Indonesia, Turkiye, Nigeria and Other Emerging Crypto Markets in 2024

Crypto regulation in the world continues to change rapidly. Financial authorities realize that banning cryptocurrencies does nothing and are changing their approaches. In addition to regions with developed crypto regulation (US, EU, UAE, LatAm, etc.), the situation is also changing in emerging markets in Asia and Africa. There is a strong demand for cryptocurrency transactions, and their volumes are extremely high.

In this article, I have gathered a few countries in Asia and Africa where regulations have improved this year: Turkiye, Indonesia, Thailand, Taiwan, Seychelles, Nigeria, and South Africa. I emphasize that these countries do not exhaust the list—there are certain movements in India, Kenya, the Philippines, and other major markets. But for now, the main developments are taking place in the countries listed below.

By the way, I have created a world map of crypto regulation. There are now over 140 countries, and you can always see the details there.

Turkiye

In June 2024, the Turkish Parliament adopted “Amendments on the Capital Markets Law” which form a new crypto regulations landscape in the country. The Capital Market Board of Turkiye (SPK) will manage Crypto Asset Service Providers (“CASP”). Already 76 firms are registered by SPK.

We can consider the adoption of this law positive for the industry. After the ban on crypto payments in Turkiye, there were concerns about possible restrictions on the operations of foreign exchanges. However, these concerns were not justified—the new law allows subsidiaries of foreign crypto exchanges to operate in the country, provided they open a subsidiary legal entity and undergo registration.

One more thing that is changing in Turkiye - new crypto tax initiatives will be postponed up to next year. However, the basic principle that probably will be implemented: gains from crypto assets will be taxed as intangible assets

Moreover, registered CASPs should transfer 2% of their annual revenue to SPK and Turkish digital agency TÜBİTAK. Adopting cryptocurrency regulation was one of FATF's 40 conditions to remove Turkey from the gray list where the country fell in 2021. And it worked - FATF removed Turkiye from the list this year, which is another positive factor for conducting operations in this country - despite certain risks.

South Africa

South Africa is the second crypto market in Africa. Last year, its regulator, the Financial Service Conduct Authority (FSCA), started licensing procedures for local crypto entities. This year, by 30 June, 138 companies had received the regulator’s approval. These are good numbers comparable to developed jurisdictions.

They indicate both the demand for operations in SA and the fact that the regulator treats applicants quite loyally - only 5 rejections of applications and about 200 are still under consideration.

However, local individuals are subject to tax control as part of new regulations. Licensed exchanges have already passed on user data to the South Africa Revenue Service (SARS), which sends out inquiries. In the statement published on 9th October, SARS noted that most taxpayers avoid declaring their crypto operations.

Thailand

The Kingdom of Thailand has taken a big step toward crypto this year by launching a local Bitcoin ETF. The new Prime Minister of Thailand Paetongtarn Shinawatra is pro-crypto as her predecessor Srettha Thavissin and has stated that “the government will continue its flagship digital wallet policy”.

Tough regulations modeled on Japan are gradually softening - evidenced by issuing a license to Binance through a local partner and Zipmex’s plans to issue the country's first crypto card. Recently, the Thai SEC presented new regulations allowing mutual and private funds to invest in crypto legally. Last but not least - Thailand's second-largest bank, Kasikornbank, will launch the first licensed crypto custodian in the country.

Seychelles

On September 1st, the VASP Act came into force in the Seychelles, which is a very popular offshore zone for crypto operations. The Seychelles were for a long time, an easy jurisdiction to set up a company for crypto operations.

Now, the regulatory regime of the island nation has moved closer to the Caymans and the British Virgin Islands. All cryptocurrency companies operating in the Seychelles must register as VASPs by December 31 this year.

It has also become mandatory for crypto companies to have a physical presence on the island. Among other things, companies must now:

• Have a physical office.
• Employ a minimum of two managers.
• Not engage in mining activities; mixers are also prohibited from operating.

The new law is likely to have a positive impact on crypto entities operating in the country as their activity will become more transparent. The adoption of legislation for the crypto business worldwide is inevitable.

Taiwan

Taiwan updated its rules for crypto entities this year. The FSC (local SEC) tightened AML requirements for the industry. Also, foreign exchanges operating in the region without a license will also be blocked.

In early October, the regulator introduced a new regime for VASPs operating in the country. Each crypto entity operating in Taiwan will have to register by September 2025, this is a long period - VASP operators will have a full year, which is a fairly comfortable deadline.

By the way, there has been an advancement along the line of dialog between regulators and businesses—the VASP association of Taiwan was established in the summer.

Indonesia

Indonesia will change the crypto regulator at the end of this year: in 2025, Bappetti (the local CFTC) will give these functions to OJK (the local SEC). This update can make virtual asset policy more certain. Besides, the current trend in Indonesia is to soften tight restrictions adopted in previous years, such as crypto transaction tax.

Also, more entities are getting licenses there—recently, Binance’s partner, Tokocrypto, was fully approved to operate in the country.

Moreover, the OJK has prepared a crypto sandbox regime for operating entities that will be implemented next year, called the Financial Sector Technological Innovation (“FSTI”) law. This legislation applies to the whole fintech sector including virtual assets. So, it is likely that next year, we will see more companies with approval from OJK after the procedure becomes more certain —so far, there are only three licensed entities now.

The OJK also plans to change regulations for crypto taxation in Indonesia, but it remains unclear what the regulator’s plans are exactly. Currently, crypto traders on local exchanges are obligated to pay income tax on transactions (0.01%) and VAT (0.11%).

The current approach to crypto regulation globally is to abolish VAT for cryptocurrency transactions, as the UAE did this month. That’s why VAT is likely to be abolished in Indonesia, but the value of income tax may increase.

Nigeria

Today, it is Africa's largest crypto market. High inflation in the country stimulates demand on crypto. Previously, authorities tried to ban the circulation of cryptocurrencies—this was the position of the Central Bank. This year, foreign exchanges, including Binance, were banned from operating in Nigeria. An employee of the latter, Tigran Gambaryan, is still under investigation.

However, a more sensible approach to regulation has prevailed again this year and is actively promoted by the local SEC. Two local exchanges Quidax and Busha have recently received licenses under new regulations - Accelerated Regulatory Incubation Program (ARIP). This regulatory regime also distinguishes other types of crypto entities: Digital Asset Custodian and Digital Asset Offereng Platform.

Five more crypto companies were licensed as these types of entity: Trovotech, Wrapped CBDC, Dream City Capital, Housing Exchange.NG and Blockvault Custodian.

Conclusion

The fact that even in markets with very conservative regulators there are moves towards legalizing cryptocurrency transactions can be assessed very positively. Of course, this trend is not very strong yet and more time is needed for the efforts of regulators and market participants in this direction to yield results.

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