Crypto Can’t Regulate Its Way to Desire

In the ongoing conversation about mass adoption, regulation tends to dominate. It shapes headlines. It builds (or erodes) institutional confidence. It defines the legal scaffolding that underpins the industry. So it’s no surprise that regulation often gets treated as the thing that will finally unlock the next wave of users. The tipping point. The breakthrough moment. The cavalry.

There’s just one problem: regulation doesn’t make people want crypto. It makes people able to act on the desire they already have. And that distinction matters. A lot.

Drivers vs. Enablers: Two Very Different Jobs

Our recent study with CoinDesk uncovered something that should reshape how the industry thinks about adoption: most people aren’t sitting on the sidelines because of unclear regulation. They’re sitting out because they haven’t yet found a reason to get in.

Let’s be precise:

• Drivers are the psychological and cultural forces that spark demand. They answer the question: Why do I care about crypto at all?
• Enablers are the structural conditions that support action. They answer the question: How do I participate safely and confidently?

Drivers ignite interest. Enablers reduce friction. Confusing the two is like trying to light a fire by rearranging the fireplace.

The Data: Regulation Isn't the Real Barrier

In our study of over 4,000 consumers across the Asia-Pacific region, only 25% cited “regulatory uncertainty” as a barrier to adoption. That’s lower than risk and volatility (37%), concerns about security and fraud (33%), or even a lack of understanding (32%). Even in markets with strict or unclear regimes, like China and India, regulatory concern hovers around 30–35%. It matters—but it’s not the dominant factor.

And in Japan? Just 17% cite regulation as a barrier—yet adoption remains sluggish. Why? Because nearly half (47%) say they simply don’t trust crypto. This is the pattern: you can build the perfect bridge. But if no one wants to cross, the design doesn’t matter.

Regulation and Demand Don't Always Move Together

One of the most important lessons is this: the relationship between regulation and adoption is not linear or symmetrical. You can have high demand and unclear rules (see: early Bitcoin). You can have regulatory clarity and low demand (see: Japan). In some cases, demand creates momentum in spite of regulation. In others, regulation reduces friction once that momentum already exists. But regulation rarely generates the desire on its own.

What Happens When They Do Align?

While regulation doesn’t generate demand, it does act as a force multiplier once demand is present. As the user base matures—from risk-tolerant early adopters to cautious everyday users—things like trust, safeguards, and clarity matter more. In fact, 69% of APAC respondents agree that regulation is necessary to protect consumers.

Where we see real growth potential is in markets where underlying demand already exists—and is then supported by thoughtful, enabling frameworks. Take the UAE. Only 22% cite regulation as a concern. It’s a market where the population is open to innovation, and the regulatory regime is relatively supportive. The result: smoother onboarding, faster momentum, and the early signs of a crypto-forward economy.

The Takeaway for Founders, Brands, and Investors

If you’re waiting for regulation to spark demand, you’re pointing your telescope at the wrong end of the funnel. Here’s the better sequence: start with genuine demand—built on trust, clarity, and emotional relevance. Then amplify that demand with rules, protections, and reduced friction. Because when you invert that order—when you wait for frameworks before you build belief—you get stuck in an endless holding pattern.

Think of Regulation Like Infrastructure

Infrastructure is essential. But it’s not the reason people travel. No one books a holiday because the airport is well-regulated. They book because they want the destination. Good infrastructure just makes the journey possible. Crypto works the same way.

Demand First. Regulation Second. Adoption Follows.

The future of crypto adoption lies in understanding this dynamic: demand sets the conditions for growth. Regulation removes the barriers to scale. Together, they create real momentum. But you don’t start with the scaffolding. You start with the spark.

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