Binance co-founder Changpeng “CZ” Zhao publicly backed an ASEAN-wide crypto license passporting system on July 28, 2026, arguing that firms authorized in one member state should face a lighter approval process to operate across the region. The proposal puts mutual recognition at the center of Southeast Asia’s crypto regulatory debate.
The idea matters because ASEAN remains a fragmented market for digital-asset firms. A working passport could reduce duplicate licensing costs, accelerate regional expansion and reshape how exchanges, stablecoin issuers and custodians manage cross-border compliance.
MiCA Becomes the Structural Reference Point
Zhao pointed to the European Union’s Markets in Crypto-Assets framework as a model for regional recognition. Under MiCA, a crypto-asset service provider authorized in one EU member state can passport services across the bloc after notifying its home regulator, making harmonized licensing a practical template for market access.
The ASEAN version would rely on mutual recognition rather than a single regional regulator. A firm licensed by one competent authority could receive streamlined approval elsewhere, while host regulators would still retain the ability to review, condition or reject access where standards are not met.
For crypto firms, the commercial appeal is direct. Repeating similar licensing processes across ten jurisdictions requires legal teams, local filings, compliance documentation and ongoing supervisory engagement, creating a high fixed-cost barrier to regional scale.
A passporting framework would shift that burden. Instead of rebuilding compliance from zero in each country, firms could focus on demonstrating equivalent supervision, robust governance and service-specific controls, making home-jurisdiction credibility a more important due-diligence factor.
For treasuries and institutional counterparties, the change would also alter onboarding. Rather than checking a patchwork of local licenses in every market, firms would need to verify whether the home regulator’s standards are accepted as equivalent across participating jurisdictions.
Political Coordination Remains the Hardest Barrier
Zhao acknowledged that implementation is less a technical challenge than a political one. ASEAN members have different legal systems, policy priorities and crypto risk tolerances, making regulatory sovereignty the main obstacle to passporting.
The most difficult issues are familiar: AML and CFT thresholds, KYC standards, capital requirements, cybersecurity expectations, fit-and-proper tests and consumer-redress rules. Without common floors, passporting could become a channel for regulatory arbitrage rather than upward harmonization.
Supervisory cooperation would therefore be essential. Regulators would need information-sharing systems, joint enforcement procedures, dispute-resolution mechanisms and protocols for suspending a firm’s regional access, making cross-border oversight as important as the license itself.
ASEAN does have narrower financial passporting precedents, including collective investment scheme arrangements and professional mobility frameworks in certain markets. Those models show mutual recognition is institutionally possible, even if crypto would require broader safeguards.
A staged rollout may be more realistic than a bloc-wide launch. Regulators could begin with a smaller group of jurisdictions or limited services, such as custody, exchange operations or stablecoin payments, before expanding passporting rights to more complex digital-asset activities.
For service providers, the interim period will require preparation rather than assumption. Firms should document governance controls, AML systems, custody procedures, capital resources and incident-response protocols so they can withstand multi-jurisdictional scrutiny if passporting talks advance.
For supervisors, the challenge is balancing competition with control. A passport could improve consumer choice and lower costs, but only if faster access comes with credible enforcement, shared standards and clear accountability for failures.
The proposal now turns ASEAN crypto policy into a market-structure question. If member states can agree on baseline rules, passporting could unlock a regional digital-asset market of more than 660 million consumers; if not, fragmented licensing will remain the cost of operating across Southeast Asia.
