Think of Nandar, a young artist in Myanmar, harnessing her colorful digital art to share narratives of resilience and hope. By utilizing NFTs, she was able to make direct connections with collectors around the world and circumvent the censorship and economic turmoil surrounding her country. Crypto was her lifeline. Now picture that lifeline being slowly choked. Regulations from boardrooms located thousands of miles away are making the noose even tighter, and those CEOs likely couldn’t even find Myanmar on a map. This is the daunting reality that dozens of such artists have faced throughout Southeast Asia.

US, EU Rules A Global Straitjacket?

The United States and the European Union are forging ahead with comprehensive crypto regulations, aiming to protect consumers and combat illicit finance. Noble goals, of course. Are we considering the ripple effects? Are we doing enough to make sure these regulations aren’t unintentionally crushing the communities they’re meant to serve?

MiCA in the EU is certainly re-shaping the regulatory landscape. At the same time in the US, agencies such as the SEC and CFTC are vying for jurisdiction, making compliance a daunting task. While established exchanges like Coinbase and Kraken can navigate these complexities, what about the small, local platforms that serve as vital on-ramps for Southeast Asian users? And what about the artists who need these platforms to reach a global market?

Instead these regulations – largely originated during a post 9/11 national security panic – usually require severe Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. Sounds reasonable, right? Consider this: in many parts of Southeast Asia, formal identification is not universally accessible. Bank accounts, or access to them, are a luxury afforded only to some—not a universal right. For Nandar, and many more, these requirements are insurmountable barriers that become dealbreakers. In turn, they can’t benefit from the safe and regulated crypto ecosystem. Rather, undocumented immigrants like Kwame are driven further back into the shadows, where exploitation and fraud can flourish.

Even more unbelievably, it’s like trying to jam a square peg into a round hole. These rules, crafted for developed economies with developed financial systems, are being forced upon countries with completely different circumstances. It's regulatory colonialism, even if unintentional.

Tax Man Cometh, Artists Suffer?

Since the IRS treats crypto as property, every transaction, every NFT sale, is a taxable event. Brokers will be reporting these transactions directly to the IRS starting 2025. In theory, this promotes transparency. In reality, though, it generates a bureaucratic hellscape for artists based in countries with lower financial literacy and taxing bureaucracy.

Good luck if you’re trying to explain capital gains tax to somebody who can’t figure out how they’re going to put food on the table. Picture trying to comply with onerous reporting requirements, all in a foreign language. This unnecessary burden of compliance disproportionately impacts those least equipped to afford the burden, stifle creativity and innovation in the process.

We need to ask ourselves: are we building a financial system that empowers artists and creators, or one that punishes them for daring to participate? We ask Congress, is the pursuit of regulatory perfection really worth sacrificing the financial inclusion of millions? How much do we value protecting the established, but perhaps failing or exploitative, financial system over empowering individual artists?

Forgotten Voices Fuel The Future

I had a chance to connect with Rina, a digital artist from Indonesia who utilizes NFTs to support her community art projects. She told me, "The new regulations are scary. It feels like they are building walls around us. We are not criminals, we are artists trying to make a living."

This is the constituency that should be listened to. Hear the song of the makers, innovators and creators. In short, they are the ones who, like their counterparts in Maryland and New York, are truly creating the future of finance in Southeast Asia—not Wall Street lawyers or Washington lobbyists.

We need a different strategy – one that understands the specific challenges and realities of emerging markets. This means:

  • Tailored Regulations: Developing regulatory frameworks that are proportionate to the risks and adapted to the specific circumstances of each country.
  • Financial Literacy Programs: Investing in education initiatives to empower users with the knowledge and skills they need to navigate the crypto ecosystem safely.
  • Collaboration: Fostering dialogue between regulators in developed and developing countries to ensure that regulations are inclusive and equitable.

Disregarding the perspectives and experiences of Southeast Asian artists is not only a policy error, it is a profound moral failure. It’s a fundamental betrayal of the promise of crypto – that promise of financial inclusion, creative freedom, and economic empowerment.

We must do this work sooner rather than later, before these bad regulations become institutionalized and intractable. Join us in creating a future where crypto is a positive, empowering force, instead of just another techy tool of exclusion. Let’s ensure Nandar, Rina, and millions of other artists around Southeast Asia don’t get forgotten. Let’s make sure their voices can be heard, their needs are adequately met, and their dreams fully restored. We cannot allow fear and bureaucracy to kill the creative pulse of a community that has so much energy and opportunity. The world will be poorer for it.