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Blockdaemon executive Andrew Vranjes said that tax regulations and the lack of uniform regulations across jurisdictions hold back institutions from adopting blockchain.
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While blockchain infrastructure continues to be adopted by bigger institutions in the Asia-Pacific (APAC) region, a Blockdaemon executive predicts that the technology could soon expand into small and medium-sized enterprises (SMEs).
Andrew Vranjes, the head of international and vice president at blockchain infrastructure provider Blockdaemon, told Cointelegraph that blockchain technology will ultimately reach smaller companies as it develops in the APAC region. He explained:
“As blockchain solutions become more mature and scalable, adoption will expand beyond multinational corporations to include small and medium-sized enterprises (SMEs) that play a critical role in the APAC supply chain.”
According to Vranjes, the APAC region has been proactive and supportive of blockchain technology in terms of regulations.
APAC takes proactive steps to explore blockchain technology
Vranjes said that Singapore and Japan are taking steps to regulate and explore blockchain technology. The executive said supportive policies, regulatory sandboxes and public sector blockchain initiatives encourage institutional participation. He explained:
“The Monetary Authority of Singapore (MAS) has been a global leader in fostering fintech innovation, and Japan’s regulatory clarity around crypto assets has made it a hub for blockchain firms.”
In a study conducted by Henley & Partners, Singapore took the top spot in crypto adoption. According to the report, Singapore scored high in categories like regulations, infrastructure adoption and economic factors.
Meanwhile, Japan has been looking to boost its local Web3 industry by implementing tax reforms that favor startups. Japan’s minister of economy, trade and industry, Takeru Saito, said that he would help the local Web3 scene attract businesses and developers across the globe through favorable tax conditions.
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Institutional hurdles in adopting blockchain infrastructure
While many institutions are interested in adopting blockchain technology, Vranjes believes there are still hurdles holding some organizations back from implementing blockchain solutions. This includes tax regulations. He explained:
“The treatment of cryptocurrencies and digital assets for tax purposes remains unclear in many jurisdictions. Reporting on capital gains, trading profits, and other taxable events involving digital assets presents complexities for institutions, as there is often no clear guidance.”
In addition, the executive said that one of the biggest challenges is the lack of uniform regulations on blockchain and digital assets. Vranjes said that different countries, even in the same regions, have varying rules for crypto, tokenization, data privacy and smart contracts.
“These challenges primarily stem from the decentralized, cross-border nature of blockchain and the rapidly evolving regulatory landscape,” he added.
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This article first appeared at Cointelegraph.com News
