Self-regulation versus government control in the crypto industry an institutional economics perspective

The rapid development of the cryptocurrency industry has challenged traditional regulatory frameworks worldwide. In Asia, particularly in Japan, regulators have sought to balance innovation with investor protection through hybrid approaches combining state oversight and industry self-regulation. This paper explores the interplay between self-regulation and government control in the crypto sector from the standpoint of institutional economics. It argues that institutional trust, historical path dependency, and market maturity shape the effectiveness of each model and that Japan’s experience offers a unique case study of institutional adaptation in the digital economy.