A look at why China, Russia and Indonesia are working on their own crypto exchange platforms

However, the government has been actively working on its CBDC project, the Digital Yuan, which is running as a pilot program in several cities. And towards the end of Dec 2022, the government also announced the China Digital Asset Trading Platform. The launch of the trading platform seems in line with China’s mission to create its own regulated crypto and blockchain ecosystem.

The platform will be operated by two state-owned entities - Art Exhibitions China and China Technology Exchange - along with a private firm called Huban Digital. The platform will be hosted on its own blockchain, which has been christened the "China Cultural Protection Chain."

In China, NFTs are seen as "digital collectables" and unlike the rest of the world, one cannot purchase NFTs in China using cryptocurrencies. Moreover, in Nov 2022, Hangzhou Internet Court ruled that NFTs are virtual property protected by law. It stated that these digital collectables “have the object characteristics of property rights such as value, scarcity, controllability, and tradability.” However, laws around these assets are still being developed.

"In terms of industry supervision and regulation, digital assets represent a new form of commerce, and much regarding laws, regulations and supervisory policies remains to be refined," said Yu Jianing, an expert on digital assets and metaverse developments in China. Therefore, the trading platform could allow the regulated trading of NFTs until a better legal framework is formed for these digital assets. The trading platform could help "regulate and avoid the excessive speculation in secondary

Indonesia is another country looking to launch its own national cryptocurrency exchange. The platform was supposed to launch in December 2022, however, it was met with several delays as government officials wanted to ensure all requirements, and procedures were carried out with utmost planning.

"Let us not rush because if it is not ready, things will get messy. The government does not want this to massively take a toll on the public because people do not know much ," said Trade Minister Zulkifli Hasan on February 2, at the opening of Crypto Literacy Month in Jakarta. Hasan also revealed the updated release date for the exchange as June 2023. The exchange will function just like any other trading platform. It will act as an intermediary between buyers and sellers while also providing crypto custodial services.

The move to launch the exchange is in line with the country’s changing attitude towards cryptos. As of now, cryptos are treated in a similar vein as commodity contracts. As such, they come under the purview of the Commodity Futures Trading Regulatory Agency — more commonly known as Bappebti in Indonesia. However, according to revised laws, which were ratified in Dec 2022, cryptocurrencies will be recognised as regulated financial securities in the future and will be brought under the purview of the Financial Services Authority. Therefore, the establishment of the national crypto exchange could be in anticipation of this shift in regulatory outlook.

Another country that’s gearing up for the launch of a government-based cryptocurrency exchange is Russia. According to reports, Russian lawmakers are hard at work putting together amendments to allow for the introduction of a national crypto exchange.

Moreover, the idea has received support from both the Ministry of Finance and the Central Bank of Russia. This is also surprising given that the two entities have often been at loggerheads over crypto regulation. One of the main reasons for the launch of the exchange is to inculcate local crypto trading and create a revenue source through the taxation of these transactions.

"It makes no sense to deny the existence of cryptocurrencies, the problem is they circulate in a large stream outside of state regulation. These are billions of tax rubles of lost tax revenues to the federal budget," said Sergey Altuhov, a member of Duma’s Committee of Economic Policy.

These countries launching national crypto exchanges is an encouraging sign for investors and businesses in the digital asset space. It signals the wider adoption and future potential of these assets and their underlying blockchain technology. Judging by the success of these countries, several others could follow suit and this could result in the mainstream adoption of cryptocurrencies and other digital assets.