Roundtable Discussion: Outlook on Cryptocurrency Regulatory Policies in South Korea, Malaysia, and Indonesia

Editor | Wu Says Blockchain

This article is based on the roundtable discussion “Asia's Crypto Frontier: Balancing Regulation and Compliance Growth” at the Finternet 2025 Asia Digital Finance Summit. The discussion was hosted by Angelina Kwan, Managing Director of Stratford Finance, and featured guests Wong Huei Ching, Director of Digital Financial Assets and Crypto Assets Regulation at the Financial Services Authority of Indonesia (OJK), Uli Agustina, Director of Digital Financial Assets and Crypto Assets Regulation at the Financial Services Authority of Indonesia, and Harry Kim, Chief Business Officer of Kintsugi Technologies in South Korea.

The Finternet 2025 Asia Digital Finance Summit will be held in Hong Kong on November 4, with the core concept of “Connecting Chains and Building the Future”. It is supported by more than 10 institutions, including OSL Group, the Hong Kong Invest Hong Kong, the Hong Kong Financial Development Council, and the Hong Kong Cyberport.

Audio transcription is done by GPT and may contain errors. The views of the guests do not represent Wu's views. Readers should strictly adhere to the laws and regulations of their location. Please watch the full content on YT:

Asia's regulation is at the forefront, promoting the standardized development of the crypto market.

Guan Hui: I just returned from the Korea Blockchain Week, and the enthusiasm there was shocking. During the event, the Korea Exchange was also being urged by various parties to quickly launch ETPs (Exchange-Traded Products), and everyone was saying, “Hong Kong is already ahead,” putting a lot of pressure on them. Now that Korea has a new president, they are rapidly promoting the Digital Asset Basic Act (DABA), and we see the relevant regulations gradually taking shape. Harry, can you talk about the current regulatory progress in Korea and how Hong Kong might be involved?

Harry: South Korea indeed has a very active cryptocurrency retail market, and the new president has included digital assets in the national digital financial innovation plan. We are also promoting a re-legal definition of “digital assets,” which was originally called “virtual assets,” now transitioning to “digital assets” to more clearly regulate and supervise.

Currently, regulation is entering its second phase, which will cover not only exchanges but also custodians, stablecoins, advisors, marketing, and other participants. Although the regulations have not yet been formally passed, the direction is clear: to establish a more comprehensive and detailed regulatory system to protect user interests and promote the standardized development of the market.

In South Korea, promoting or amending new laws usually requires a long period: first, there is about a year of review, followed by a trial period of a year, and only then will it be officially implemented. So the whole process typically takes one to two years.

Guan Hui: That also means that Hong Kong still has time to maintain its lead, which is a good thing. For friends who hope to expand from Hong Kong to South Korea, now may be the opportunity window.

However, I believe that South Korea's infrastructure is not yet fully developed. Hong Kong already has licensed exchanges that can support the structuring of products and the launch of ETPs, in which we are already far ahead. If South Korea wants to launch ETPs now, they still need to establish a complete support system.

While communicating with several guests in Korea, we also assessed that the Korea Exchange (KRX) is likely to launch ETPs within a year. I believe that the Korean regulatory authorities will accelerate their pace this time, and we must not slack off.

The evolution of cryptocurrency regulation in Malaysia since 2019

Guan Hui: Dr. Wong, could you introduce the recent developments in Malaysia's regulatory mechanisms?

Wong: Malaysia has incorporated cryptocurrency assets into its securities regulatory framework as early as 2019. Over the past five to six years, we have gained a thorough understanding of locally registered exchanges and have built confidence in them. Therefore, this year we conducted a phased assessment of the market and found that cryptocurrency assets have gradually become part of investment portfolios, while the demand for more complex products is also on the rise.

We have decided to upgrade the regulatory guidelines, which are expected to be released early next year. The new regulations will grant exchanges more autonomy, no longer having regulatory agencies intervene in a “nannying” manner. Exchanges can independently decide to list token products based on their own governance mechanisms.

Of course, delegating authority means greater responsibility. We require exchanges to strengthen internal controls in terms of investor protection, including wallet custody arrangements, capital requirements, and so on. The overall goal is to promote institutionalization of the market, attract more large financial institutions to enter, and enhance the credibility of crypto assets within the banking system.

To this end, we have held meetings with the central bank to facilitate in-depth dialogues between the compliance teams of traditional banks and crypto platforms, addressing the gaps in trust and understanding.

Currently, there are 21 institutions active in the cryptocurrency ecosystem in Malaysia, covering cryptocurrency funds, derivatives, trading platforms, and upcoming brokerage services. We also allow local brokerages to connect to global liquidity pools to provide better prices for clients.

Another focus is asset tokenization. We hope to bring the advantages of the crypto market into traditional capital markets, so we are formulating relevant regulatory guidelines to clarify the responsibilities of issuers and intermediaries, and promote the standardized development of the industry. Last year, the industry was almost indifferent to this topic, but this year the response has been enthusiastic, with even the central bank releasing discussion documents, showing a strong consensus.

In this regard, we have established a sandbox mechanism to promote the full-process pilot from asset tokenization to payment settlement, further exploring innovative financial applications.

Guan Hui: Although this may not fully fall under your regulatory responsibilities, I would like to understand the movements of Bank Negara Malaysia regarding stablecoins. Stablecoins are currently a hot topic in the market, especially in asset tokenization, where they could become a major payment tool. Are you working with the central bank to develop a regulatory framework for stablecoins? Additionally, there are some unlicensed stablecoin products in the market, which pose both risks and payment opportunities. What is your view on the situation in Malaysia?

Wong: We have had extensive discussions with the central bank and other regulatory agencies regarding stablecoins. Overall, the central bank supports the development of stablecoins, especially those pegged to the Malaysian Ringgit (MYR) as the anchor asset.

A few months ago, the central bank launched a sandbox mechanism, welcoming companies to submit real application cases to test the stablecoin supported by MYR. I have also been encouraging participants in the capital markets and the crypto space to actively explore this direction.

We believe that if we can prove that the MYR stablecoin has real market demand, discussions about promoting other foreign currency stablecoins will be smoother in the future. Ultimately, the key is — — whether there is actual utility.

Reform of Indonesia's Regulatory System: Regulation of Crypto Assets Transferred to OJK

Guan Hui: The digital asset market in Indonesia has rapidly grown, and the ecosystem is very active. Could you share with everyone the reasons for the rapid development of the Indonesian market, as well as some of your core regulatory strategies in promoting the compliant development of the cryptocurrency industry?

Uli: These developments cannot be separated from the strong support of the government. According to Indonesia's recent financial stability reforms, crypto assets have been officially classified as financial assets. We are also in a critical transition period of regulatory authority — transferring the oversight of crypto exchanges and related ecosystems from the Ministry of Trade to the OJK for unified regulation, allowing crypto businesses to be regulated alongside other financial services.

We focus on building a stable and compliant market environment, strengthening risk governance and consumer protection mechanisms. Indonesia's ecosystem has its local characteristics: we have a regulatory committee, a classification system, and a clearing institution responsible for the clearing and settlement of cryptocurrency transactions.

We promote the integration of the banking system with cryptocurrency transactions, for example, all transactions must go through banks. At the same time, we have established official custodians, requiring 70% of user assets or wallets to be held here to ensure asset security. Although not all platforms can meet this requirement at the beginning, we are pushing them to gradually meet the standards and enhance market trust.

We also released a series of new regulations aimed at making crypto assets not just speculative tools, but truly participating in the national digital economy. For example, a project tested in the sandbox uses Blockchain technology to record data on Java dairy cattle farming, establishing credit for farmers who previously could not obtain loans, thus securing financing. Such projects have already connected with banks, helping them transition from “unloanable” to “loanable.”

We are also promoting tokenization projects for assets such as real estate, games, and IP, and we expect these innovations to be implemented gradually. As regulators, we strictly review the platform's capital and governance structure, and we look forward to them not only participating in secondary market trading in the future but also playing a role in ICOs or IPOs.

Guan Hui: Have you encountered any challenges when regulating these companies? How did you respond to them?

Uli: Of course, especially in terms of cybersecurity. There have been some major incidents that exposed the weaknesses in the infrastructure. To address this, we have collaborated with multiple departments, not just OJK acting independently. We are investing resources in education and capacity building, and we are working with Universitas Indonesia to train Blockchain engineering technical talents.

In terms of the system, we have incorporated cybersecurity into the overall regulatory framework and established an emergency response mechanism. We collaborate with the central bank to conduct joint reviews and audits of transactions involving banks and payment gateways to ensure the system is free of vulnerabilities. In the event of a security incident, we can also respond quickly to minimize the impact.

Perpetual Contracts and ETPs: Compliant Exchanges Accelerate Entry

Guan Hui: We now see a clear trend where traditional finance in various countries is actively laying out its plans in the field of crypto assets. I just attended a conference where the head of a licensed exchange in Southeast Asia announced the launch of perpetual contracts (Perps), which are futures contracts for digital assets listed on compliant exchanges.

Not only are regulators pushing forward, but traditional exchanges are also quickly entering the market. For example, the Korea Exchange (KRX) recently held a meeting that lasted five to six hours, specifically discussing how to launch ETPs (Exchange-Traded Products) in traditional exchanges in the future. This indicates that regulatory agencies and market forces are accelerating their convergence, promoting the cryptocurrency market towards compliance and institutionalization.

Harry, South Korea has strong cultural assets, such as idol groups like BlackPink. KRX now wants to tokenize these cultural IPs. What do you think of this trend? Are there any related explorations on cultural asset tokenization in Indonesia and Malaysia?

Harry: Yes, South Korea is opening up the tokenization market, but the legal foundation is still not完善. First, there is the tax issue — currently, South Korea does not have a clear tax framework and lacks regulations for the trading and management of crypto assets. If it is unclear how to tax, it is difficult for companies to conduct business with peace of mind.

Guan Hui: There are no taxes in this regard in Hong Kong.

Harry: Unfortunately, South Korea will soon start taxing, with an expected tax rate of 20% to 25%, to be implemented as early as next year. Clarifying tax obligations will be the first step in driving market development, making clear the tax responsibilities of individuals and businesses regarding crypto assets.

The second step is legislation. Currently, the Basic Act on Digital Assets is under review, which includes provisions for custody mechanisms. Custody and wallet security are very critical aspects. The regulatory framework for exchanges has been completed, and after these laws are implemented, KRX can officially launch larger-scale tokenization projects.

Malaysia 2026 Outlook: Promoting More Tokenized Products and Large Institutional Participation

Guan Hui: Please share your expectations for 2026. What developments do you hope to achieve or promote in your domestic market?

Wong: I expect more products to be launched in the short to medium term, not limited to tokens listed on exchanges. We have received positive feedback from many traditional financial institutions, including brokerages and fund managers, who are actively preparing for the issuance of tokenized or crypto-related products, which is a direction we are very much looking forward to next year.

We also expect more large institutions to enter the Malaysian market, and several have already taken the initiative to reach out. Additionally, in terms of asset tokenization, we are collaborating with the national sovereign wealth fund Khazanah to promote its bond tokenization project, which is expected to launch next year. We are also in discussions for some public-private partnership projects, and although we are still in the dialogue stage, the progress is optimistic.

Guan Hui: You are still the first country in Asia to issue a compliant custody license, which is very advanced.

Wong: Yes, we have indeed established a regulatory framework for digital asset custodians, and three licenses have been issued so far. We are also collaborating with local banks to promote their entry into the custody business. Overall feedback has been very positive, and many banks are formulating relevant plans. We believe that custodial services will further support the development of the cryptocurrency and tokenization market in Malaysia.

Indonesia 2026 Outlook: Derivatives Regulatory Reform and Innovation Sandbox Accelerates Implementation

Guan Hui: What are the key plans for Indonesia next year? What new goals are there in terms of products and services?

Uli: We plan to comprehensively improve the operational level of the exchange by 2026, expecting to introduce new regulatory requirements that focus on strengthening the risk governance and investor protection mechanisms of the exchange, enhancing the stability and sustainability of the market.

Next year, we will further promote the regulatory framework for derivatives trading. Currently, this part is regulated by commodity trading institutions. We hope to incorporate it into a unified platform and regulatory system consistent with crypto assets to achieve integrated management.

In terms of innovation, we will accelerate the implementation of multiple projects under the regulatory sandbox mechanism, with several projects already entering the evaluation stage and expected to be officially launched next year. Tokenization of real estate, gold, and government bonds are all key directions that we are focusing on.

Our overall goal is to establish the digital economy as an important pillar of the national economy. Therefore, we will further strengthen the connection with the traditional financial system, including key links such as banks, payment gateways, and custodians. At the same time, we also encourage more token issuance (ICO) projects to enter the market.

In terms of the basic system, we will strengthen financial reporting and assessment capabilities. A notice on the accounting treatment of crypto assets has been published, and we hope to gradually align with international accounting standards in the future.

Finally, in terms of anti-money laundering, we plan to strengthen cooperation with neighboring countries to prevent regulatory arbitrage, especially when wallets are stolen or funds are transferred across borders, to establish a more effective regional linkage mechanism and enhance our rapid response capability to cybersecurity incidents.