This is a guest post from Anupam Varshney
It is no surprise that the crypto industry has garnered tremendous attention in Asia, especially in countries like Singapore, Japan, and South Korea. Many of the world’s largest exchanges are based in Asia, and the growing individual wealth in Asia, mainly in China and South Korea, has been a driving force for the crypto market. Alternative investment opportunities have managed to attract many individual investors through higher returns than those available on the traditional market.
The blockchain market is growing rapidly worldwide, and it is predicted that global market size will reach $39.7 billion by 2025, with a CAGR of 67.3% between 2020 and 2025. Almost 20% of cryptocurrency’s market volume comes from countries in Asia, including both big institutional investors as well as average citizens. It is clear that Asian nations are betting big on crypto.
The reception of blockchain technology and the broader crypto market in Singapore has been striking. The country has welcomed the emerging technology with open arms and continues to build new policies that allow further innovation.
The Singaporean government has also reinforced its outlook by showing a willingness to experiment to find inventive solutions. For example, The Monetary Authority of Singapore (MAS) has been exploring the use of blockchain technology to clear and settle payments and securities for the past few years.
Through a collective effort with other government agencies in Singapore, the country has also developed OpenCerts, a platform that uses Ethereum smart contracts for issuing and validating digital certificates for graduates of local universities.
As far as regulatory efforts are concerned, the country has adopted a proactive approach to the crypto market by rolling out the Payment Services Act 2019 (PRS Act) which aims to regulate the intermediaries dealing with various cryptocurrencies, including a special focus on anti-money laundering and consumer protection. The Singaporean government and the global crypto industry have managed to find a middle ground to make the most of blockchain technology.
Apart from a few regions, the middle east has been quite progressive with regard to cryptocurrencies and blockchain technology and receives a warm welcome in the UAE. However, there are some mixed sentiments on the regulatory front.
Last year, the Securities and Commodities Authority (SCA) in UAE drafted a resolution on the regulation of cryptocurrencies, clarifying certain issues related to crypto projects in the middle-east.
The Dubai Chamber of Commerce also announced a partnership with Emirates NBD last year, one of the biggest state-owned banks in the UAE. The deal aims to assist the Dubai 10X initiative, which is working towards the digitization of trade processes. The project is called the “Digital Silk Road”, developed in partnership with Dubai Customs and the cargo handling service, DP World-UAE.
The UAE government understands the potential of blockchain technology and aims to use it for digital transactions by providing each customer with a unique identification number that redirects to their information on a secure chain. The UAE government is also pushing forward in an effort to build its own cryptocurrency. In October 2018, Dubai announced emCash, an encrypted digital currency that could be used as a mode of payment for government services and school fees.
- Hong Kong
Hong Kong has created its own Blockchain Ecosystem which acts as a bridge between blockchain startups and leading financial institutions in the region. However, cases of misappropriated assets and market manipulation have resulted in technical problems for many exchanges, forcing regulators from the Securities and Futures Commission to step in and curb the potential for fraud. By implementing regulatory actions, Hong Kong is striving to gain a reputation as a notable international blockchain hub.
The Hong Kong Science and Technology Parks (HKSTP) and Cyberport are the key contributors to the thriving cryptocurrency industry in Hong Kong. They provide support and assistance to various crypto and blockchain startups, helping the community grow and reach new heights. For example, in October 2018, HKSTP announced several new initiatives, better programs, and support services to strengthen and boost the growth of technology startups.
- South Korea
South Korea is one of the hottest regions for crypto and blockchain activities. Recently, the South Korean National Assembly unanimously passed the amendment to regulate cryptocurrencies. The new legislation gives a regulatory framework for cryptocurrencies and other related service providers. South Korea is also one of the top crypto trade exchange markets, making it one of the biggest hubs for crypto exchanges in recent years.
Large crypto companies like Kakao are working towards making their own cryptocurrencies along with some of the banks in the country. Two South Korean crypto exchanges, Upbit and Bithumb, are among the top exchanges worldwide, having a combined trading volume of over $200 million. Korean conglomerates like Samsung and LG have also invested heavily in blockchain technology. The country’s reshaped stance on cryptocurrencies has resulted in new investment opportunities and the rise of many new startups.
For the past few years, the crypto industry has struggled in India due to its central bank’s (Reserve Bank of India) recommendation to ban trading cryptocurrencies. However, this ban was struck by the Indian Supreme Court this year, and there has been an upsurge in the Indian crypto market since. Further, many crypto startups that had been forced to move their base of operations out of the country have returned.
The crypto market in India continues to attract investors from all around the world. Binance recently announced a $50 million fund to invest in crypto and blockchain startups in India. Earlier this year, India’s largest crypto exchange, CoinDCX, managed to raise $2.5 million from Polychain Capital and Coinbase Ventures, the investment arm of American crypto exchange, Coinbase. With startups in the country getting an official green light from the authorities, the future of cryptocurrency in India looks bright.
Applications of blockchain in Asia
New applications of blockchain technology have already started to emerge as the crypto industry continues to expand across the world. One interesting example, an Indonesian coffee chain, Blue Korintji Coffee, allows paying customers to identify the farmer who grew their coffee just by scanning a barcode. The company has mastered its coffee, supply chain, and logistics through blockchain-based solutions, which it has used to distinguish itself in a highly competitive market.
This kind of approach helps build trust amongst an otherwise disconnected group. The initiative was a product of a Singaporean startup, Emurgo, that partnered with Blue Korintji to make a premium product that increases returns to farmers.
Asian consumers can affect the global blockchain economy
Though the popularity of cryptocurrencies has been rising the world over, statistical data shows cryptocurrency trading platforms are becoming much more popular in Asia as opposed to the rest of the world.
Asia has a population of about 4 billion people, making it the most densely populated continent in the world. From a business perspective, this means more speculative investors are ready to take risks. According to a recent study, the average consumer in the Asia-Pacific region spends roughly around $10,000 to $100,000 per $1000 spent by people in the US. As various crypto exchanges continue to outgrow traditional stock exchanges, government officials believe cryptocurrencies could replace fiat in the future.
Crypto, a revolution to watch out for
Asia is set to become the global leader by adopting proper regulations along with better education and awareness regarding the subject. However, there are still many hurdles on the path to mass adoption of cryptocurrencies. Blockchain technology provides a great opportunity for people and institutions alike to engage with groundbreaking technologies, and potentially change the way we live and interact with the economy. However, caution and diligence should not be ignored while attempting to make the most of it.