization doesn't mean to say that we want the dollar to go away, not at all. But rather, de-dollarization is more around making sure that the dollar can be weaponized the way that it is and there are basically counterbalances. And that's very much thematically there when you think about Bitcoin. as a potential force around that. And I do think that people recognize that. So you can't trade. And again, as I said earlier, owning Bitcoin in China is not the problem.

Trading it is the issue, right? So if you want to own it, somehow, some way, somewhere, that in and of itself is not an evil. I have a slightly different take on this. So, like, I definitely agree with what, yeah. I mean, the idea of stability, yes, that is absolutely true. Like, that is a cornerstone of sort of everything that goes on in China. But I should have argued for a long time that crypto isn't actually really banned in China. Like that's not really true.

Like that's just kind of like a media trope that people say. But like if China actually really wanted to ban crypto, like it would. Like, you know, China's pretty good at banning things when it wants to do it. There are, it's not that hard to trade crypto in China. So the question is, it's like, why is this happening? It's not because, for example, here's the problem with, here's the problem with the Chinese market is that we don't have a lot of data. It's a black box because there aren't like exchanges openly operating in mainland China. When there were, you know, back before the crackdown in 2017, we could see that China was like the largest market in the world.

Now we don't have that exchange data to point to. But sometimes that data leaks out. And the last time it did was I think, you know, a couple years ago, I think it was maybe 20, 23 when the Wall Street Journal had access to finance data in China. They did a big report on it and they found $90 billion of trade in one month in China. Okay. Now, there is no chance that this is happening and Chinese authorities don't know about it. Like absolutely zero. Like that's just not, you know what I mean? There's this huge thing in the Wall Street Journal. Like that's, there's this. That's just not happening, right? So the question really is, is like, why is there this sort of, like, de facto ban and yet there are people trading and China is, you know, letting it happen to a certain degree. Basically, what China did is this. And again, I agree with the that's fundamental argument about stability. It's all about stability. What China didn't like was what was happening in 2017 where, like, everybody had an ICU. Like, like, it was just like a ridiculous.

I mean, it was totally out of control. It was like an ICU mania and like, yeah, they weren't into that because, again, what they didn't want to happen was that, like, the average mom and pop use their life save, lose their life savings in crypto, and then they go to like, you know, go to Beijing and complain about it. That's like the last thing that China wants, right? So that's kind of when the crackdown happened. But that doesn't mean that they snuffed crypto out, like not at all. Like, hence what I just said about finance.

Basically what they did was they raised the barrier to entry. So, you know, what it means is that like if you're just like really, just want to really easily go and like you're totally unsophisticated investor, you don't know anything about crypto or about trading and you want to open an account and trade remedy, it's not that easy. But if you just, like, you know, have like a little bit of sophistication, you know, there's a few little workarounds. It's actually not that hard, you know? So I think that's more of sort of like China's strategy. Like they're not really like letting this pass by. They're just raising, they're raising the barrier. And then in terms of Hong Kong,

I mean, this is like kind of the biggest question. Like what I think people generally agree, you know, as yet said that like Hong Kong is to some degree sort of this like gateway to China. But what does that mean? And that's where people disagree. Like I've definitely heard some people say like, oh yeah, you know, eventually China's going to be open to crypto. I'd say that's the minority view. I don't think most people think that like all, you know, in five years, there's going to be just all these exchanges openly operating in China because China also has capital controls. Like that's a big part of the story. China is very strict capital controls and they still care about that. So I don't imagine that they're suddenly going to be like, oh, never mind,

you know, I mean, anything can happen in China. We have to also say that. Like, anything can happen. So I could be wrong. But I doubt that that's going to happen. But clearly, you know, when you look at these exchanges that are investing so much. in the Hong Kong market, it is so hard to operate an exchange in Hong Kong, right? For a while, there are only two exchanges in Hong Kong. It was hash key and OSL. Both of these made a huge investment to do this. It costs a ton of money in terms of compliance. It costs a ton of manpower. It just caught a ton of resources. Hong Kong is not a big enough market to justify that investment, right? And I think like if you talk to people of these exchanges, they'll

basically say as much. So they're clearly doing it for like a longer game and for like a bigger market. But like if you ask them like what exactly that means, I don't think anybody really knows. I don't think anybody really knows yet, right? It's clearly like Hong Kong is a gateway to something, but nobody knows like exactly what that thing is going to look at. But I will say, like, the thing about China is that China is very capable of turning on a dime. Like, that's the thing. It's like anyone who says they know what's going to happen in China is just lying or just, you know, just dumb. It's like nobody knows. Nobody knows. And so if China in one point decides that, you know, this is to their advantage to like allow a crypto market, like they will do it and they will do it

fast. I'm not saying that's going to happen. I'm just saying like you can never really like count anything out because things can always change and you just don't really know like where the calculations fall. But I'd say like for the most part, that doesn't seem to be in like the immediate roadmap for the reasons that I said for, you know, the fear of speculation for capital controls. And right now it's like again, if you really want to trade crypto in China, you can find a way to do it. And so there's no reason to like open the floodgates, you know, as such. Yeah. Maybe I just want to add to that. It's an absolutely fair point Emily makes around, you know, it's the same, for instance, when you look at sort of, you know, basically people using things like Tor and sort of,

you know, bypassing the Great Firewall of China to get information and stuff. It's a minority number of people generally speaking. Of course, they know people are doing it. They're not actively hunting people down saying you can't do this, but there's a sort of core that allows it to do it for the activities because they have reached a certain level of knowledge. And frankly, I think this is kind of what Hong Kong is good for, because the kind of people who can park money in Hong Kong. Hong Kong are not going to be your average sort of Chinese person. They're going to be someone with a certain amount of wealth that can send their kids overseas that have certain kind of knowledge or they work for financial company or they work for some

enterprise or that kind of stuff. And so they're the ones who can then basically partake in this stuff. And I think the big hope for the hashkeys, O sales and the other ones who basically got their licenses recently, I think it's five in total, but it might be more now. I think it's around. I think it's 10 now, actually. It went from, I think so. We should double check that.

But I think it's up to 10. But if it was two for like a really long time. Exactly. And now I think it's up to China. But the point being that it's accelerating and it's precisely accelerating with the hope that in the same way that Chinese, when they come basically to Hong Kong and they can basically buy and do certain financial things they can do in China, that same audience can eventually maybe also do it in crypto.

So right now, for instance, you know, Bitcoin ETFs and Ethereum ETFs are available in Hong Kong, but not for Chinese nationals. So if you're basically from China, you can buy a Bitcoin ETF in Hong Kong at this moment in time. but maybe in the future you can and would make sense for it to do so. The other thing to Emily's point, yeah, crypto isn't explicitly banned in the manner that people say it is, that is media bait for the most part. I would add that one big policy direction around that was around energy security. And energy security was and continues to be a big issue for China because they don't, you know, it's a reason why they invest in sort of green energy. They don't have access to the same oil reserves.

They're being cut out of what, you know, they did recently a deal with Saudi, you know, as a way to sort of establish that. But, you know, they've been really cut out of the major, you know, classic fossil fuel type of sort of arrangements. And when you think about the size of its reserves, it's, it is arguably probably one of its, you know, bigger national security concerns. And so, and also from a stability standpoint. So if you're going to use the energy to mine Bitcoin, which hires basically literally nobody, but makes all sorts of money from an export dollar,

or do you use the same energy to basically hire thousands of employees in that same province or region? you know, what's going to have a more harmonious and better, long-lasting sort of solution for that society in that area? Clearly, the one that highest thousands of people, right? And so, you know, it wasn't that long ago where China still had brownouts and people had to quota their energy, which is the reason why they had to burn coal, for instance. So Bitcoin is not, you know, mining is therefore, I mean, at one point, I think China had like over 40% of miners. I mean, it was insane. But it just didn't make sense for China because

it was going to destabilize them in a different way in terms of employment, for instance. Yeah, and actually you referenced briefly the digital you on there. Are you getting a sense that that is gaining adoption that people are using it? Well, I mean, it's used, it's really for bricks and it's really, it's not going to be, it's not broadly used in terms of, because it's a CBDC, but from a, you know, brick settlement perspective, people will use digital run, but, but it's not, it's, you know, again, it's not getting the kind of adoption that I think a stable coin will also. ultimately in the longer term.

You know, so if you do trade and business with China, it gets settled in Rememble, sure, but it's used as an intermediary. It's not used as a way to sort of store and hold. Oh, wait, wait. And just to understand, you feel like it's that the government isn't even aiming for it to be used that way. It's only to just have trade with other countries. I can't speak for the government.

I mean, obviously, when you're launching an initiative, like a CBDC, you're hoping for widespread adoption. But I think the widespread adoption, it's a little bit different. from a stable coin versus a CBDC, which is, I think a CBDC, the way that they'd be looking at it is essentially as a sort of, you know, sort of making it easy for remittance and transfer of money. And obviously, to some extent, extending the influence of the UN. But in the case of a stable coin, there's also the aspect of basically holding bonds and treasury assets as a result of that. That's not what I think a CBDC would do in itself, right? So I think it's maybe a little bit different. The other thing, of course, is that the monetary strategy of China, because it's a closed market, is controlled and therefore makes it very difficult for outside investors to, you know, they want exposure. They can buy basically dim sum bonds, but they're not going to be, you know, it's hard, right? It's hard because it's a close capital market.

Korea is the same, by the way. Korea has, you know, maybe a little looser, but has also a fairly close capital market, which is the reason why the crypto exchange world in Korea is so contained. And this reason why you have a premium in Korea because of the fact that you don't have typical sort of capital flows as you have in other markets. Okay. So basically those two governments are trying to kind of control their internal economies a bit more or something. Is that the way to think about it? It's a planned economy.

China is a planned economy. And I think that's also one of the big stresses. But Korea is different because it's more capitalist, but they're just trying to Yeah, so capital controls are still within Korea. You can't move money out of Korea that easily. And it's very much, it's, you know, Asia has, you know, Asia has examples of countries that are sort of managing them in a way in terms of looking at the different lessons around the world.

I think if you look at Saudi, for instance, it's the same as well, right? So people outside might not appreciate that even the fact that they have one of the U.S.'s largest trading partners when it comes to oil and that kind of stuff. stuff. Actually, it also doesn't have freedom of capital. So, so yeah. So, you know, before we, before we started recording, we also chatted briefly about Korea. And Emily said something interesting. She said that Korea's lifting a shadow ban, an institutional crypto investment, which was interesting me. So tell us about this shadow ban. And if it's a shadow ban, meaning not an official ban, then how do you lift it? And what do you think all this will mean for Korea? Yeah. So Korea is such an interesting market because generally speaking, like in other Asian markets, like you look at Hong Kong, for example, the Hong Kong authorities are sort of more comfortable with like institutional investment than they were with retail investment, right? Yeah. Like at first, you know, for it kind of, the doors were open to institutional investment before or to corporate investment rather before it was open to retail, right? Like there was this idea that like opening to retail was like opening the floodgates. Korea's kind of the opposite. So Korea, you know, has just been purely a retail market. And. And. And, you know, and when I mean shadow ban, so this is like something I've been sort of trying to figure out for a long time. Basically, like, when I say shadow ban, it's like there's not this official regulation in crypto where it says like, okay, you know, if you're, you know, if you're an institution, you can't invest in crypto. If you're a corporation, you can't trade crypto.

But there's generally like the sense that it's not allowed. And there's a very strong sense that it's not allowed. And I guess like somebody said something at some point. I've been trying for a long time to figure out exactly like where the origin of this is. but it's generally just like sort of well-known in Korea that this is something that you can't do and that is not looked well upon. So that's what I mean by shadow ban. I don't think it's like written in some regulation anywhere saying you can't do this. But basically, I think it was in March of this year, the Financial Services Commission, the FSC, basically announced plans to sort of lift this kind of shadow ban on institutional crypto investment.

Now, this is kind of like a step-by-step piece-by-piece thing. this isn't going to happen like all in one in one throw. There's like a bunch of things that happen to happen first. Like right now, I think it's like, you know, it's open to like non-profit corporations and law enforcement agencies can sort of open accounts and then like eventually like we'll see more opening. But yeah, I mean, the short answer to your question is that like once this actually becomes a thing, like once Korea is no longer a purely retail market, because one thing we've seen is that even as just a retail market, Korea is so powerful, right? I mean, especially when it comes to things like alt coins.

And this is something that's always fascinated me about Korea. There's just been so many times where like I've seen an altcoin just like shoot up seemingly for no reason. And it's like, oh, it's something happened in Korea, right? It's something happened on Upbit or, you know, so. But and this is purely the force of the retail market. So I think like, you know, once we have corporations kind of like entering the fray, yeah, I think it's a really big deal.

I don't know exactly when this is going to happen again. I think it's like a phase thing. But, you know, it could be very soon. And, you know, definitely like the, it's been set in motion. So yeah, it's definitely a big deal. Maybe to augment some stuff around that, basically market makers are not allowed in Korean exchanges. So technically there are no market makers operating there. So that's kind of one aspect.

So the institutional side of crypto in terms of trading, for instance, isn't possible. The second part, and I think it's correlated around areas around basically sort of capital flight, right, for institutions. They just have the ability to move crypto around much easier, whereas it retail, that's not the case. So in Korea, if you are moving money into your MetaMask wallet, you have to register that wallet, essentially KYC with the Korean authorities. So that's the other thing, right? So that entire country has a framework around where if you have a defy wallet, they know which one is your defy wallet, right? That's, again, something that is totally different in other parts of the world. So there's that aspect.

And then, you know, if you look at Korea's history, elites is modern capitalist history, which is really just over the last three plus decades. it's always had to grapple with, you know, major corruption cases, right? Which is the reason why every president seems to somehow land in jail of some sort. And it's almost like a right of passage that if you're a major CEO of a company, you at least flirt with going to prison, whether that's justified or not. That's just how the Korean judiciary has worked over the last few decades. And so I think there is that aspect as well, which is the sort of this, you know, like tension between the newly generated wealth, which has benefited Korea,

but also created that sort of, I guess, social, political sort of scenario, which, you know, and talk to anyone in Korea and ask them about, you know, what's happening with the judiciary there, and they all have all sorts of stories to tell you just because it's such a very Korean thing, right? And you see this Korean drama. It might explain why Korean drama is so incredible because it's probably a lot of it's true. I don't know. I did also want to ask about potential crypto IPOs in Asia just because we're, facing this moment where potentially in the U.S. we would have a number. And I know that coin check,

which is a top crypto exchange to Japan, I did list on the NASDAQ here in the U.S. in December. So I wondered, you know, if you could explain kind of like why they chose to list in the U.S. And, you know, whether you thought we would see more public offerings from crypto companies in Asia. Yeah. So I feel like this is something that just didn't get as much attention just for how significant it is. So, you know, full disclosure, I'm advising Coincheck Group. I'm a senior strategic advisor there. But I say very sincerely that I think this has news value because, you know, basically before they listed on the NASDAQ, there was one publicly listed exchange in the United

States versus Coinbase global, right? And now there's two. And one is Japanese. Like, that's really interesting, right? I mean, like, I feel like that's just a, you know, a very significant data point. And I think, you know, what's interesting about it is that, I mean, when you look at, you know, just sort of like compliance. So, you know, Japan is, you know, quote unquote, quote.

crypto-friendly, but it's also like one of the toughest jurisdictions in the world to be a crypto exchange, right? So, you know, here you have an exchange that's regulated Japan and then also kind of like manages to get, you know, through the compliance to list on the NASDAQ, that's like kind of a double, double hurdle there. And I think that's something that's very unique to sort of Japanese exchanges. But what's interesting about this is that this is, this story is not really about the Japanese exchange. This is much bigger than the Japanese exchange. Basically, this is a story about Coincheck Group going global. So, you know, why did they list on this? So first of all, all, like, just to be clear, this is not like U.S. users can go and use coin check. Like, that's not

what this means, right? It's not like coin check coming to the United States. Basically, what this is is it's kind of, it's kind of an acquisition place. So basically the idea is that, like, coin check group wants to basically go global and, you know, kind of acquire. And they see sort of like NASDAQ stock as like an acquisition currency. So that's really kind of. And so, you know, so basically this story interested me for two reasons. One, the fact that the second publicly listed exchange and the U.S. is a Japanese exchange, which just seems like just very interesting from the standpoint of like crypto history. And also just the story of kind of a Japanese company going global and, you know, aspiring to become like a player, you know, on the global stage,

I think is also very significant because we don't always sort of see that. So yeah, that's what it's about. It's not about like opening up coin check exchange to U.S. users. It's about, you know, using NASDAQ stock as a kind of acquisition currency and kind of becoming an even bigger player globally. As for your other question, yeah, I think we are going to see more exchanges listed. You know, it's been kind of, you know, slow to now. But I think, yeah, that's going to be something. I anticipate we will see some of that. I know that there's been a bunch that's been trying to do it for a while, but it's tough, right?

I mean, there's a lot of regulatory hurdles to get through in order to do that. Yeah. And just when you said this was interesting, given Japan's history and crypto, I think you're referencing Mount Cox, which is probably why, you know, they have these strict regulations. But it's also why things like, you know, when FTX went under, then FTCX, And FDX Japan customers, they got their coins back, like, you know, in a very orderly fashion and very quickly. Yeah.

Were you going to add something on there? Yeah. So quickly, I mean, I think we should definitely expect a whole bunch of more IPOs. Certainly within our portfolio, we're seeing a lot of conversations and discussions about sort of, you know, listing some of those businesses. Not necessarily all big ones, but there's a thought around that. We should also remember that, you know, in particular, Japan had a number of companies that were actually engaged in crypto gaming as a public entity. I mean, we were a public entity ourselves as anemoka brands in Australia when we engaged in crypto, which is the reason we got delisted.

That's a different story. But for instance, if you look at Japanese gaming companies, you know, there's a couple examples of Japanese gaming companies already engaging actively in crypto. It's not just sort of smaller listed companies, but some of the largest ones out there that are basically built out Web3 strategies, whether it is Square Enix or Sega, for instance, right? they've gone out and sort of said we're going to do something. And most notably, obviously, is Sony. You know, with the Sonea on blockchain, again, something, you know, to Emily's point, the West just doesn't really talk much about the fact that an enterprise like Sony, I mean, you know, one of the largest corporates in the world launches their own blockchain.

I mean, isn't that amazing news? Doesn't it show something what's happening in this part of the world that, you know, you can't yet imagine a major U.S. entertainment corporation sort of would launch yet? I mean, it's like Microsoft saying, we're going to launch our own blockchain. I mean, that would make headlines, right? So I think there's a little bit of that. And of course, you have the micro-strategy copycats like Metaplanet and so on that are sort of initially leading the way and demonstrating value. And therefore, every LISCO is thinking about, hey, maybe I need to do something.

There's a little bit of the fashionable element. You have a little bit of that hype. But at the same time, you also have companies therefore thinking about, well, you know, what problem could I solve with that? And so I think it opens up these pathways. Again, this is the classic sort of capitalist argument. Sure, there's money to be made, but then if there's money to be made in a way that actually makes sense, that's better and more sustainable. And they basically have an incentive to do there because it might help them and therefore build out or expand their businesses that they're already doing. All right.

So before we go, I just wanted to make sure that we touched on gaming because, you know, for the longest time, people have always said that that seemed like an industry where, it seemed right for crypto to come in and take off because it was kind of, you know, the gaming industry had been doing similar things in an analog fashion for a long time. And Asia obviously is a big gaming center. You know, you just mentioned Sony. And we have seen previous trends around crypto gaming take off in Asia, even if they died down eventually, such as, you know, Axi Infinity. I think a lot of play-to-earn activity was in Asia.

So can you just kind of tell us what you think. of the current activity around crypto and gaming in Asia and, you know, whether you think it's poised to take off? Yeah. So generally speaking, actually interesting enough, a lot of people don't talk about this enough, but 2024 in terms of crypto gaming adoption has been one of the best years ever. I think we close a year with, you know, close to 7 million day active players in Web3 gaming, which, of course, in the broader sense, isn't at large.

But when you consider where the market was in the sort of happiest of days, which is like late 21, It was really only a million, maybe tops two million daily active players. So the numbers have gone up for a number of reasons. One, because of, you know, in some ways because of ton, right, basically a telegram opened up a distribution platform that didn't exist. I mean, most people don't really maybe know that Apple is still restrictive of using NFTs inside games. If you have a game and that uses NFTs, Apple actually doesn't allow that, right? So that's kind of, at least if it has utility. So that's kind of an example where distribution is sort of stuck.

Steam is the same, you know, you know, so you still have those sort of, let's call it, you know, sort of, you know, old era sort of regulations or like in some company in positions, that has impacted, but it's still growing very well. The, and a combined market cap of, you know, sort of gaming tokens is probably somewhere between $12 to $18 billion. It kind of depends on which day you're looking at. So in the broader context, not bad at all, but in the sort of context of broadly crypto, it seems bad.

And I think this has a lot to do with the nature of tokens. So meaning that tokens are basically not only sort of demonstrated of the utility, I think, most of the tokens that's not true. In fact, there's a mixture between the speculative quality and the utility quality. And while the utility of the gaming tokens has increased rapidly, the speculative aspect has declined rapidly because a macro sentiment on gaming has been broadly bad. So, for instance, when you talk about AI tokens that have done really well last year, that's not to say that all the AI tokens are actually sort of booming in utility

and are competing with open AI or that kind of stuff, not even close, right? And we're exposed in the market and we think they do great stuff. don't get me wrong, but, you know, there's no correlation between its market value and trading volume relative to its utility. That's that's sort of the nature. And our view is that tokens generally are sort of market-priced information. So in other words, if there's a market that's happening in the global context, then there's going to be impact in a token because it informs in prices just like the stock market does. You know, if quantum is hot, quantum stock prices do well. But, you know, like seriously, right? Like, it's like, you don't have a long, you don't have an immediate

lens in where legility happens in terms of suddenly we have, you know, functioning qubits next year, not at all, right? So there is that aspect. And I think tokens are very much because of its 24 by 7 nature in that area. And so gaming, most people might not realize if they're not in a gaming industry, gaming has been on a slow decline post-COVID. So it was on an absolute high. Now, this whole sort of gaming sort of narrative in Web 3 accelerated during the time of COVID. What were we saying? We're saying we're only going to live online. We're not going to travel anymore. We're just going to be on these calls and we're just going to be playing games online because we have nothing else to do. And even after COVID, we're going to think that's better and more efficient because,

introverts had a victory lap. But it turned out that most people were like, actually, you know what? Revenge travel. We're coming out and we're meeting people. And actually what happened was that gaming stayed largely flat but didn't increase. But what else happened? Well, a monetary inflation. So, you know, the cost of milk went up, the cost of everything went up, but the cost of gaming

did not. So you can still buy a game for the same price that you could pre-COVID. Now, just imagine that for a moment, right? Your salaries go up, your costs go up. So the gaming industry on the net value has actually experienced a slow but horrible decline on a sort of, you know, pure money basis over the last several years. And there been gaming layoffs. It's been harder to make good products. All that stuff. Console sales have been lagging. So the result has been a negative sentiment on gaming macro, which has affected essentially token prices. as macro as well. So that's kind of how we take that view.

But we think there's major sentiment changes this year. And let's see, maybe we can come on a podcast later on and see whether it's right or not, which is that we have two macro events that are really going to change the gaming scene, which we think is going to have a major impact. The first one is Nintendo Switch 2, which is launching the summer. Just for those who don't maybe understand the impact, Nintendo hasn't launched a new console in eight years, and they tend to be pretty revolutionary in their designs.

And once you start buying a console, you tend to buy 10, 12 more. games, and also they've pushed the boundary of the pricing of the games. It would be interesting to see in June what happens when they launch it. Myri Brothers Digital is charging $80 and physical $19. Now, just, again, you can buy a Nintendo Switch game for $50 or $60. Now, if they can get away charging $80 to $90, which is basically their target price, then every other gaming company out there is going to have license to increase, you know, maybe $10 or $20, but they'll catch up with inflation.

So that's going to create basically a sort of a macro event in terms of more revenues, more growth, more positivity, more investment in the sector. The second, which is, I think, the bigger event is GTA6. So for those who are not in the gaming world, they might not know, but GTA6 is probably going to be the largest cultural event, not just in gaming, but broadly speaking. And it's the reason that if you're going to buy a new console, whether it's a PlayStation on Xbox, you'll do it for GTA6. The other interesting thing about GTA6 is that you can run RP servers.

These are servers that you can run yourself. That seems for Grant Theft Auto, if anybody doesn't play video games like I know. I was like, wait, what is this? I'm sorry. Yes, GTA is Grand Theft Auto, right? Sorry, of course. And Grand Theft Auto is probably the single largest game launch in the history of games at this point. And people are going to buy consoles.

They're going to spend money. They're probably also going to push the price boundary. But as I said earlier, you can run your own GTA servers. And previously, it's not to say that you should expect take two to suddenly say, hey, we're going to launch a token. Not going to happen, very likely. but when people are running basically tokens on their GTA servers, Take 2 might not take an aggressive view on it because of the fact that regulation is much more friendlier and open, hopefully, at that point in time,

meaning that there's no reason to block it because there's no risk around it. Whereas in the previous administration, you would have to try to stay as far away as possible. So there's that added element. But narratively speaking, gaming is going to be at a high point, we believe, by the end of the year, which will have a broader impact on tokens as a whole. And of course, with a broad increase of Web3 gaming, which is already happening, but isn't going to be commensurate to the token prices, right? There's a bit of a disconnect there just because of the fact that, you know, there is a lot of speculation in Web3. I just want to add two really quick things.

I know, yeah, it lives and breathe these things, but just two really quick things about gaming. Just one very macro thing is that maybe sort of too obvious to even say here, but one of the reasons why Asia has long had an advantage in kind of Web3 gaming is that like there's definitely like just a different like cultural take on it. Like there's just more traditionally been more opposition to this idea of web three gaming in the US, like just like gamer community is just really not liking the idea of it, not liking the idea of introducing tokens or NFTs into gaming. And like that kind of attitude doesn't exist so much in Asia. Right. So I don't know. I mean, I don't know if we're starting to see a change in that on the on the US side, but that gives Asia a little bit more as a market like an advantage for just web free gaming where like people don't have that like negative association necessarily

with introducing an NFT is like ruining a game. You know? So I think. that's a really important thing. And then the other really important thing that happened last year, this isn't a crypto story, but I just think it's worth mentioning was that there was a major breakout Chinese game, black myth. So, you know, traditionally when we talk about, you know, again, not a crypto game, just sort of a game, but still, like, just worth noticing because when we talk about gaming in Asia, we tend to talk a lot about, like, Japan and Korea and, like, these are, like, you know, the big powerhouses. And China just, like, really kind of, like, broke out with, with a game, you know, and really kind of made a huge splash globally.

And that was like a really interesting, just something to pay attention to, you know, going forward in terms of like, you know, we're probably going to start seeing more interesting things happening from the Chinese gaming world. Yeah, maybe I'll just add to that. I absolutely agree with that. You know, when you think about sort of what crypto and Web3 does to gaming, it's a business model innovation. It does help the user, but it's great for business. And adoption comes from the business on model innovation, not from the fact that the user themselves will demand it per se. This is kind of what happened with play a sort of, you know, this is kind of what happened with, free-to-play. So free-to-play was widely rejected in the West. Nobody wanted that, right?

But who were the pioneers of this gaming method? It was Asia, right? They were doing, you know, massing multiplayer games. The World of Warcraft was doing subscriptions, old school, right? While everyone else was basically starting to move into this area, but drove more revenues that basically had a business model that sort of was more perpetual for more of higher value items over time. And as a result, became the superior business model, which therefore then caused all the other gaming companies around the world to say, you know what, I should do that, because that's actually a better business model. And that basically, in the West, in a way, forced free to play

when they were saying, hey, I just want to pay my $30, $40, and endlessly play, which essentially, you know, didn't work, right? So, again, I think a similar pattern is going to emerge anyway from east to west. All right. This has been such a great conversation. I know it's very late where Emily is. So we will wrap up. But where can people learn more about each of you and your work?

Yeah, I mean, you can go to our website, enumocobrands.com. Also, I tend to post a lot on X. My handle is YSRU. Once in a while, I manage to write a little bit of an essay on my medium under Yatsyu, but, you know, a lesson I like. But I do have fairly sort of more video content around what we do on Instagram, for instance, if you follow my account there as well and just follow the readings that I write on X. So I'm Emily D. Parker on X.

I haven't been posting there very often, but that's where I am. If you want to see my... And you could also find me on places like LinkedIn. And I do write about these things, and I speak publicly. So I definitely put these ideas out there once in a while. Great. Well, it's been a pleasure having you both on Unchained. Thank you.

Thank you. Thanks so much for joining us today to learn more about CryptoN Asia and Emily and Yat. Check out the show notes for this episode. Unchained is produced by me, Laura Shin. felt from Matt Pilcher, Wanda Vanovich, Megan Gapis, Pamma Shimdar, and Marker Curia. Thanks for listening.