Sei’s Regulatory Strategy in Japan
Sei, a Layer-1 blockchain, is making its move into Asian markets with a compliance-first approach. According to Lee Zhu, the network’s director of growth for APAC, Japan’s strict licensing regime has become the foundation for their expansion strategy. The blockchain secured necessary approvals in Japan last year, which enabled listings on major exchanges like Binance Japan and OKX Japan.
Japan’s exchange licensing process is known to be one of the most rigorous globally. For a Layer-1 blockchain to gain this approval so early in its development is somewhat unusual. Zhu mentioned that this regulatory clarity actually helps the team determine the best path forward and allocate resources more effectively. By staying compliant and responsive to regulatory changes, Sei aims to support further growth in the APAC region.
Institutional Integration and Tokenization
The institutional side of Sei’s strategy appears to be gaining traction. Circle’s native USDC deployment on Sei and tokenization efforts led by Apollo through Securitize are creating what Zhu describes as a “gateway” for structured products and derivatives. These integrations seem to lower friction for exchanges, though I’m not entirely sure how much of an impact they’ll have in practice.
What’s interesting is how Sei positions itself against competitors. Unlike Solana and Sui, Sei combines high throughput with EVM compatibility. Zhu claims this eliminates switching costs for the 90% of developers already coding in Solidity. That’s a significant claim, and I wonder if it holds up in real-world development scenarios.
Market Performance and Growth Areas
In Korea, Sei ranks among the top three by trading volume despite having lower market capitalization and total value locked compared to larger competitors. That’s a curious situation that suggests there might be something else driving adoption beyond just the usual metrics.
GameFi and SocialFi appear to be emerging growth areas for Sei. On some days, the network has actually outpaced Solana in daily active users. That’s surprising given Solana’s established position, but perhaps it speaks to specific use cases where Sei’s architecture performs better.
Balancing Institutional and Developer Growth
Zhu described the next 12 months as balancing two tracks: onboarding institutions through real-world asset tokenization and building a broader developer base in talent-rich hubs like Vietnam and Indonesia. He noted that while high throughput “is a filter” for institutions, without capacity, “you’re not even in the door.”
When asked about weathering market downturns, Zhu mentioned that the team was built during a bear market and operates with what he calls a “prudent, impact-focused” mindset. His comment that “in crypto, if you survive, you stand a bigger chance to be successful” feels particularly relevant given the current market conditions.
The strategy seems sensible on paper, but execution will be everything. Compliance in Japan is a strong starting point, but expanding across diverse Asian markets with different regulatory approaches will present ongoing challenges. The balance between institutional adoption and developer community building will likely determine Sei’s long-term success in the region.
