All eyes on Asia — Crypto’s new chapter post-China

All eyes on Asia — Crypto’s new chapter post-China

From Singapore to Thailand, Hong Kong, and Indonesia: Asia’s crypto landscape continued to thrive, unabated by China’s sudden crackdown. Let's dive into this interesting article from Empirex Capital.

A fundamental trait of crypto is as an asset class that transcends jurisdictions. Yet, one of the key hubs driving adoption and innovation in Asia. Since the heady days of Korea’s Kimchi premium and Bitcoin (BTC) arbitrage opportunities, the region is playing a role in defining crypto’s development pathways and anchoring its future.

According to Chainanalysis’ report, in the first half of 2021, Asia was already the destination for 28% of the overall global transaction volume — $1.16 trillion worth of cryptocurrency. Central and Southern Asia alone saw crypto transactions grow 706% year-over-year, making it the world’s third-fastest growing region.

Last year, headlines from Asia were dominated by developments in China. However, the rest of the region was also abuzz, boosted by the halo of perceived legitimacy with regulatory clarity in Singapore around digital assets. The pace of decentralized finance (DeFi) innovation in Southeast Asia was buoyed with a step-up in fundraising and investment in projects. As investors become more comfortable and confident in DeFi’s yield opportunities, institutional adoption is well-poised to continue on its growth trajectory in 2022.

A new chapter, without China

China’s stance on crypto is not unexpected, given the country’s long-standing policy of capital control. While the pace of recent enforcement took many in our industry by surprise, players have — to their credit — adapted swiftly. Miners resettled in Kazakhstan and the United States, with exchanges and traders settling in Singapore and Hong Kong.

As a decentralized asset, crypto’s development and innovation are not limited to any single jurisdiction. Investment capital and talent flow to wherever there is a fostering environment, so countries with a welcoming regulatory framework that encourages innovation, coupled with progressive immigration policies, will be big beneficiaries.

Singapore, already a global financial service and wealth management hub, is a clear frontrunner — crypto has been regulated since 2019 under the new legislation. With that said, a high bar has certainly been set, with many players reportedly struggling to meet the stringent requirements of the Monetary Authority of Singapore.

While this might have dampened some initial optimism around Singapore’s crypto-friendliness, the city-state is still a leader when it comes to a progressive regulatory framework, underpinned by a pro-business environment with a low corporate tax rate, robust infrastructure, and political stability.

Asia’s other crypto rising stars

Outside of Singapore, Thailand has been buzzing with active participation from crypto startups and traditional financial institutions alike. Thailand’s fourth-largest bank — Kasikornbank — started experimenting with DeFi, on top of introducing recently its own nonfungible token (NFT) marketplace. The country’s oldest lender Siam Commercial Bank has also entered the game, having acquired a majority stake in Thailand’s largest digital asset exchange Bitkub. Meanwhile, the state-owned Tourism Authority of Thailand is exploring utility tokens, part of a payment ecosystem that negates the need for cash-based transactions.

Created on 8th Feb 2022