Asia Morning Briefing: Regional Crypto Power Balance Is Shifting as Japan ‘Ready to Pop’

Good Morning, Asia. Here's what's making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas.

The conventional wisdom holds that the battle for Asia's crypto hub is a contest between Singapore and Hong Kong. Both cities have English as an official language and use Western-inspired common law in their court system.

But during Token2049, executives weren't debating whether Singapore or Hong Kong would win the title of Asia’s crypto hub. Instead, they were talking about how Japan, once written off as overregulated, had quietly become the region’s most credible market for real trading volume, staking infrastructure, and institutional growth.

“Japan had no regulation for a long time, don't forget, that's where crypto basically happened, and then it went super stringent, and nothing happened for a long time,” Konstantin Richter, the CEO of Blockdaemon, told CoinDesk during Token2049. “But people kept on chiming away, and now they actually have a regulatory infrastructure that’s institutionally scalable and about ready to pop. Whereas here [in Singapore], it was a free fall, and now they're starting to build up regulation.”

Singapore moved fast and then tightened. It opened its doors early to crypto firms, building a reputation as Asia’s sandbox for innovation. That worked, until it didn’t.

The collapse of FTX and other failures exposed weak consumer protections, prompting the Monetary Authority of Singapore (MAS) to swing toward heavy supervision in 2024. The result: higher compliance costs, mandatory custody segregation, external audits, and slower licensing. Those that don't like it have to leave, even if they aren't serving Singapore-based customers. It's a lot of work for a relatively small market.

“Singapore was so crypto-friendly that everyone wanted to come here,” Richter said. “Then it built up, things happened, and suddenly you’re like, wait a minute, we do need more stringent rules.”

Japan, by contrast, did its hard regulatory work years ago.

Following Mt. Gox (2014) and Coincheck (2018), Japanese regulators had already imposed strict licensing, segregation, and onshore custody rules long before FTX imploded.

By 2025, instead of tightening, Japan is opening slightly: allowing institutional staking, setting a pathway for crypto-backed ETFs, and clarifying how firms can offer yield.

Unlike Singapore’s innovation-first, regulate-later approach, Japan’s regulators wrote detailed rules for custody, segregation, and security years ago. Exchanges must hold client assets separately and use domestic validators, creating the kind of environment institutional investors prefer.

Richter said Asian clients, particularly in Japan, are willing to pay for institutional-grade infrastructure, a contrast, he noted, to Europe, where customers are typically more price-driven.

The shift isn’t just regulatory. Japan's almost invisible yield – the Bank of Japan only ended negative rates last year – makes staking unusually attractive: a 3 % ETH yield is 30 times higher than domestic treasury returns. That’s why Blockdaemon and other node operators see Tokyo as the next major destination for institutional staking flows.

Derivatives exchange BitMEX is also taking notice. In a recent interview with CoinDesk, BitMEX CEO Stephan Lutz said the exchange had just moved its data center to Amazon Web Services' facility in Tokyo to be closer to where the action is.

Japan’s crypto framework, once criticized for being too strict, now gives it a clear edge: predictable oversight, investor protection, and rising institutional yield.

Now, the question is, how will the usual hubs of Hong Kong and Singapore compete?

Market Movement

BTC: Bitcoin surged past $126,000 in a “perfect storm” of macro tailwinds. Yet this latest breakout above $125,000 came largely from non-institutional demand. With ETF inflows paused and retail traders fueling momentum through high perpetual funding rates, BTC’s resilience above prior highs suggests whales are holding steady and scarcity narratives are deepening.

ETH: Ethereum traded around $4,705, extending its recent strength on renewed interest in on-chain fundamentals, upgrade optimism, and rotation from BTC to altcoins, as BitMine Immersion Technologies (BMNR) added 179,251 ETH last week, bringing its holdings to 2.83 million tokens worth $13.4 billion, in a bid to control 5% of Ethereum’s supply and solidify its position as the second-largest listed crypto treasury after Strategy.

Gold: Gold traded around $3,960, nearing Bank of America’s long-held $4,000 target, but the bank’s analysts now warn the metal looks overbought and could face a Q4 consolidation after a 50% yearly rally, even as longer-term charts still leave room for gains toward $5,000–$7,000 if the bull cycle continues.

Nikkei 225: Japan’s Nikkei 225 hit another record high Tuesday, boosted by a Wall Street tech rally and strong chip stocks following the OpenAI-AMD deal, extending gains after Sanae Takaichi’s election as Japan’s next prime minister, which fueled optimism over pro-growth policies.

Elsewhere in Crypto:

• Why Is Everyone Suddenly Talking About Privacy Coin Zcash Again? (Decrypt)
• Cathie Wood's ARK Bets on Tokenization With a Stake in BlackRock-Backed Securitize (CoinDesk)
• US federal shutdown stalls crypto progress as SEC goes dark, TD Cowen warns (The Block)