Cryptocurrency Fever: Should Southeast Asian Countries Cooperate

on Facing Cryptocurrency Market?

Hazmi Tri Laksono and Muhammad Fuadillah Nugraha

Departemen Hubungan Internasional, Universitas Airlangga, Surabaya

Keywords: Cryptocurrency, regulation, regional governance, ASEAN+3

Abstract: Bitcoin frenzy since its emergence in 2009 offers both opportunities and threats to certain parties. Since

bitcoin was mined and has become the market leader today, thousands of altcoins and crypto-tokens have

also been created. Those cryptocurrencies are being traded actively on both unregulated and registered

exchanges. This paper aims to discuss how the unregulated nature of cryptocurrency-related activities in

Southeast Asia region may disrupt business, tax collection, and security while at the same time challenging

the state monetary and financial authority. These disruptions require cooperation from a group of countries

in order to manage them. The authors argue that cryptocurrency pose threats not only in national scale but

also in regional and even global scale if it is left in grey area. The transformation of businesses, the growth

of crypocurrency markets in ASEAN and its potential to be used for money laundering and/or terrorist-

funding are several issues which cannot be managed only by a single nation. The complexity of

cryptocurrency-related issues may only be governed by effective regional economic governance.

Effectiveness of regional mechanism for multilateral and regional governance stated in Asian Development

Bank working paper 2017 was used as a guideline to discuss the issue. The formation of governance by

ASEAN, Republic of China, Japan, and Republic of Korea (ASEAN+3) is expected to manage

cryptocurrency-related issues.

1 INTRODUCING

Since bitcoin reached a peak of almost US$20,000 at

the end of 2017, it has been given a lot of attention

by the economists, governments, investors, and other

market actors related to digital financial. The

demand of cryptocurrency is one of the factors that

gives value to it so that its exchange rates towards

other fiat currencies are getting higher especially

bitcoin. They are unlike fiat currencies which are

regulated and backed by a central bank in each

country, cryptocurrencies are not regulated neither

are they backed by a central bank except Petro in

Venezuela and Entapay in Cambodia, the first

national cyrptocurrencies that have received official

governments support. Since the nature of its impacts

either positive or negative is borderless, cooperation

from several countries is needed to face this

phenomenon. Today, those cryptocurrencies are

traded actively on both unregulated and registered

exchange markets. All ASEAN Member Countries

allow cryptocurrency trading with only Singapore

imposing a tax for those trading it. Legal status of

cryptocurrencies as payment method in the majority

of ASEAN member countries does not indicate that

they are monitored or even regulated by the

governments. Due to pseudonymous and

unregulated nature, cryptocurrencies which are

converted into fiat currency can be used to evade

important banking protocols which are needed for

security purposes. Thus, the research question of this

paper is, “to what extent does cryptocurrencies pose

threats to nation-states in Southeast Asia countries

and how to manage them?”

The authors argue that the unregulated nature of

cryptocurrency-related activities such as trading,

paying, and investing in Southeast Asia region may

disrupt business, tax collection, and security. These

disruptions require cooperation from a group of

countries in order to manage them. Their threats

towards nation-state are very serious because they

may lead to another economic bubble burst which

can shake financial stability, may be used as tax

evasion method, transforming how people do money

laundering and terrorist funding. Cryptocurrencies

pose threats not only in national scale but also in

regional and even global scale if its regulations are

left in grey area. Grey area means that there are no

324

Laksono, H. and Nugraha, M.

Cryptocurrency Fever: Should Southeast Asian Countries Cooperate on Facing Cryptocurrency Market?.

DOI: 10.5220/0010276603240330

In Proceedings of Airlangga Conference on International Relations (ACIR 2018) - Politics, Economy, and Security in Changing Indo-Paciﬁc Region, pages 324-330

ISBN: 978-989-758-493-0

strict and clear regulations regarding their activities.

The promotion and formation of ASEAN Economic

Community which encouraged the development of

digital financing will be affected by cryptocurrencies

so that a close cooperation between the member

countries is needed. Meanwhile, there is a formation

of governance created by ASEAN, Republic of

China, Japan, and Republic of Korea

(ASEAN+3/APT) which holds the solution in

managing cryptocurrency-related issues.

2 GLOBALIZATION OF

TECHNOLOGY,

CRYPTOCURRENCIES AND

THEIR THREATS

Technological invention is no longer dominated by

concrete things such as vehicles or machines. In

today’s digital era, the invention of technology is in

the form of programming codes which ends up in the

creation of softwares, programs, application,

platforms, etc. The advancement of new information

technologies such as encryption, network computing

and decentralized distributed ledgers are driving

transformational change in the global economy.

Digitalization occurred in financial terms are

swarmed with new fintechs (financial technologies)

while in the process giving birth to the emergence of

virtual currencies. One of the most disruptive forms

of virtual currencies is the currencies created

through cryptography, peer to peer networks and

circulated in decentralized distributed ledgers, or

blockchain, which is called cryptocurrency. Bitcoin,

the first created cryptocurrency, has been spreading

in the world where it challenges the global economic

order as a whole. The technology bitcoin blockchain,

which underpin bitcoin, was also left in the public

domain where nobody has the patent to it by its

original inventor whose identity is unknown.

Anyone can modify the bitcoin blockchain such as

improving the security, add more features, accelerate

the transaction processes, or even increase the block

transaction size to create a whole new coin which

has their own value. The birth of new coins such as

Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, etc is

due to the modification of the technology. In a

technical definition, bitcoin is a digital cash that is

transacted via the internet in a decentralized trustless

system using a public ledger called blockchain

(Swan, 2015). Since its launch in 2009, bitcoin’s

success as payment method led other alternative

crypto coins or altcoins to be invented with different

optimizations and features. Those crypto coins have

been used as payment medium, value transfers and

as investment globally.

The global economy which relies on the US

Dollar made the Dollar as the reserve currency of the

global economy. The ability of the United States to

maintain its dominance in the world is because of

the Dollar standard. The emergence of bitcoin and

thousands of other altcoins disrupts the form of

centralization formed by the Dollar standard system.

Even before the emergence of cryptocurrencies,

there has been already a lot of electronic money

which was regulated and used as transaction means

such as e-money, WebMoney, etc. Nation-state

represented by their Central Banks and governments

as regulatory body may execute their authority and

power by applying restrictions and regulations

regarding those electronic money since essentially,

those electronic money are merely the representation

of value owned by the physical fiat money with their

transformed form to be electronic. They are also

issued by certain parties such as WebMoney

Company and certain parties who issued e-money

such as Banks. On the other side, cryptocurrencies

created through blockchain technology are not

merely the alteration of the dollar, rupiah, or yen

banknotes issued by the central banks in general, but

radically transform the concept of money and global

economic order as a whole. In a nutshell,

cryptocurrencies and crypto assets are not about ups

and downs of the digital currency market; it’s not

even about a new unit of exchange to replace the

dollar or euro or the yen, it’s about freeing the pople

from tyranny of centralized trust. It’s taking away

power away from the center – from the banks,

governments, and lawyers – and transfers it to the

peripherty, the People (Vigna & Casey, 2015).

The control towards currency is one of the

biggest power execution tools held by the central

banks and nation-state. A currency will always be

valid when they win the trust of the community

using it whether it is the currencies issued by central

bank or institution who holds monetary authority or

decentralized currency issued by computer programs

(Vigna & Casey, 2015). The currencies issued by the

central institution are used by the community inside

political territorial scope or in global scale in certain

case. This is due to the the trusts given by the users

towards the monetary authority who issued those

currencies. The emergence of bitcoin, the first crypto

currency / asset issued by computer program which

had been codified by someone or a group of people

who called itself Satoshi Nakamoto gave alternative

trust models which have been rooted in the society.

Cryptocurrency Fever: Should Southeast Asian Countries Cooperate on Facing Cryptocurrency Market?

325



The intermediaries are no longer needed for the

authorization and authentication due to blockchain

technology. Centralized payment processing

protocol through financial institutions which was

needed to prevent funding for money laundering or

tax evasion, terrorist financing, and other illicit

activities have been breached. Since

cryptocurrencies came, it becomes much harder for

the authority to trace transaction conducted

pseudonymously or even anonymously in order to

prevent those evil activities.

Despite its positive impacts, there are generally

three major threats posed by the emergence

cryptocurrencies markets; economic bubble burst,

potential for illicit activities, and cyber attacks

(Leonardo, 2018). Its extremely high volatility holds

the potential to create the burst of economic bubble

and disrupt businesses. According to Global

Cryptocurrency Benchmarking Study (2017), there

is a high increase of cryptocurrency market

capitalization, exchanges and cryptocurrency

companies based in Asia-Pacific Region since 2016.

The high level of deregulations in Southeast Asia

region regarding cryptocurrency-related activities

will affect the national and even regional economy if

there is actually cryptocurrency bubble burst. The

burst will potentially shut down the billion of dollars

cryptocurrency industries in Southeast Asia

including the companies, exchanges, down to

individual level traders and investors. Thus, it will

lead the disruption of businesses when the regional

economy is shaken by the bursts.

Second, the high deregulations also increase the

potential for cryptocurrencies to be used in illicit and

criminal activities including money laundering and

terrorist funding. It is a common knowledge for

anyone who is familiar with bitcoin especially since

its emergence on the market that it used to be a tool

for transaction in Silk Road, a dark web online shop

that cannot be accessed in the ordinary way. It is the

nest for illicit activities such as money laundering,

drug-trade, human markets and so on (Swan, 2015).

However, as technologies, bitcoin and blockchain

are actually neutral and dual use that means they can

be used for good or evil. It is difficult for regulators

to track who does the illicit activities since it is a

pseudonymous enabler that can be used to facilitate

illegal and malicious activities (Swan, 2015). Even

after the shutdown of Silk Road in 2013 by Federal

Bureau Investigations, bitcoins which had been

confiscated by the U.S authority was sold out

directly on the auction occurred in 2014. Today,

bitcoin and other cryptocurencies pose other threat

such as terrorist-funding. Terrorists are using

anonymous cryptocurrencies to fund their operations

and evade detections as they move huge sums of

money internationally. According to Cornish (2017),

there is a report that showed an increase in terrorists

using bitcoin in US, the Gaza Strip, and Indonesia.

Authorities are able to track cryptocurrencies despite

the belief that they are untraceable because criminals

often stumble at so-called “real world chokepoints”

where they have to exchange the cryptocurrencies

into fiat currencies

. The third threat is the potential

of cyber attacks which are pointed to the

cryptocurrency exchanges and wallets. In 2018

alone, there are more crypto-related cyber attacks

than all the other cyber attacks combined (Partz,

2018). These cyber attacks such as hacking and

phising to gain access into exchanges and personal

wallets have stolen millions of dollars in the form of

cryptocurrencies. However, the attacks are also

encouraging the technology to get more matured.

Also, there is always a chance for cyber attack when

talking about digital technology. Then, what can

ASEAN do to manage such threats?

3 MANAGING

CRYPTOCURRENCIES

ACTIVITIES IN ASEAN

ASEAN Work Programme on Electronic Commerce

(AWPEC) which aimed to facilitate cross-border e-

commerce in ASEAN mentions the needs for secure

payment system, trade facilitation and electronic

transactions. Without regulating the use of

cryptocurrencies in ASEAN, the cross-border

electronic transaction will surely be disrupted

because the internet users keep growing in the

region and more startups in the region would be

integrating cryptocurrencies into their respective

models

. Keohane and Nye (2000) defined

governance as the process and institutions, both

formal and informal that guide and restrain the

collective activities of a group. Since the

government is the subset that act with authority and

creates formal obligation, their position is not

replaced by other actors as the primary instrument of

domestic, regional, and even global governance.

Moreover, the other actors’ roles are supplemental to

the role of nation states. The complexities in



See https://www.express.co.uk/finance/city/902517/ISIS-

Bitcoin-terrorist-attack-deadly-weapons-funding-

cryptocurrency-money-laundering

See https://theaseanpost.com/index.php/article/do-

cryptocurrencies-have-future-southeast-asia



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326

ASEAN+Three (APT) behavior which become the

product of contingent interaction between the

material (power, territory, wealth) and the ideational

(norms, ideas, identity) are fortified since the

member states’ interests and identities remain

paramount (Nesadurai, 2009). This means the long-

standing ASEAN norms of non-interference remain

central to regional governance. However, the

institutionalization of APT Macroeconomic Office

(AMRO) may assist the formation of financial

governance in the region.

The authors will discuss how APT is expected

to be able to manage cryptocurrencies’ threats by

analyzing its 2018-2022 work plan regarding

security cooperation which will shape regional

governance. First of all, the authors will describe

the regulations and policies regarding

cryptocurrencies in all member countries. The

impacts of cryptocurrency on businesses whether it

is going to be positive or negative are still

speculative. Nevertheless, the impacts can actually

be predicted from each authority decision to accept

it as legal tender in daily transaction since

cryptocurrencies are considered as “currency” as

well as “assets”. The increase of cash digitization in

Southeast Asia also enforces people to use digital

currency in transaction

. Since Amazon and

Microsoft already accept bitcoin as their payment

method, more will surely follow. Regarding crypto-

assets, high level of volatility and the absence of

regulations make cryptocurrencies stands in risky

position for investment. In fact, both the currency

and overall industry are volatile.

New traders and investors who have not enough

experience in cryptocurrency world may be attracted

to invest in huge amount and sell their real assets or

make a loan to the bank in order to invest in this

business. This may lead to the huge lost for them

since not many exchanges impose know-your-

customer protocol to prevent this. On the other hand,

the volatility in cryptocurrency market can also

mean instant money for them who are luckily able to

purchase when the price is low and sell them back to

fiat currencies when the price is high. After they

successfully take advantage of the market condition,

the traders may withdraw the amounts from the

exchange with several fees depending on the

exchangers’ policy. Traders who are making a

decent amount of funds in cryptocurrency trading

may leave their income untaxed especially in



See https://www.mckinsey.com/business-

functions/digital-mckinsey/our-insights/reimagining-e-

commerce-for-southeast-asia

ASEAN Member Countries except Singapore since

selling, spending and even exchanging for other

tokens likely have capital gain implications. Thus, it

is important to make a review regarding

cryptocurrency regulations in APT member

countries.

4 REGULATIONS IN APT

MEMBER COUNTRIES

Singapore can be seen as the most potential

destination for cryptocurrency since there are several

companies that sought to flee the regulators

presented in China. However, Monetary Authority

of Singapore does not distinguish between

transactions in fiat and cryptocurrency which means

all financial institutions will be subject to the same

regulations. Citizens may use cryptocurrencies as

payment method but they will still be charged by tax

as well. Singapore’s regulators will impose Anti

Money Laundering/Combating the Financing of

Terrorism (AML-CFT) on intermediaries that

exchange fiat for virtual currencies. Similar to

Singapore, Thailand has also drafted new rules

regarding cryptocurrencies regarding taxation in an

effort to prevent money laundering and tax

avoidance by obligating the businesses to provide

transaction information as well as the names of

buyers and sellers to the AML office. The law would

require cryptocurrency exchanges, brokers and

dealers to register with relevant authorities,

following a public consultation that called for rules

to be implemented by security agency

. Meanwhile,

Vietnam, Laos, Myanmar and Brunei still leave

cryptocurrencies-related activities in grey area while

Philippines are planning to regulate them. Cambodia

is the only country in Asia who has officially

launched its own state-backed cryptocurrency called

Entapay even though the whole regulations

regarding cryptocurrencies there are still also left in

grey area. Meanwhile, Malaysia has addressed a new

AML-CFT which specifically focuses on

cryptocurencies. The government also reaffirmed

that virtual currencies, including cryptocurrencies

are not recognized as legal tender in Malaysia. This

new regulation required anyone who is conducting

digital currency exchanges to mandate know-your-

customer (KYC) adherence, including the collection

of ID documentation. This aims to promote greater



See https://www.coindesk.com/thailand-inches-closer-to-

cryptocurrency-taxation/

Cryptocurrency Fever: Should Southeast Asian Countries Cooperate on Facing Cryptocurrency Market?

327



transparency in the use of digital currencies to

prevent their abuse for illegal activities

The plus three members stand on different

stances regarding cryptocurrencies regulation but

this does not change the fact that they have clear

regulations in this matter. China can be seen as the

first country to react regarding cryptocurrencies

frenzy. The authorities completely ban anything

related to cryptocurrency in the country. They block

bitcoin and cryptocurrency-related websites through

their “Great Firewall” which disabling their citizens

from accessing crytpcurrency exchanges and digital

asset trading platforms. Even using virtual private

network (VPN) to breach the firewall is prohibited

thus forcing the cryptocurrency exchange markets to

relocate somewhere else. Unlike China, South

Korean regulators do not ban cryptocurrencies but

only allowing the trade from real-name bank

accounts. This real-name cryptocurrency

identification service aims to crackdown the

anonymity and the illegal use that some

cryptocurrencies might have

. Meanwhile, as a

global leader in cryptocurrency investment, Japan is

the only country in APT members who has a proper

legal system regulating cryptocurrency. They have a

law that brought cryptocurrency exchanges under

AML and KYC rules while legalizing it as a

payment instrument.

In Indonesia, there is a strict law regarding

legitimate payment method by using Rupiah. This

law puts cryptocurrencies to be considered as assets

not as currency. However, prohibiting it as payment

method does not mean there is a specific regulation

regarding cryptocurrency in Indonesia. The citizens

can still trade and invest in cryptocurrencies freely

without taxation and cryptocurrency market

exchanges in Indonesia allow foreigners to be a

member to do cryptocurrencies-related activities

except paying, thus opening the opportunities for

money launderer from other counries to operate.

Moreover, even though cryptocurencies

consideration as money by monetary authority does

not prevail de jure in majority of ASEAN member

countries, it is de facto in the crypto holders

especially when they are doing transactions in global

online shop which are accepting them. In the end,

the majority of ASEAN monetary authorities merely

consider bitcoin, litecoin, and the others as crypto

assets instead of cryptocurrencies. The differences in



See https://news.bitcoin.com/new-malaysian-

cryptocurrency-regulation-come-into-effect/



See https://www.cnbc.com/2018/01/29/south-korea-

cryptocurrency-regulations-come-into-effect.html

viewing bitcoin and its kind as crypto assets still do

not shut the threats that they bring which is why

effective governance among a group of coutries is

needed.

5 MULTILATERALISM TO

MITIGATE BORDERLESS

CRYPTOCURRENCIES

NEGATIVE IMPACTS

After the Asian Financial Crisis 1997-1998, a series

of bilateral currency swap agreements called Chiang

Mai Initiative was set up by ASEAN, People’s

Republic of China, Japan, and the Republic of Korea

(ASEAN+3) . In the process of making the Chiang

Mai Initiative a multilateral effort, the members

conceived the idea of setting up an independent

surveillance unit to monitor regional economic

situations and issue early warnings

(Chutikamoltham, 2017). This led to the creation of

ASEAN+3 Macroeconomic Research Office

(AMRO) and became an international organization

in February 2018

. AMRO’s strategy and policy for

managing operations is set by its Executive

Committee whose members are the deputy or vice

ministers of finance and deputy of central bank

governors from the member countries. They also

present its surveillance reports regarding financial

and economic development directly to high-level

officials of each country’s member’s Ministry of

Finance and Central Bank and give the findings and

recommendations to the member in an informal and

confidential manner. ASEAN+3 have shown a

strong commitment to regional financial cooperation

and if this keeps up the support, it should be able to

expand the scope and significance of its work as

well as forming regional governance.

The rise of digitalization in economic activities

in member countries may encourage AMRO to

observe the impact of virtual currencies which

included in it. Cryptocurrencies which are related to

a state’s economy should give AMRO another focus

to analyze the threats which they may bring.

However, AMRO does not have the authority to

force members to heed its analyses or advice. This

makes AMRO essentially a research institution that

provides analyses and advice in an informal manner.

Cryptocurrencies’ threats are considered as global

issue since money laundering and terrorist financing

may affect multiple states and there is already a



ADBI Working Paper 719

ACIR 2018 - Airlangga Conference on International Relations

328

regional cooperation to manage these issues such as

in EU. Since governance can be understood to

concern the nature and distribution of decision-

making power within organizations and societies,

the lack of decision-making power in APT means

there is no standardized rules and policy in the

community.

The APT cooperation work plan 2018-2022

aimed to establish closer cooperation regarding

security which includes counter terrorism and anti-

money laundering through sharing information on

terrorists, supporting infrastructures as well as

criminal activities and implementing measures to

combat money laundering and terrorist financing

Since cryptocurrencies hold the potential to do both,

this work plan should be the base for each member

countries to commit for closer cooperation. Leaving

the cryptocurrency regulation in grey area in most of

ASEAN Member Countries indicates that they still

do not take the threats seriously. It is no longer

enough to enhance cooperation in the field of border

management to help identify terrorism-related funds

since cryptocurrencies are moving in cyber-space.

The authors see this counter terrorism strategy to be

in need for updates because there are already several

reports stating ISIS’ use of cryptocurrency to finance

their operations

. We propose the community to

form their own digital financial action task force

since Singapore and Japan can be considered as the

most cryptocurrencies-friendly states while most of

other members still leave the cryptocurrencies in

grey area. Furthermore, the Head of Indonesian

National Police also stated in one of his interviews

that the terrorist operation which occurred in 2016

was funded through bitcoin

. Thus, a strict

regulation regarding cryptocurrencies is needed by

Indonesian authority and since terrorism could occur

anywhere, the same can also be said to other

countries.

As two of the most cryptocurrencies-friendly

states and the members of APT, Japan and

Singapore can also provide policy and regulatory

recommendations to Indonesia as well as other

countries in order to track terrorist funds in cyber-

space. Moreover, these two digitally advanced

countries may also share their technology for

cryptocurrency regulation such as real-name wallet



APT Cooperation Work Plan 2018-2022

See https://www.express.co.uk/finance/city/902517/ISIS-

Bitcoin-terrorist-attack-deadly-weapons-funding-

cryptocurrency-money-laundering

See https://news.detik.com/berita/d-3377708/rekrutmen-

teroris-beralih-ke-medsos-kapolri-pendanaannya-pakai-

bitcoin

services or better firewall to prevent network breach.

Not only terrorist-funding, most of ASEAN Member

Countries are also considered to be the most

corrupted countries which means the potential for

cryptocurrencies to be used as money laundering is

high in those member states. Moreover, there should

be technology transfers among the private sectors

such as the exchanges and crypto wallet providers

regarding safety and security in order to prevent

cyber attacks which may happen anytime. For

example, Binance, a Chinese cryptocurrency

exchange which moved to Japan, is considered to be

the safest and secured according to Coinsutra can

transfer or give license to other exchanges based in

APT member countries. Japan and China can offer

their technology to create a safer and more secure

cryptocurrency market in APT member countries.

Owen (2013) argued that since the ASEAN

countries are characterized by low governance

performance, the plus three members should provide

better governance in regards of regulatory quality

and government efficiency. The technology held by

the plus three members will surely assist the

regulatory qualities in term of cryptocurrency

industries. The so-called +3 scenarios also comprise

a number of “club” members with stronger national

governance performance

. Owen also stated that

many ASEAN countries could be major

beneficiaries, provided such a larger regional

cooperative frameworks were to target the upgrading

and convergence of national governance standards.

Thus, the exemplary policy formation shown by the

plus three members regarding their stances in

regulating cryptocurrency may upgrade the national

governance as well as the ASEAN standards.

6 CONCLUSION

As ASEAN has its own unique approach to

multilateralism, non-interference, minimal

institutionalization, consultation, consensus, and

non-confrontation, responsibility for policy action

on the APT rests almost exclusively with member

states and there is no mechanism exists to compel

member states to comply with APT commitments.

There is also a mechanism where sub-group of

members can act on policy without waiting for all to

do so. Those that cannot or do not want to proceed

follow later, but set their own timeframes to act

. Its

volatile nature and high deregulations make



ADBI Working Paper 425

US-ASEAN Business Council Digital Economy, 2015

Cryptocurrency Fever: Should Southeast Asian Countries Cooperate on Facing Cryptocurrency Market?

329



cryptocurrency as a risky investment for business.

Government and media should be able to warn and

educate the people who aimed to make huge money

by investing in cryptocurrency and keep

emphasizing that they should not invest the amount

they cannot afford to lose. The report from Time

also predict the scenarios in which the bursting of

the bitcoin bubble may bring down the entire stock

market such as by declining the investors’

confidence, companies jump on the bitcoin

bandwagon before a crash, and by creating a Wile E.

Coyote effect

. These scenarios development should

be more carefully observed by AMRO since they

impede the APT work plan 2018-2022 to maintain

financial market stability in the region.

Countries which do not ban cryptocurrency-

related activities should begin to seriously address

the issue by obligating the real world chokepoints

such as exchanges, brokers, and dealers to

implement KYC protocols and report them to the

local authorities in order to prevent the wrong actors

in using cryptocurrency as their facilitator to do

illicit activities. The authors think that South Korean

banks policy which have enforced a real-name

trading system for cryptocurrencies and banned the

use of anonymous bank accounts in transactions to

prevent virtual money from being used for money

laundering and other illegal activities is a realistic

move to make. This move should be followed by the

banks in other countries so that the authority will be

able to verify the cryptocurrency investors’

identities. APT as a whole can also establish an

AML/CFT team specializes in virtual currencies

including cryptocurrencies to monitor any suspicious

activities. If there are too tight regulations in one

country, the activities can move to other countries.

Even if all countries in the world ban

cryptocurrencies (which is unlikely), there is still

underground economy. Overall, as ASEAN citizens

become more digitalized, the time is now to stop

leaving this issue in the grey area even though the

decision to do it exclusively falls upon each member

countries. Regional governance can be established if

there are standardized norm and rules before the

negative impacts become unavoidable. However, the

minimal interference conducted in the regional

community will always be the main obstacle for the

effective regional governance to take shape.



See http://time.com/money/5105912/bitcoin-bubble-

stock-market/

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