The regulatory capture debate on crypto has become a bit of a dog whistle. It continues to loop in an endless feedback loop in the echo chambers of Washington D.C. and Brussels. We already read about the revolving door between the regulatory agencies and large crypto companies. With the first we see the same old faces at every conference, couching their complaints in shadowy narratives of favoritism. This very myopic narrative could not be any more removed from the powerful, transformative crypto revolution that’s bubbling up across Southeast Asia. This power shift depends on the creativity and determination of our communities. They have long been pushed out of the formal financial system, and now they are seizing control from necessity.

Are we so busy watching the game being played in our own backyard that we're missing the emergence of a whole new league on another continent? This fear of regulatory capture, though real, mostly speaks to the concerns of established incumbents in the West. It’s a debate about maintaining the status quo, not about encouraging active decentralization and permissionless financial inclusion.

I’m Nandar, and I’ve experienced first-hand how crypto is improving lives across Southeast Asia. I’ve seen farmers in rural Thailand get loans without needing to go through predatory lenders who charge ridiculous interest, all thanks to DeFi platforms. Filipino artists have started minting NFTs to help pay for their artistic endeavors. Now they’re escaping captivity from the gatekeepers of the old, established art world! These aren’t hypothetical cases being argued in sterile corporate boardrooms—they’re real people and real stories.

Take the Philippines, a country where play-to-earn (P2E) games such as Axie Infinity skyrocketed in popularity during the pandemic. For countless Filipinos, these games weren't just entertainment; they were a lifeline, a source of income that helped them feed their families when traditional jobs vanished. Was this a perfect system? No. It showed the world what crypto can do — to empower people and communities in ways that finance can’t.

Or consider the case of Indonesia, where the majority of the population is still unbanked. DeFi solutions are providing new avenues to credit and savings experience for millions of people. These individuals have been historically marginalized to the financial institution. These ideas aren’t just nice, cutesy concepts, they’re powerful tools. They provide real opportunity and security by helping people make fuss about the future they want for themselves and their children. Thailand, a country known for its rich culture, is adopting NFT to support artists.

Trying to establish one big regulatory tent that’s entirely built on Western norms and values is the best fit for crypto is seriously misguided. This approach is dangerous for the industry for another reason. We require regulatory models that allow creativity and flexibility to be customized to the unique needs of each area. These models must put access and education first—not the interests of profitable, entrenched corporations.

Brandon Ferrick's argument that the SEC's openness to public input suggests a lack of regulatory capture is, frankly, a bit tone-deaf. Though public forums, roundtable discussions, and other forms of stakeholder engagement are important, these conversations do not always result in actionable change in the field. And they most definitely do not put a dent in the inequity of power that is clearly embedded between big businesses and average users. It is easy to schedule meetings with the SEC when you have an army of lawyers and lobbyists at your disposal. But it’s a different story when you’re a farmworker in rural Vietnam just looking to make sense of the DeFi landscape.

Instead, let the focus be on communities—not corporations. Insufficient funding to invest in education and infrastructure is unacceptable. In addition to making room for experimentation and innovation in regulatory sandboxes, we must encourage collaboration among developers, regulators, and community members. Diversity isn’t enough—listen directly and actively to advisory groups from those most impacted by these technologies. Instead of just hearing out the loudest people in the room, give some airtime to those who have been made quiet.

We need to give space to and strengthen non-Western narratives and leadership that take up the opportunities afforded by crypto. Now, we have to continue funding Southeast Asian crypto projects and push for regulatory frameworks that are more inclusive. What we really need to recognize is that the future of crypto should not focus merely on protecting the business models of the incumbents. It’s about creating a more decentralized, equitable financial system that serves the interests of all people.

So, don’t let the fear of regulatory capture turn you away from the transformative potential that crypto has across all of Southeast Asia. The fate of crypto going forward is very much up for grabs. Join us in ensuring it’s inclusive of all—especially the smallest! The wonder of experiencing people empowered that is a greater and uplifting thing than the fear of experiencing regulatory capture.

Empower Communities, Not Corporations

The focus should be on empowering communities, not corporations. That means investing in education and infrastructure, creating regulatory sandboxes that allow for experimentation and innovation, and fostering a culture of collaboration between developers, regulators, and community members. It means actively seeking out and amplifying the voices of those who are most affected by these technologies, not just listening to the loudest voices in the room.

What's next? We need to challenge the dominance of Western narratives in the crypto space. We need to support Southeast Asian crypto projects and advocate for more inclusive regulatory frameworks. We need to recognize that the future of crypto is not just about protecting the interests of established players, but about creating a truly decentralized and equitable financial system for all.

  • Support Southeast Asian Crypto Projects: Invest in and promote innovative projects emerging from the region.
  • Advocate for Inclusive Regulations: Demand that regulators consider the unique needs of developing nations.
  • Challenge Western Dominance: Question the narratives that prioritize Western perspectives and interests.

Don't let the fear of regulatory capture blind you to the transformative potential of crypto in Southeast Asia. The future of crypto is open, but it's up to us to ensure that it's a future that includes everyone. The awe of seeing people empowered is far greater and important than anxiety of seeing regulatory capture.