- IOTA supports Asia’s shift to risk-based crypto regulations that balance innovation, privacy, and user protection.
- The foundation urges clear oversight, tiered access, and privacy-preserving compliance to foster trustworthy digital asset markets.
Asia is increasingly embracing risk-based crypto regulations that encourage innovation while addressing potential financial risks. The IOTA Foundation has actively supported these moves, advocating for privacy-focused compliance, smarter oversight, and fair access across multiple regions.
Hong Kong Pioneers Stablecoin Licensing with Privacy Concerns
In June 2025, Hong Kong introduced the Stablecoin Issuers Ordinance, establishing a licensing regime for fiat-referenced stablecoins along with AML/CFT guidelines. These proposals included counterparty verification for all wallet-to-wallet transfers, even self-hosted wallets, to ensure traceability.
While IOTA praised Hong Kong’s push for clear rules, it expressed concerns about applying the full Travel Rule to self-hosted wallets. Instead, the foundation proposed a tokenised KYC-proof model using verifiable credentials. This approach enables regulators to verify compliance without exposing personal data, balancing privacy and oversight with blockchain analytics and interoperable tools.
Thailand Allows Utility Tokens Under Strict Oversight
Thailand’s SEC moved to end the full ban on Conflict-of-Interest (COI) tokens in July 2025. Draft rules now allow trading under strict conditions, requiring transparency, open disclosure of connections, and strong oversight to prevent misuse.
IOTA supported this shift, emphasizing that utility tokens can reduce costs or grant access to specific features while protecting users. The foundation highlighted that clear supervision and transparency are more effective than blanket bans and help exchanges remain competitive on a global scale.
Malaysia and South Korea Encourage Innovation with Smarter Rules
Malaysia’s Securities Commission proposed updates in August 2025 that would let exchanges list tokens without prior approval while enforcing tougher operational standards. IOTA backed the reforms but cautioned against broad restrictions on utility and new tokens. The foundation recommended stronger post-sale monitoring, tiered capital systems, and risk-based supervision to avoid slowing innovation.
Meanwhile, South Korea plans to extend venture-business benefits to companies working with virtual assets. IOTA welcomed this initiative, noting that legal recognition will help crypto firms attract investment and expand blockchain use in sectors like AI, DeFi, and supply chains.
IOTA’s Vision for a Balanced Regulatory Future
The IOTA Foundation remains committed to supporting seamless, privacy-preserving solutions that align innovation with compliance. By advocating for clear, risk-based rules, the foundation aims to foster trustworthy and transformative digital asset markets across Asia.
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