CZ Says Crypto Firms Shouldn’t Need a New License in Every ASEAN Country

Binance’s Changpeng “CZ” Zhao voiced his support of a regional crypto licensing system that would make operating across ASEAN much easier for companies.

Companies could go through a simplified approval process instead of completing another licensing process each time they enter a new market. This would be while meeting each country’s local requirements.

The proposal is not official ASEAN policy yet. However, many in the crypto industry highlighted how much cost this would reduce. It would also encourage innovation in the region, making digital asset services easier to access in Southeast Asia.

CZ backs a simpler crypto licensing process

According to Wublockchain, during the “One ASEAN, One Digital Economy” fireside chat, CZ supported a proposal pitched by FinTech Alliance PH founding chair Lito Villanueva.

The proposal says that a crypto company that holds a license in one ASEAN country could apply for a simplified approval process in another member state instead of starting from the beginning.

Host regulators would still be able to review the application and impose local conditions if needed. But, at the very least, businesses would not have to repeat the licensing process every time they expanded into another country. CZ shared that the reason why these processes are repeated is mainly political.

“I think that’s mostly a political problem,” he said. He added that building technical systems is easier than getting different governments to agree on shared regulatory rules.

He also said allowing licensed companies to compete across the region could improve services while lowering costs for consumers.

Crypto institutions lately have had to comply with different licensing rules, capital requirements, cybersecurity standards, anti-money laundering checks, among others, in each country. This has been tagged “too expensive to maintain” by experts, especially for smaller companies just starting out.

ASEAN already has similar systems

The region already uses similar systems in traditional finance. For instance, the ASEAN Collective Investment Schemes Framework allows investment funds approved in one country. This makes it easier for any firm’s expansion in another nation.

Malaysia, Singapore, and Thailand launched the framework in 2014. The Philippines also joined in a later agreement between regional securities regulators.

ASEAN also has the ACMF Pass. This permits qualified investment advisers to get faster registration when working in participating markets without filing for a new license. This is basically what CZ is pushing for but for crypto firms.

The European Union recently made a step in that direction. The new Markets in Crypto-Assets (MiCA) rule allows crypto companies licensed in one EU member state to be able to expand into other member countries instead of getting yet another license. CZ’s Binance failed to get the license, though.

Different national rules remain the biggest hurdle

Each country in this region has its own rules for regulating digital assets. Some ned local incorporation, while others have different rules for custody, capital reserves, disclosures, and AML compliance.

Take a look at the Philippines, for instance. Binance and BlockShoals participated in an SEC sandbox. However, that did not replace the license needed by the Bangko Sentral ng Pilipinas for certain payment services.

The Philippine SEC later allowed BlockShoals to begin sandbox testing using Binance’s system. But the approval did not remove the need for separate central bank requirements.

This shows that even if ASEAN introduces passporting in the future, the local regulators will still have a major say in how operations will play out.

Source:: CZ Says Crypto Firms Shouldn’t Need a New License in Every ASEAN Country