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From Singapore to Thailand to Indonesia, the crypto market in Asia is booming, unimpeded by China’s sudden crackdown.
In the first half of 2021, Asia was already the destination for 28% of total global transactions — $1.16 trillion worth of cryptocurrencies. In Central and South Asia alone, the volume of crypto transactions grew by 706% year on year, making it the third fastest growing region in the world.
Last year, Asian headlines were dominated by events in China. The pace of decentralized finance (DeFi) innovation in Southeast Asia has been supported by increased fundraising and project investment. As investors become more confident in the yield potential of DeFi, institutional adoption is well positioned to continue its growth trajectory into 2022.
China’s stance on cryptocurrencies is not surprising given the country’s long history of capital controls. Miners moved to Kazakhstan and the United States, while exchanges and traders settled in Singapore and Hong Kong.
Singapore, already a global center for financial services and wealth management, is the clear leader with crypto being regulated as of 2019 under new legislation.
Outside of Singapore, Thailand is active in the crypto space. Thailand’s fourth largest bank, Kasikornbank, has begun experimenting with DeFi, in addition to recently rolling out its own nonfungible token (NFT) marketplace. The country’s oldest lender, Siam Commercial Bank, has also entered the game by acquiring a majority stake in Thailand’s largest digital asset exchange, Bitkub. Meanwhile, Thailand’s state tourism authority is exploring utility tokens, part of a payment ecosystem that eliminates the need for cash-based transactions.
Indonesia, where over 66% of the population remains in debt, is an Asian market ripe for new use cases for cryptocurrencies. The volume of crypto transactions has grown tenfold, rising to $50 billion in October 2021. There are now more crypto traders on the Indonesian Stock Exchange than stock investors. Retail investors are drawn to the ease of trading cryptocurrencies in a country where all it takes is a smartphone with internet access and roughly $75.
The growing popularity of cryptocurrencies has not only led to a rise in the number of retail traders, but also to institutional investors such as hedge funds and family offices, who are now exploring the promising growth potential of the asset class. Asia is no exception, as large investors accounted for a significant portion of crypto transactions in the past year.
In the coming years, we can expect an increase in investment in Asian crypto projects. The increase in funding will boost innovation along with the adoption of cryptocurrencies as part of a virtuous cycle of value creation across Asia.
#Development #cryptography #Asia
