Opinion by: Dipendra Jain, co-founder of TCX
Regulation has emerged as the foundation for cryptocurrency. From the U.S.’s regulatory actions to Dubai’s detailed crypto regulations and India’s ongoing discussions about formal Bitcoin reserves, governments are reshaping digital finance rules. As listed companies, retailers, and social networks evaluate digital asset frameworks, stablecoins, and yield strategies, the pivotal question has shifted from what is next to who is crafting the future.
While speculation once fueled adoption, structured compliance is now essential for scaling up across the Asia-Middle East region. The UAE and India illustrate how treating regulation as the backbone of innovation can spur development. The UAE is advancing a unified framework for virtual asset service providers (VASP) to boost its global crypto aspirations. Concurrently, India is welcoming back offshore crypto exchanges, with approvals now requiring review by the Financial Intelligence Unit (FIU).
As regulatory structures solidify, platforms must adapt to new taxation, data governance, and licensing standards to tap into burgeoning markets seamlessly. The global focus is shifting eastward, prompting the question: Who will excel in the era of “permissioned scale,” where sustainable growth thrives within regulations rather than avoiding them?
Understanding jurisdictional nuances and demographic dynamics
Merely comprehending jurisdictional rules is no longer adequate for market entry. The Dubai Virtual Assets Regulatory Authority (VARA) has granted 36 full licenses and boasts over 400 registered firms. VARA is also testing tokenized gold and DeFi offerings, which are generating excitement for exploring real-world assets beyond traditional solutions within a regulated space.
However, regulation alone cannot empower platforms if they do not engage with users effectively. With over 1.12 billion mobile connections in India, only 55.3% have internet access, and just 27% of adults possess basic financial literacy. Platforms need to bridge this knowledge gap through educational user experiences. Crypto services can provide significantly more efficient, blockchain-based fintech solutions, especially in remittance-heavy regions like Cambodia and the Philippines, where such transactions account for 9% of GDP, by using stablecoins to facilitate transfers, cut costs, and improve transparency.
For underbanked populations and emerging markets, financial sovereignty will remain a dream without contextually appropriate features and user-centric solutions. Platforms that integrate jurisdictional intelligence at their core and localize offerings with compliance and cultural sensitivity will pave the way for future adoption, distinguishing themselves in the long run.
Compliance as a strategic advantage
The industry now stands at a point where compliance represents the ultimate strategic advantage. Cost-effective, government-supported payment systems are challenging conventional payment networks like Mastercard and Visa. Currently, regulated fiat-crypto frameworks hold the potential to disrupt outdated infrastructure, accessible only to those fostering reliable access within regulatory confines.
Related: The rise of Money2: The next financial system has already begun
Regulatory clarity fosters progress and adoption. The UAE saw $34 billion in crypto inflows last year. India’s Unified Payments Interface (UPI) exemplifies how regulation can enhance fraud safeguards. Collaborative efforts across borders can motivate crypto platforms to embed automated compliance and risk management at the protocol level.
A regulated base also equips institutions for smoother cross-border capital movement, meeting demands for transparent, scalable access to a diverse range of liquidity and global capital markets. The age of permissioned scale is on the horizon, where regulation, payment systems, and liquidity infrastructure evolve in synchrony. Advances in stablecoin technology bolster this setup, serving as an effective tool for cross-border transactions that connect traditional finance with crypto ecosystems.
AI and RWA as key drivers of financial inclusion
AI brings three crucial components: real-time regulatory interpretation, fraud detection, and equitable trading. Platforms can adeptly navigate jurisdictional requirements by incorporating regulatory intelligence into their trading systems while enhancing user experience.
Real-world assets (RWAs) further broaden this potential. Tokenized real estate, government bonds, and commodities like gold are gaining momentum, projected to become a $10 trillion market by 2030, particularly in economies looking to diversify their wealth distribution and investment choices. In ESG sectors such as agriculture, carbon credits, and trade receivables, tokenization streamlines processes, minimizes reliance on intermediaries, and expedites settlement times. This fosters liquidity for underrepresented participants, including small- and medium-sized enterprises (SMEs), while providing institutional investors unique, risk-adjusted, diversified returns.
Collaborations between capital markets and crypto firms also establish a foundation for tokenized private equity and other emerging assets. While these areas remain largely unexplored, imminent clarity may arise as major players like BlackRock, eToro, Robinhood, and Coinbase advocate for RWA inclusion in mainstream investment portfolios.
An AI-centered approach capable of pricing, routing, and settling RWA trades needs to incorporate compliance throughout every layer, from onboarding and identity verification to transaction oversight and regulatory reporting. This compliant, AI-powered foundation will represent a significant innovation for the next evolution of financial infrastructure.
Successful platforms will scale intentionally
The benefits from speculative booms have diminished. Today’s growth stems from platforms engineered to scale alongside regulatory frameworks. When regulations are established, true differentiation arises from those who prioritize building trust, liquidity, and utility across jurisdictions.
Opinion by: Dipendra Jain, co-founder of TCX.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
