Guidelines for cryptocurrency exchange development in Asian countries

Guidelines for cryptocurrency exchange development in Asian countries

The business of cryptocurrency has become huge over the years, and many people are looking to invest in the industry. If you are an investor looking to be a part of the cryptocurrency revolution or a company looking to invest in the cryptocurrency industry, by creating your own bitcoin exchange, away from the bottlenecks found in mainstream Europe and America, then you should be taking a good look at expanding into the Asia market. In this post, we focus on some Asian countries and how receptive they are regarding cryptocurrency.


Japan has always been receptive to the use of bitcoin and cryptocurrencies in general. In fact, it is the first country to regulate the crypto currency space in Asia.

In April 2017, the country’s Payment Services Act was re-examined in order to support the cryptocurrency business model. Once you satisfy the extremely demanding Japanese regulations, you can run your cryptocurrency exchange without much hassle. However, you should know that your white label bitcoin exchanges and investment are not valid until registered. You also need to obtain a Virtual Currency Exchange License with the Financial Services Authority (FSA).

The minimum capital required for your bitcoin exchange company, in theory, is JPY 10 million (approximately 93,000 USD); however, in practice, what the regulator is only interested in is to make sure that your operating capital is adequate for the size of your exchange. So far, any exchange with a reserve of at least JPY 50 million (approximately USD 500,000) will be regarded as eligible for business.

The Japanese FSA also demands strict compliance with their rules. The company must also make sure that they hire the proper staff that know about cryptocurrency systems as well as an external auditor. Your company’s crypto exchange software must be submitted to the regulators for verification and thorough analysis in order to make sure that it satisfies highest cybersecurity requirements. If non-Japanese nationals created the firm, then they must hire Japanese personnel. Most Japanese personnel in bitcoin exchange white label firms act as representatives who will be in charge of communicating with the regulators.

Each license application may take between six months to 1 year before it is ready to go through but the JFSA will usually approve or reject it within 2 months.

Thus, if you think you can run an exchange in the most developed and most competitive cryptocurrency market in the world, and you have the resources to satisfy all the requirements, including the high tax rate (Japan’s effective corporate tax rate is up to 34.60%), then you should be looking at Japan.


Labuan has evolved into a major hub for business and money in the Eastern continent because its laws are favorable to business establishments, its taxes are low, and it is entirely in sync with international standards on due diligence and transparency. Companies that establish in Labuan may have to pay a 3% tax or a RM 20,000 fee on their trading income.

For you to establish your exchange in Labuan, you must have made the right arrangements to effectively combat the risk of financial misappropriation, as well as counterterrorism expenditure. Your exchange will also have to scale through the rules and policies that are contained in the document created and monitored by the Bank Negara Malaysia, and the FSA of Labuan. The Labuan FSA must approve your bitcoin exchange business and must apply and obtain a Money Broker License.

If your system relies on a white label crypto exchange software, or any kind of crypto exchange software, it will be checked thoroughly to make sure it is compliant with the guidelines that deal with computer security risk management as issued by the LFSA. The Financial Service Authorities of Labuan will also carry out a proper test for all the promoters of the business as well as members of the management team.

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