by Jack Tan, Co-founder, WOO NetworkCrypto companies may be forced to move from the West (the US and EU) due to tighter regulations that stifle growth. However, western founders and teams may continue to dominate innovation by looking east where governments are leaning towards embracing new technologies.In the first quarter of 2023, regulation has become a central issue in the crypto asset space as the US responds to back-to-back scams of the previous year. As well as warning banks about crypto and threatening to sue the largest digital asset exchange, the Biden administration shifted its position on crypto from neutral to negative through its White House Council of Economic Advisers, which said that “crypto assets do not appear to offer investors any fundamental value to date.”“Indeed, crypto assets to date do not appear to offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, improve financial inclusion, or make payments more efficient; instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value. This raises the question of the role of regulation in protecting consumers, investors, and the rest of the financial system from panics, crashes, and fraud related to crypto assets. Even so, as companies and governments experiment with DLT, it is conceivable that some of their potential benefits may be realized in the future,” read the Economic Report of the President, transmitted to Congress last month.<h3 id="strong-exodus-of-talent-and-capital-strong">Exodus of talent and capital</h3>Major crypto players are no longer looking to the US for leadership as they seek other jurisdictions to operate and grow from. A CoinDesk report cited prominent US crypto firms to be moving out of the US. For example, the CEO of Ripple, Brad Garlinghouse said the crypto industry has “already started” moving outside of the US while Coinbase, once the most optimistic on US regulation, is considering launching an <a href="https://www.forbes.com/sites/digital-assets/2023/03/20/coinbase-is-considering-diversifying-its-regulatory-risk-by-moving-a-trading-unit-outside-of-the-us/?sh&#61;165b3b753e72" rel="noopener noreferrer nofollow">overseas trading desk</a>, and Circle is opening a new office outside the States. Kraken also has futures outside the US while Gemini just announced an offshore PERP exchange.It’s hard to imagine that they would go to the EU because even the G7, an <a href="https://en.wikipedia.org/wiki/Inter-governmental" rel="noopener noreferrer nofollow">intergovernmental</a> political forum consisting of Western countries (including the EU) except for Japan, is set to outline tougher regulations for digital assets in May. One of its members, France went ahead with tighter restrictions for new crypto companies. France’ bill, just waiting for President Emmanuel Macron to sign it into law, read applying companies will have to meet extra rules on internal controls, cybersecurity, and conflicts of interest.<h3 id="strong-why-move-to-the-east-then-strong">Why move to the East then?</h3>For starters, regulators are more supportive, surprisingly in the financial centers of Asia. Japan recently had a more welcoming message for new firms as it relaxed requirements for token listings while Hong Kong announced it was open to crypto firms with the goal of keeping its status as an international finance hub, even assisting with banking. Thailand’s finance ministry said it would waive taxes for firms that conduct initial coin offerings (ICOs) for investment. Dubai also unveiled its crypto regulatory framework as it hopes to become a global hub for crypto and blockchain activities.Apart from regulations, the East will play a role in cultivating innovations in crypto through higher adoption rates of crypto assets.The East dominates the top 20 global crypto adoption index by Chainalysis including Vietnam, Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya, Indonesia, and China. The report highlighted that Vietnam showed high purchasing power and population-adjusted adoption across centralized, DeFi, and P2P cryptocurrency tools.  Polling done in 2020 found that <a href="https://www.weforum.org/agenda/2021/02/how-common-is-cryptocurrency/" rel="noopener noreferrer nofollow">21% of Vietnamese consumers reported</a> using or owning cryptocurrency. Surprisingly, China, re-entered the top ten of the Chainalysis index this year after placing 13th in 2021. “This is especially interesting given the Chinese government’s crackdown on cryptocurrency activity, which includes a ban on all cryptocurrency trading announced in September 2021. Our data suggests that the ban has either been ineffective or loosely enforced,” said Chainalysis.Additionally, money is flowing in the region. For example, just weeks ago, China&#39;s third largest state-owned insurance institution Pacific Insurance Investment Management Hong Kong Branch and Waterdrop Capital launched a compliant blockchain venture capital fund and POS token income enhancement fund in Hong Kong. Dubai-based Cypher Capital is looking to raise over $100 million for a new venture capital fund  to target &#34;Asian technology tycoons.&#34; Meanwhile, responding to Hong Kong’s plan to remain a finance hub, Hong Kong-based Plutus VC plans to raise US$100 million by the end of 2023 to fund investments in the cryptocurrency market, according to a Bloomberg report. Meanwhile, NGC Ventures, which is one of the biggest VCs in Southeast Asia, has launched a $100 million crypto fund to invest in early-stage projects in decentralized finance, blockchain-based gaming, NFTs, and the metaverse. Moreso, Hong Kong-based asset manager HashKey Capital, who is instrumental in moving crypto forward in Hong Kong, has closed its third blockchain funding at US$500 million with a focus on growth opportunities in emerging markets.<h3 id="strong-how-could-the-west-still-dominate-the-crypto-industry-strong">How could the West still dominate the crypto industry?</h3>A more open regulatory environment, faster crypto adoption, and flow of funds in the region do not necessarily translate to the East as having the dominant market players in the crypto space. Western countries still hold valuable cards apart from having relatively stronger economies - exceptionally brilliant talents with an ingrained culture of innovation, and the strongest financial markets.First, the most innovative firms in the crypto space are founded by Westerners. For example, Ethereum founder Vitalik Buterin and Binance founder CZ were raised and educated in Canada. The founders at Coinbase, Grayscale, OpenSea, Gemini, Kraken, Uniswap, and Chainalysis are mostly from the US and educated in the US.Second, the West dominates the ranking of the top 10 most innovative economies as measured by the Global Innovation Index. Switzerland, United States, Sweden, United Kingdom, Netherlands, Republic of Korea, Singapore, Germany, Finland, and Denmark. We would expect that innovative crypto projects would continue to originate from these locations.Lastly, the crypto space would need the support of the financial and fintech centers, and the majority of the top-ranking ones are still from the West. In the Global Financial Centres Index released last month, 14 of the top 20 financial centers are those from the West including New York, San Francisco, London, Chicago, and Washington DC. Six out of the top 10 fintech centers are from the West including New York, San Francisco, London, Los Angeles, Boston, and Washington DC.<h3 id="strong-maintaining-a-robust-risk-reward-framework-is-crucial-for-both-companies-and-governments-strong">Maintaining a robust risk-reward framework is crucial for both companies and governments</h3>Having worked in the finance industry all my professional life, I have witnessed how innovations are borne out of crises and deeply stressful situations. Innovation is messy and oftentimes not pretty.Companies and governments forget this and often it’s the leaders that enact policies that lean too heavily towards protecting the status quo by limiting risk. We’ve seen once innovative companies like Kodak and IBM lose their edge because it’s only natural to take less risk and aim for stability as shareholders and management focus on the bottom line. Meanwhile, scrappy startups with nothing to lose aim for the moon and sometimes succeed wildly. The same thing can be extrapolated to those who govern and as we see now, some jurisdictions are embracing and even fostering change while others are resisting. Talent will go where opportunities are taking along with them a brighter future.Note: This op-ed piece was first published on CoinDesk—<h3 id="stay-tuned-for-all-of-woo-network-s-exciting-developments">Stay tuned for all of WOO Network’s exciting developments!</h3><ul><li>Socials: <a href="https://linktr.ee/WOOnetwork" rel="noopener noreferrer nofollow">https://linktr.ee/woonetwork</a></li><li>Website: <a href="https://woo.network/" rel="noopener noreferrer nofollow">https://woo.org</a></li><li>Telegram Announcements: <a href="https://t.me/woonetworkann" rel="noopener noreferrer nofollow">https://t.me/woonetworkann</a></li><li>Medium: <a href="https://medium.com/woonetwork" rel="noopener noreferrer nofollow">https://medium.com/woonetwork</a></li></ul>The content above is neither a recommendation for investment and trading strategies nor does it constitute an offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on the content shall undertake the result or loss by himself/herself.The content of this document has been translated into different languages and shared throughout different platforms. In case of any discrepancy or inconsistency between different posts caused by mistranslations, the English version on our official website shall prevail.

West will still dominate crypto innovation with East's help and risk-reward calculations

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