| Author: | Huang, Shuojun |
| Title: | The impact of cryptocurrency regulation on cryptocurrency activities : a cross-country study |
| Degree: | DFinTech |
| Year: | 2025 |
| Department: | Faculty of Business |
| Pages: | iii, 288 pages |
| Language: | English |
| Abstract: | As digital assets become increasingly integrated into the global economy, a central debate has emerged: does government regulation stifle cryptocurrency innovation, or is it a prerequisite for mainstream adoption? This study moves beyond theoretical arguments to empirically investigate this question by analyzing the relationship between the maturity of a country's regulatory framework and its level of public cryptocurrency engagement. To conduct this analysis, this research first develops a novel, composite Regulatory Maturity Index. This index quantitatively assesses regulatory development across seven key dimensions—the general framework, AML/CTF rules, Travel Rule compliance, taxation, and specific rules for Security Token Offerings (STOs), ICOs/IEOs, and stablecoins. Using a rigorous Delphi method with a panel of global legal and compliance experts to ensure objectivity, scores were assigned for 56 countries over the period of 2019-2023. Our quantitative analysis of this data finds a significant and positive overall relationship: jurisdictions with more mature regulatory frameworks consistently exhibit higher levels of public crypto engagement. This suggests that, on the whole, regulation acts as an enabler, not a barrier, by creating a safer and more reliable environment for users and investors. However, the findings reveal a critical nuance. We identify two distinct "faces" of regulation with opposing effects. "Enabling" regulations, such as the establishment of a clear legal framework and rules for STOs, are strongly and positively associated with market growth. In contrast, "constraining" regulations that impose high operational friction, such as certain implementations of the Travel Rule and AML/CTF requirements, show a negative correlation with public engagement. Furthermore, the analysis shows that the positive impact of regulatory maturity is more pronounced in less developed markets, where legal clarity serves as a powerful catalyst for building trust. |
| Rights: | All rights reserved |
| Access: | restricted access |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| 8374.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 1.56 MB | Adobe PDF | View/Open |
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