This chapter presents key developments in crypto-asset markets across Asia, highlighting growing participation of both institutional and retail investors, as well as the importance of stablecoins. It examines major risks related to increasing interconnectedness between crypto-asset and traditional financial markets, financial consumer protection, illicit financing, and cyber-threats. The chapter also reviews recent policy initiatives and regulatory developments across Asia and concludes with policy considerations to support responsible innovation, consumer protection and resilient financial markets.
Asia Capital Markets Report 2026
Abstract
Crypto-asset markets have grown rapidly in the past decade, with stablecoins playing an increasingly important role. Markets peaked at USD 4.4 trillion in market capitalisation in October 2025, although falling back to around USD 2.6 trillion in April 2026.
While stablecoins represent only 10% of the overall crypto-asset market capitalisation, they are increasingly used to facilitate trading, lending and borrowing, as well as to support transactions and liquidity provision within decentralised finance. Use cases are also emerging in remittances and currency exchange, especially in jurisdictions with tighter capital controls.
Asia has emerged as a major global hub for crypto-asset activity, although with diverging adoption levels across jurisdictions. The region1 saw a 69% year-on-year growth rate in blockchain-based crypto-asset transactions between June 2024 and June 2025, the highest among all regions. India and Korea have seen large financial inflows, while Viet Nam stands out with financial inflows worth 55% of GDP in the same period.
The growing interconnectedness between crypto-asset and traditional financial markets creates risks of contagion. These risks stem from the price volatility and limited transparency of crypto-assets, as well as potential liquidity mismatches, weak or opaque governance, and uncertainty over the quality, liquidity and disclosure of reserve assets backing stablecoins. Further risks to monetary sovereignty, capital flow management and macroeconomic stability may materialise if crypto-asset markets continue to grow.
Financial consumer protection remains critical to ensure safe retail investor participation and avoid consumer harm. In past downturns, retail investors across Asia have born a disproportionate share of losses. Previous lack of regulatory oversight left many of these investors deprived of basic investor protections. Scams and fraud are also a significant risk in these markets, in line with broader trends across the financial services sector.
The misuse of crypto-assets as a channel for illicit finance is growing, reaching an estimated USD 154 billion in 2025. Stablecoins are emerging as a preferred medium for sanctions evasion, with approximately USD 180 billion in value received by sanctioned entities and jurisdictions between 2020 and 2025. A major concern relates to the increasingly sophisticated and professionalised networks involved, including state-linked actors.
Crypto-asset markets also face cyber-security threats. Over the past decade, cyber-attacks have caused approximately USD 16.5 billion in losses, with hackers targeting wallet-holders, exchanges and service providers.
Many Asian jurisdictions have consolidated their policy stances and regulatory frameworks, with diverging approaches taken. Some jurisdictions have maintained a restrictive stance on crypto-asset activity, while others have formalised their policy frameworks either by establishing crypto-asset regulations for the first time, or by revising existing regulations to support orderly market activity.
Policymakers may consider encouraging stronger governance measures across the crypto-asset industry, while maintaining a robust supervisory framework in line with global standards (e.g. FSB Principles, IOSCO recommendations).
Continued efforts are also needed to ensure robust financial consumer protection, including through financial literacy strategies for retail investors.
International co-operation remains crucial to combat crypto-assets misuse for illicit finance, and persistent cyber-threats. This requires coordinated action across financial authorities, cybersecurity agencies and the industry at the national, regional and global level.
Crypto-asset markets, made up of crypto-assets and stablecoins,2 are growing rapidly worldwide, and are increasingly interlinked with traditional financial markets. This includes a growing participation by institutional investors, and the increasing institutionalisation of digital assets via various channels such as crypto-asset related derivatives markets and exchange-traded funds (OECD, 2022[1]).
Asia as a region is particularly active (Auer, Lewrick and Paulick, 2025[2]), driven by retail investor demand and growing institutional investor participation (Chainalysis, 2025[3]; OECD, 2024[4]). Crypto-asset markets present opportunities, such as portfolio diversification, financial inclusion and larger cross‑border financial flows. However, these innovative assets also pose risks relating to consumer protection and integrity that could affect market stability.
Globally, crypto-asset markets have grown since 2021, reaching a market capitalisation of USD 4.4 trillion in October 2025 (Figure 5.1). This marked a high point, with markets following a gradual downward trend through the end of 2025 to reach USD 3 trillion at the start of 2026. Further devaluation continued through April 2026, with market capitalisation dropping to USD 2.6 trillion on 21 April 2026.
Asia is playing an increasingly important role in global crypto-asset markets, with a growth rate of 69% year-on-year in blockchain-based crypto-asset transactions as of June 2025 – the highest growth rate across all regions (Panel B). This reflects various factors, including the high adoption rate of some populous Asian jurisdictions, with India, Indonesia, Viet Nam, the Philippines and Pakistan being five of the ten top crypto adopting countries in 2024 (Chainalysis, 2025[5]; Ratha et al., 2023[6]). Demographic factors also play a role, particularly in the ASEAN region, which combines a rapidly growing internet user base with a young, tech‑savvy population, many of whom are eager to participate in decentralised finance markets (OECD, 2024[4]).
Crypto-asset markets have grown rapidly in the past decade, with Asia experiencing the highest growth rate in 2025
Note: Panel A shows the total market capitalisation of 16 536 crypto-assets across 1 473 exchanges, encompassing most of the value and volume of active crypto-assets publicly listed and traded. Values are adjusted using the average annual consumer price index, in 2025 prices. Panel B show inflows into blockchain-based crypto-assets. In the Panel, “Africa” refers to Sub-Saharan Africa, and “Asia-Pacific” includes the following jurisdictions: Afghanistan, Australia, Bangladesh, Brunei Darussalam, Cambodia, China, Hong Kong (China), India, Indonesia, Japan, Kazakhstan, Korea, Kyrgyzstan, Lao PDR, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, Uzbekistan and Viet Nam.
Source: CoinGecko (2026[7]), Crypto Market Cap Charts, https://www.coingecko.com/en/charts. Accessed 21 April 2026; Chainalysis (2025[3]), The 2025 Geography of Crypto Report, https://www.chainalysis.com/wp-content/uploads/2025/10/the-2025-geography-of-crypto-report-release.pdf.
Financial inflows to crypto-assets vary significantly across jurisdictions, with India and Korea receiving the largest absolute flows in the twelve months to June 2025, followed by Viet Nam and Indonesia (Panel B). When scaling financial inflows to crypto‑assets as a share of GDP, Viet Nam led the region at almost 50%, followed by Cambodia and Pakistan (28% and 26% respectively). In Viet Nam, this reflects significant crypto penetration in a relatively small economy (Yokoyama et al., 2025[8]; PwC, 2025[9]), with previous analysis showing that Viet Nam received the largest crypto-asset inflows of any ASEAN economy during the 2020-2022 period, worth over 55% of GDP (OECD, 2024[10]). In Cambodia, the high ratio is amplified by a smaller GDP base and a long‑standing reliance on foreign‑currency and digital channels for transfers and payments (Duma, 2014[11]; UNESCAP, 2021[12]; Ratha et al., 2023[6]). Pakistan shows a comparable pattern, where significant cross‑border inflows and limited formal financial intermediation have coincided with sizeable crypto‑asset activity when measured against GDP (Yokoyama et al., 2025[8]; Ratha et al., 2023[6]).
India and Korea have seen the largest inflows, while Viet Nam leads the region when scaled for GDP
Note: Figure shows inflows into blockchain-based crypto-assets. Values cover June 2024-June 2025. The share of GDP is based on 2025 GDP figures, where available. For Cambodia and Sri Lanka, GDP values correspond to 2024.
Source: Chainalysis (2025[3]), The 2025 Geography of Crypto Report, https://www.chainalysis.com/wp-content/uploads/2025/10/the-2025-geography-of-crypto-report-release.pdf; Chainalysis (2025[5]), The 2025 Global Adoption Index, https://www.chainalysis.com/blog/2025-global-crypto-adoption-index/; IMF (2026[13]), GDP (Current Prices), World Economic Outlook, https://www.imf.org/external/datamapper/ NGDPD@WEO/OEMDC/ADVEC/WEOWORLD .
Stablecoins are an increasingly important class of crypto‑assets. The total market capitalisation for the five largest stablecoins reached nearly USD 300 billion on 25 March 2026 (Figure 5.3, Panel A). While this only represents around 10% of the market capitalisation of all crypto‑assets, the value of the top five stablecoins grew by 48% in 2025, from USD 200 billion on 1 January to USD 297 billion on 31 December.
Asia has recorded some of the fastest growth rates in crypto‑asset adoption globally, with stablecoins increasingly present (FSB, 2023[14]). In particular, Asia stands out with a share of around 30% of global stablecoin trading activity in 2025 (Panel B). Stablecoins play a particularly prominent role in the ASEAN region, accounting for at least 50% of total crypto‑asset flows between 2020 and 2022, with that share increasing significantly following the 2022 market downturn (OECD, 2024[4]).
Stablecoins have become a major crypto-asset class, with high levels of activity in Asia
Note: Panel A shows market capitalisation for the top 5 stablecoins for the period 1 January 2019 to 25 March 2026. Analysis is based on all stablecoins and filtered to the top 5 as of 25 March 2026. Market capitalisation of each stablecoin covers issuance across all major blockchains. Values are adjusted using the average annual consumer price index, in 2025 prices. Panel B dataset sourced from CoinDesk Research's timezone-based stablecoin flows model. Data covers transactions from July 2024 to June 2025.
Source: CoinGecko (2025[15]), Stablecoins by Market Capitalization, https://www.coingecko.com/en/categories/stablecoins; CoinDesk (2026[16]), The Definitive Stablecoin Landscape Series: North America, https://www.coindesk.com/research/the-definitive-stablecoin-landscape-series-north-america; Chainalysis (2025[3]), The 2025 Geography of Crypto Report, https://www.chainalysis.com/wp-content/uploads/2025/10/the-2025-geography-of-crypto-report-release.pdf.
Stablecoins have been used across crypto‑asset markets to facilitate trading, lending and borrowing, as well as to support transactions and liquidity provision within decentralised finance (OECD, 2024[4]). A notable use of stablecoins where they could improve efficiency is as an alternative remittance channel, in part due to their lower price volatility compared to other crypto-assets. Remittance volumes to Asian jurisdictions are high: India, China, the Philippines, Pakistan and Bangladesh were among the top global remittance receivers in 2023 (Ratha et al., 2023[6]). Stablecoins could lower the cost of remittances, as evidenced by the fact that corridors with higher costs are better suited to stablecoins, particularly Tether, replacing traditional channels. (Auer, Lewrick and Paulick, 2025[2]). Stablecoins may also be used by some as a hedge against domestic currency volatility in emerging market economies (OECD, 2024[4]), and as a bridge from fiat money to crypto-assets (OECD, 2022[1]). In addition, stablecoins have lower price volatility compared to other crypto-assets, making them better suited for such purposes.
This box provides updated data on AI-related activity in Asia, highlighting developments since the 2025 Asia Capital Markets Report (OECD, 2025[17]), the report Artificial intelligence in Asia's financial sector (OECD, 2025[18]), and the report Mobilising ASEAN Capital Markets for Sustainable Growth (OECD, 2024[19]).
AI-related activity intensified in 2025 and early-2026, with China continuing to dominate regional VC investment
Note: Panel A and B show monthly total values of transactions. In Panel A, “Others” includes Bangladesh, Chinese Taipei, Hong Kong (China), India, Indonesia, Korea, Malaysia, Mongolia, Pakistan, Philippines, Thailand and Viet Nam; and deal amount excludes semiconductors. In Panel B, “Others” includes Chinese Taipei, Hong Kong (China), India, Malaysia, Singapore and Thailand. In Panel C and Panel D, AI-related start-ups are defined as a private company that conducts research and delivers all or part of an AI system, or products and services that rely significantly on AI systems. The figure covers start-ups in the financial and insurance services sector. Panel C includes the annual total values for all economies shown in panel D, adjusted for inflation. Data downloads provide a snapshot in time. Caution is advised when comparing different versions of the data.
Source: OECD (2025[18]), Artificial intelligence in Asia's financial sector: A review of country policies, http://www.doi.org/10.1787/3385bbd8-en. LSEG; OECD.AI (2026[20]), The OECD Artificial Intelligence Policy Observatory, https://oecd.ai/en/. Data from Preqin, last updated 2026-01-05, accessed on 2026-03-24; publicly available sources.
AI adoption is accelerating across the region’s financial sector, although the depth and level of maturity vary significantly between markets. Deployment is most advanced in banking, but is also expanding to securities firms, asset managers, insurance companies and FinTechs. Lending remains the most widespread application, followed by use cases in client onboarding and mobile banking.
Overall investments in AI-related startups operating in the financial and insurance sectors softened in 2025, although the number of investments increased slightly compared to 2024 (Panel C). In the period 2012-2025, China continues to dominate VC investments the region with a total of USD 16.6 billion (Panel D), followed by India (USD 4.8 billion) and Singapore (USD 2.6 billion).
Crypto-assets present a wide range of applications and benefits, both materialised and theoretical (OECD, 2020[21]; 2025[22]). Some of these benefits relate to distributed ledger technologies such as blockchain, the infrastructure through which crypto-asset tokens are issued and traded. They include the potential for automation and greater efficiency in financial transactions. Smart contracts enabled by blockchain infrastructures can enable faster, more automated, and potentially less costly transactions and streamline processes such as issuance, corporate actions and post trade activities.
Nevertheless, crypto-assets present significant risks that, if not addressed, may affect the functioning of traditional financial markets, alongside significant impacts for individuals and the real economy. This section focuses on challenges relating to spillovers to traditional financial markets, financial consumer protection, the misuse of crypto-assets for illicit finance, and growing cyber-security threats against wallet holders, exchanges and other service providers.
5.2.1. Growing interconnectedness between crypto-asset and traditional financial markets
The value of stablecoins is linked to the traditional assets used as reserves to back them, mainly short-debt instruments. This increases the interconnectedness between traditional and decentralised finance, ultimately raising the risk of spillover to the real economy (OECD, 2022[1]). This is particularly pronounced for stablecoins, which connect the two markets but also have structural weaknesses stemming from the high degree of issuer concentration, lack of reserve transparency, uneven quality of backing assets, and limited holder redemption rights in some jurisdictions. Liquidations of major stablecoin reserves could trigger spillovers into debt markets and money market funds (OECD, 2022[1]).
Moreover, risks of spillovers and contagion could amplify during periods of stress (FSB, 2022[23]). Such risks stem from both unbacked crypto-assets due to extreme price volatility and limited transparency, and from stablecoins due to potential liquidity mismatches, weak or opaque governance, and uncertainty over the quality, liquidity and disclosure of reserve assets. Shortcomings in market integrity and investor protection across crypto-asset markets include risks from vertically integrated crypto‑asset service providers, weak governance, inadequate disclosures and fragmented cross‑border trading structures (IOSCO, 2023[24]).
For Asian emerging markets and developing economies, additional concerns arise from foreign currency‑pegged stablecoins, including risks to monetary sovereignty, capital flow management and macroeconomic stability (FSB, 2024[25]). Exchange rates obtained from stablecoin transactions already differ substantially from official US dollar rates, highlighting foreign exchange risks in some Asian EMDEs (Aldasoro, Frost and Ito, 2026[26]).
5.2.2. Financial consumer protection challenges
Crypto-assets may pose risks to financial consumers, stemming from such as high price volatility and gaps in the applicability of standard consumer protection provisions in some jurisdictions (OECD, 2025[27]). Consumer risks can be amplified by information asymmetries, self‑directed usage, behavioural biases, and uneven regulatory coverage across jurisdictions (OECD, forthcoming[28]). These risks may be particularly pronounced for individuals with low levels of digital financial literacy and limited financial resilience.
Results from the OECD/INFE 2023 International Survey of Adult Financial Literacy indicate rising retail participation in crypto‑asset markets, with investors tending to be younger and less experienced than users of traditional financial instruments. The results also suggest that current levels of digital financial literacy remain insufficient to support informed and responsible use of crypto‑assets. For example, only 55% of holders of crypto-assets understood that crypto-assets are not legal tender in their jurisdiction (OECD, 2023[29]).
The range of risks that crypto-assets may pose to financial consumers is clear from the 2022-2023 crypto-asset downturn (OECD, 2022[30]). The downturn in major crypto-asset valuations triggered a wave of crypto-asset firm failures and a broader market sell-off, exposing significant consumer protection gaps. Asia was at the centre of the downturn, exposing severe financial consumer protection gaps in the region (OECD, 2024[4]). Retail investors bore a disproportionate share of losses, while large holders and insiders reportedly managed to limit their exposure. Operating largely outside existing regulatory frameworks, many crypto-asset platforms deprived users of basic investor protections, such as disclosure requirements, conduct standards, and compensation mechanisms, leaving retail participants unable to adequately assess the risks of their investments (OECD, 2024[4]).
In ASEAN jurisdictions, crypto‑assets and stablecoins have been found to frequently replicate or even intensify existing consumer vulnerabilities (OECD, 2024[4]). Retail engagement has been driven primarily by speculative dynamics and fear of missing out, rather than by underlying practical use cases. At the same time, retail participation in decentralised finance remains constrained by its complexity, opacity and largely unregulated, non-custodial nature. While more user-friendly access points have emerged, these markets continue to involve sophisticated and often leveraged strategies that are not well suited to less experienced or non-technical retail users.
Consumer damage linked to crypto‑assets is already significant (OECD, 2026[31]). As Asia plays an increasingly prominent role in global crypto‑asset markets, alongside rising retail participation, financial consumer protection risks have become even more pronounced. In this context, digital financial literacy is essential to equip individuals with the knowledge, skills and behaviours needed to navigate both the use of crypto‑assets and their associated risks (OECD, 2025[27]).
The increasing use of crypto-assets for fraud and scams makes financial consumer protection all the more important. Inflows to crypto-assets linked to fraud shops and scamming activity totalled USD 69 billion in 2020-2025, the second largest illicit activity after sanctions evasion (Figure 5.5,Panel A). A prominent case was the seizure by the United States and United Kingdom of USD 15 billion in Bitcoin held by a Cambodia-based financial group engaged in fraud, scam, money-laundering and other criminal activities (US Treasury, 2025[32]).
The challenges relating to scamming across retail crypto-asset markets (which includes phishing and other deceptive practices) fit into the broader trend of financial scams and frauds. A recent OECD report found that 41 out of 60 jurisdictions experienced an increase in financial scams and frauds in 2025 compared to 2024 (OECD, 2026[31]). Eighty-five per cent of jurisdictions identified scams and frauds as one of the top three risks financial consumers face.
5.2.3. Illicit finance risks
Crypto-assets are vulnerable to misuse for illicit financing purposes. Such misuse is on the rise and reached USD 154 billion in 2025 (Figure 5.5, Panel A). A major concern relates to increasingly sophisticated and professionalised networks that carry out these activities, including by state-linked actors.
A growing trend in illicit finance is sanctions evasion by state-linked actors. Financial inflows into crypto-assets by sanctioned entities and jurisdictions surged by nearly 700% in 2025, compared to 2024 (Chainalysis, 2026[33]). Between 2020 and 2025, the value of inflows into crypto-assets by sanctioned entities and jurisdictions is estimated at USD 181 billion. Stablecoins have notably emerged in recent years as a major type of crypto-asset for illicit financing, making up 84% of its total in 2025 (Panel B). This may reflect stablecoins’ usefulness in facilitating cross-border financial flows with pseudonymous anonymity. Some sanctioned financial entities have issued stablecoins to evade sanctions and make cross-border payments that circumvent traditional payment rails.
Other illicit finance risks include unauthorised crypto-asset mining activity. These can carry economic, as well as environmental impacts depending on the type of distributed ledger technology (DLT) consensus mechanism used. A national utility company in Malaysia has reported losses of USD 1 billion between 2020 and August 2025, linked to illegal power usage by crypto-asset miners, with almost 14 000 suspected mining sites across the country (Hutt, 2025[34]). This in part reflects Malaysia’s relatively high level of domestic crypto-asset mining activity, with the country’s share of global Bitcoin mining ranging between 2-5% from late-2019 to early-2022 (CCAF, 2022[35]; OECD, 2024[4]). Data gaps in the amount and location of crypto-asset mining remains a major challenge, in part because some miners mask their presence to avoid detection (OECD, 2024[4]). Illegal Bitcoin mining also contributes to environmental harm given the intensive energy needs and related carbon emissions of the proof-of-work DLT consensus mechanism used by the Bitcoin blockchain (OECD, 2022[36]).
Crypto-asset related sanctions evasion expanded in 2025, with stablecoins a major channel
Note: In Panel A, “Others” includes the following categories: FTX creditor claims, special measures, terrorist financing, malware, illicit actors and organisations, escort services, drug vendors, darknet markets, child abuse material and money laundering networks.
Source: Chainalysis (2026[33]), The 2026 Crypto Crime Report, https://www.chainalysis.com/wp-content/uploads/2026/03/the-2026-crypto-crime-report-3-17-release.pdf
5.2.4. Cybersecurity threats
Another major challenge for crypto-asset markets relates to cyber-security. Recent years have seen a series of attacks against crypto-asset exchanges and wallet-holders, with losses totalling 18.6 billion (Figure 5.6, Panel A). When breaking down the types of cyber-attacks by total value of losses in the 2016-2026 period, the most common techniques are compromised private keys and wallet phishing (Panel B). These two types of cyber-attacks led to total losses of over USD 9 billion during this period. This points to increasingly complex targeting of crypto-asset holders, in some cases leveraging AI (Chainalysis, 2022[37]).
Theft of crypto-assets and attacks against exchanges remain a major source of risk
Note: Panel A shows the total annual losses adjusted for inflation. Panel B groups different types of hacking techniques causing compromised private keys, namely brute force, social engineering and other unknown techniques. The values encompass the losses from 2016 to 2026, in nominal terms.
Source: DefiLlama (2026[38]), Hacks: Overview, https://defillama.com/hacks; Coingecko (2026[39]), 2026 CEX & DEX Trading Activity Report, https://assets.coingecko.com/reports/2026/CoinGecko-2026-CEX-DEX-Trading-Activity-Report.pdf?ctcid=ade651db-752f-4457-9070-fc2011d28587, accessed 20 April 2026.
Another key risk is the growing trend of malicious actors targeting crypto-exchanges. In 2025, centralised exchanges around the world faced losses of around USD 2 billion, compared to USD 424 million for decentralised exchanges (Figure 5.6, Panel C). The most prominent case was an attack against ByBit in February 2025, orchestrated by actors linked to the Democratic People’s Republic of Korea (DPRK) (Chainalysis, 2022[37]). More recently, in 2026, DPRK-linked black-hat hackers attacked several exchanges and protocols, with two attacks resulting in the theft of USD 577 million, representing more than three-quarters of total hacking losses to date this year (TRM, 2026[40]). One notable feature of the attacks is the conversion of stolen crypto-assets into stablecoins across multiple blockchain networks (Crowell & Moring, 2026[41]), with the aim of laundering the funds and conversion to fiat currency.
Growing use of AI has also exacerbated intrusions targeting exchanges to compromise wallets and keys, through phishing and malware. Governance remains a key risk in the management and administration of exchanges, including deliberate insider abuse leading to significant losses (IMF, 2023[42]; U.S. Government Accountability Office, 2023[43]). The two major 2026 attacks mentioned above emphasise the importance of robust governance, with both exploiting vulnerabilities such as administrative rights and cross-chain messaging protocols (Travers Smith, 2026[44]).
The majority of cybersecurity-related vulnerabilities are linked to hot wallets.3 The increasing use of AI-based tools and processes also exacerbates risks. This is due to private keys being exposed to online environments, where malicious actors continually seek exploitable access to wallets and exchanges, leading to significant losses (see Table A A.22 in Annex A).
Another concern is the widespread use of crypto-assets as a payment method for ransomware attacks. Cyber-criminals may demand payment in the form of crypto-assets to allow victims to retrieve their compromised data. The attraction of crypto-assets stems from their pseudonymous anonymity, and the potential to launder funds received. In 2025, an estimated total of USD 820 million in crypto-asset payments were made in ransomware, with a median payment of USD 60 000 (Chainalysis, 2026[45]).
Cyber-attacks linked to state actors or geopolitical motives remain a concern across all the types of cyber-security risks described above. While crypto-asset thefts, their use as part of a ransomware attack, or disruptions to exchanges can be profit-motivated, these attacks can also have other motives such as deception, reputational damage, disruption of operations by adversaries and retaliation against sanctions (OECD, 2026[46]). State-linked hackers from the DPRK have increased both the scale and sophistication of their attacks, representing 64% of total losses in 2025 globally, and over three-quarters of losses in 2026 to date (TRM, 2026[40]).
Crypto-assets are especially vulnerable to cyber-threats enabled through quantum computing (Babbush et al., 2026[47]). Therefore, the emergence of quantum technologies may exacerbate risks of cyber-attacks against crypto-assets in the future. The predominant risk relates to the vulnerability of public keys to unauthorised decryption. As encryption is fundamental for enforcing property rights over crypto-assets, the risk of quantum-enabled attacks is of critical importance for the functioning of crypto-asset markets. In addition, blockchain-based crypto-assets may have limited or no back-up safeguards against unauthorised decryption, increasing the risk of theft or market disruption by malicious actors. These challenges, as well as potential beneficial applications of quantum technology, are further discussed in Annex A.
International regulatory frameworks are evolving to account for the increasing importance of crypto-asset markets for traditional financial markets and retail investors. At the national level, many Asian jurisdictions are also updating their regulatory frameworks in line with investors’ growing interest in crypto-assets.
5.3.1. Policy and regulatory developments for crypto-assets and stablecoins
Jurisdictions across Asia are following different pathways for crypto-asset deployment. China has maintained a restrictive stance towards crypto-assets, including stablecoins. Since 2021, trading and other activities related to crypto-assets are banned in China, with a February 2026 Notice on Further Preventing and Dealing with Cryptocurrencies and Related Risks reiterating this stance (Hankun Law, 2026[48]). In India, crypto-assets are currently not formally regulated, but the government has taken measures to address risks while signalling a restrictive stance. Virtual asset service providers are required to register with the Indian Financial Intelligence Unit (FIU) and comply with anti-money laundering and combating the financing of terrorism (AML/CFT) provisions such as customer due diligence (FIU India, 2023[49]). The Reserve Bank of India (RBI) has also consistently emphasised risks related to crypto-assets, reiterating that they are not considered legal tender, and calling for more restrictive measures against trading activity.4 However, unlike China, India has seen widespread adoption of crypto-assets especially among retail investors, despite this restrictive stance.
In contrast, several jurisdictions have for the first time introduced laws and regulations to regulate domestic crypto-asset activity. Examples include Pakistan’s Virtual Assets Act, passed in July 2025 and establishing the Pakistan Virtual Assets Regulatory Authority (PVARA, 2025[50]), and Viet Nam’s Law on Digital Technology Industry which took effect in January 2026 (Ministry of Finance of Viet Nam, 2025[51]). Pakistan and Viet Nam have both seen significant levels of domestic crypto-asset activity, predating the introduction of these laws.
Several jurisdictions with existing crypto-asset frameworks have introduced amendments to provide further clarity and address emerging risks. Notable examples include the 2025 Stablecoin Ordinance in Hong Kong (China), which enables firms to apply for a license to issue HKD-backed stablecoins (HKMA, 2026[52]), and Korea’s Digital Asset Basic Act proposal (currently under parliamentary review), which will strengthen the licensing and oversight framework for crypto-assets, including specific provisions for stablecoins (Kwon, 2026[53]).
These trends highlight a divergence in approaches across Asia, with many jurisdictions formalising or clarifying the regulatory framework to ensure crypto-asset activity remains within the regulatory perimeter, and a small number of jurisdictions maintaining their restrictive stance. Table A A.23 in Annex A provides a detailed list of the key policy initiatives and regulatory changes relating to crypto-assets (including stablecoins) across Asian jurisdictions in the last two years.
5.3.2. Central Bank Digital Currency initiatives across Asia
Jurisdictions across Asia are continuing to pilot and test central bank digital currencies (CBDCs). As of July 2025, 11 of the 18 Asian jurisdictions5 covered in this report are in the piloting phase of a CBDC (Atlantic Council, 2025[54]). Another two (Sri Lanka and Chinese Taipei) are currently developing a CBDC, while Bangladesh is at the research phase. The scope and design of CBDCs diverge, with some jurisdictions focused on wholesale CBDCs, while others are trialling retail CBDCs. At the same time, multilateral initiatives for cross-border CBDC testing are also progressing. Table A A.24 in Annex A provides an overview of recent developments across CBDC initiatives by Asian jurisdictions and multilateral experimentation efforts.
International standards play an important role in helping jurisdictions address the inherently cross-border impacts of crypto-assets, including the emerging risks discussed above. Several international organisations have issued – or updated – their key standards and frameworks to account for the growing importance of crypto-asset markets.
The Financial Stability Board (FSB) revised in 2023 its High-level Recommendations for the Regulation, Supervision and Oversight of Global Stablecoin Arrangements (FSB, 2023[14]). These call on authorities to ensure stablecoin issuance, redemption, custody, governance and intermediation meet the same regulatory outcomes as traditional finance. Recommended policies prioritise robust legal redemption rights at par, effective stabilisation mechanisms, and conservative and highly liquid reserve assets. The principles also call for transparent disclosures supported by regular independent audits. Authorities are also encouraged to subject stablecoin arrangements to comprehensive oversight across all functions, including intermediaries, trading platforms and custodians, with clear accountability and enforcement powers. The High-level Recommendations also emphasise the role of cross‑border cooperation and information‑sharing, reflecting stablecoins’ inherently international structures and the need to minimise regulatory arbitrage and supervisory gaps.
The Basel Committee on Banking Supervision (BCBS) establishes a prudential framework for banks’ exposures to crypto-assets that is risk‑based and activity‑neutral (BCBS, 2024[55]). The framework, effective from 1 January 2026, places ongoing responsibility on banks to conduct and document due diligence, risk assessment and classification, supported by robust governance and disclosure.6
In November 2023, the International Organization of Securities Commissions (IOSCO) issued 18 recommendations for crypto and digital asset markets (IOSCO, 2023[24]). The recommendations include strengthened governance and conflict‑of‑interest controls, robust market surveillance, clear listing and disclosure standards, effective custody safeguards, and operational resilience requirements. They also stress international regulatory co‑operation to reduce arbitrage, support consistent implementation, and ensure globally aligned regulatory outcomes for crypto‑asset markets.
To respond to illicit financing risks related to crypto-assets, the Financial Action Task Force (FATF) extended in 2019 the application of its anti-money laundering and combating the financing of terrorism (AML/CFT) standards (FATF Recommendations) to virtual assets and virtual asset service providers (VASPs), with complementary guidance and regular reporting on jurisdictions’ implementation (FATF, 2025[56]). These standards form the baseline for global AML-CFT action and contribute to the transparency and integrity of financial systems. However, the FATF finds that vulnerabilities remain, due to the uneven implementation of its standards (namely Recommendation 157 and the Travel Rule8) across jurisdictions (FATF, 2025[57]). This is compounded by regulatory gaps in licensing and supervision, weak enforcement against offshore VASPs, and technical features of DLTs9 that reduce traceability, and complicate timely detection, supervision and enforcement.
The G20/OECD High-Level Principles on Financial Consumer Protection (FCP Principles) set out the essential elements of a robust protection framework, applicable across all jurisdictions and sectors (OECD, 2022[58]). With regards to crypto-asset activities, core protections for consumers include clear disclosure, protection against fraud, effective redress mechanisms, and proportionate safeguards across the full lifecycle of crypto‑asset activities. To support these objectives, the OECD is developing policy guidance on the practical application of the G20/OECD High-Level Financial Consumer Protection Principles to digital assets and services (OECD, forthcoming[59]).
Strengthening and harmonising crypto-asset regulatory frameworks in line with international standards. The development of these frameworks is following divergent paths across Asia. While some jurisdictions are defining parameters for safe operation of crypto-asset activities, others have taken a restrictive stance. Given the cross-border nature of crypto-asset markets, alignment with the global standards outlined above will help jurisdictions strengthen the resilience of their domestic financial systems, address key risks, and avoid regulatory fragmentation and arbitrage.
Ensuring robust financial consumer protection frameworks. In line with the FCP Principles, financial consumer protection withing crypto-asset markets remains a priority for Asian policymakers. This includes ensuring that stablecoin issuers and crypto‑asset service providers operate within enforceable regulatory perimeters that address governance, custody, marketing practices, and conflicts of interest. To ensure supervisory effectiveness, it is essential that authorities have in place enforcement capacity, cross‑border co-operation, and consistent data collection, reflecting the inherently international structure of crypto‑asset markets (OECD, 2025[27]).
Improving the financial literacy of retail crypto-asset investors. Policymakers may consider integrating crypto‑assets explicitly into national financial literacy strategies, with particular focus on younger and first‑time investors. This would include combining firm‑level obligations with financial education strategies to mitigate misunderstanding of crypto‑asset risks and overestimation of potential returns, potentially leading to better investment decisions. Addressing the risks prevalent in crypto-asset markets is particularly important for Asian jurisdictions, where retail participation is elevated.
Continuing efforts to counter sanctions evasion and other illicit financing risks. Consistent with the FATF Recommendations, a rigorous, risk-based approach to the regulation, supervision and enforcement of crypto-asset activities, including virtual asset service providers, remains important for Asian policymakers (FATF, 2025[60]). Priority measures include improved data on peer‑to‑peer activity, targeted controls for high‑risk unhosted‑wallet transactions, enhanced blockchain analytics, and sustained public–private and cross‑border supervisory co-operation. Countering the misuse of crypto-assets for money-laundering, sanctions evasion and other illicit finance will require closer co-operation across jurisdictions, in partnership with industry to leverage collective intelligence on blockchain transactions and ensure swift enforcement action.
Increasing co-operation to counter cyber threats. Continued efforts to combat cybersecurity threats linked to crypto-assets remain a priority across Asian jurisdictions. Such risks are likely to grow in line with the expansion of crypto-asset markets, alongside geopolitically motivated attacks. Ensuring robust and resilience cybersecurity across financial sectors will require close collaboration between financial and cybersecurity authorities at the national level, as well as cross-border co-operation to identify cyber vulnerabilities and disrupt attacks. Efforts to ensure that financial institutions maintain high standards of operational resilience, in line with international standards such as the BCBS Principles for Operational Resilience, remain important (BCBS, 2021[61]).
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← 1. This includes the following jurisdictions: Afghanistan, Australia, Bangladesh, Brunei Darussalam, Cambodia, China, Hong Kong (China), India, Indonesia, Japan, Kazakhstan, Korea, Kyrgyzstan, Lao PDR, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, Uzbekistan, Viet Nam. See also Figure 5.2.
← 2. The OECD defines a crypto-asset as a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions (OECD, 2023[64]). This chapter focuses on two types of crypto-assets, in line with definitions by the Financial Stability Board (FSB, 2020[63]; FSB, 2023[14]):
unbacked crypto-assets (hereafter, “crypto-assets”) – private digital assets protected through encryption, with a value not backed by other financial assets (for example Bitcoin and Etherium)
“stablecoins” – crypto-assets that aim to maintain a stable value linked to other assets such as fiat currency, commodities, or in some cases other virtual assets.
The chapter also discusses central bank digital currencies (CBDCs) defined as a form of public money issued electronically directly by central banks, either for distribution by financial institutions (“Wholesale CBDCs”) or directly to economic agents (“Retail CBDCs”) (BIS, 2023[65]).
← 3. Hot wallets can be defined as digital wallets for holding crypto-assets which are connected to the internet, with the private access key also stored online (Coinbase, 2024[66]). Such wallets are considered as more exposed to cyber-threats such as theft and compromised private keys.
← 4. In 2018, RBI issued a circular directing licensed institutions not to engage in crypto-asset activities, however this circular was subsequently overruled by the Supreme Court in (Ramasubramanian, 2020[62]).
← 5. Jurisdictions currently piloting CBDCs: China, Hong Kong (China), India, Indonesia, Japan, Korea, Lao PDR, Malaysia, the Philippines, Singapore and Thailand.
← 6. The BCBS is currently reviewing the standard (BCBS, 2025[67]), reflecting concerns about potentially undue restrictions to market (GFMA, 2025[68]).
← 7. Recommendation 15 is included in the FATF International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (“FATF Recommendations”) (2025[60]). Recommendation 15 was updated in 2019 to apply AML/CFT measures to and virtual asset service providers (VASPs). It calls on countries to ensure that VASPs are regulated for AML/CFT purposes, and licensed or registered and subject to effective systems for monitoring and ensuring compliance with the FATF Recommendations. As of May 2026, Lao PDR is non-compliant with Recommendation 15; Bangladesh, India, Mongolia, Pakistan and Sri Lanka are partially compliant; Cambodia, China, Chinese Taipei, Hong Kong (China), Indonesia, Japan, Korea, Malaysia, Philippines and Thailand are largely compliant; and only Singapore is fully compliant.
← 8. Recommendation 16 of the FATF Recommendations (widely referred to as the “Travel Rule”) requires financial institutions to collect and transmit information on originators and beneficiaries of cross-border financial transactions, for the purpose of detecting and deterring illicit finance (2025[60]). Following the 2019 revision of Recommendation 15, the scope of the Travel Rule was also expanded to include cross-border transfers of crypto-assets.
← 9. These include cross‑chain interoperability and rapid settlement that facilitate layering and chain‑hopping (i.e. swapping of crypto-assets across blockchains, or to other assets on the same blockchain, in a systematic way with the intention of dissimulating transactions or ownership (Elliptic, 2023[69])).