How the demand for cryptocurrencies like Bitcoin have increased in Asian region and their reasons for growing adoption of cryptocurrencies.
Some Asian countries play a leading role in the cryptocurrency assets, and they are poised to be even more influential in the future. The level of successful cryptocurrency adoption by Asian countries such as India, Singapore, and China will significantly influence the worldwide adoption of cryptocurrencies.
The Rising Demand for Cryptocurrencies in Asia
With the coronavirus pandemic continuing to affect the world's economy, many uncertainties remain. Regardless, a trend that has been highly recognized is that of cryptocurrency mass adoption amid the pandemic. One of the leading issues facing the adoption of cryptocurrencies and implementation of blockchain technology has been the government's hesitation in laying down rules governing or establishing legal compliance around cryptocurrencies.
Nevertheless, the increasing demands for cryptocurrencies in Asia and worldwide are forcing governments to lay down appropriate regulatory guidelines. A recent study implies that the year 2021 could be the year crypto adoption reaches new levels.
Crypto was once recognized as an exclusive instrument for tech-savvy users, but it has now grown trendy. According to Statistica, as of February 22, there are approximately 68 million blockchain wallet users globally, almost equal to Thailand's total population. Interestingly, a latest study shows that all these users are spread over all people, with 42% being 45 years and above and 7 percent of all the female respondents claiming they hold crypto assets.
How Crypto is Growing as a Payment Method in Asia
Asian nations, China, Singapore, and others are in the midst of the technology arms race. Right now, nobody can deny that digital payments are the future, and this future will be composed of cryptocurrencies. The COVID-19 pandemic that has swept across the world, ravaging financial markets and the economy over the last 12 months, has proved the significance of digital payments.
Asian nations have opted to establish a framework that will effectively legitimize digital assets to stamp their status as global finance and technology leaders. For instance, China is on track to be the first country in the world to issue a central bank digital currency (CBDC) to the public. Japan's blockchain industry is also growing at a rapid scale. A study indicates that the sector has grown by over 30% since 2019.
The Asian region has been leading in consumer adoption of fintech and crypto products. According to a study conducted by Ernst & Young, China and India, the most populated nations globally, over 50 percent of adult consumers online claimed that they often use financial technology services.
Apart from embracing crypto as asset investments, Asian countries have also implemented innovative crypto and blockchain technology, with opportunities for expansion. Here are a few reasons why it already is and is growing into a cryptocurrency focal point.
1. Utility tokens over platforms
South Korea is more focused on altcoins and the issuance of utility tokens, providing crypto projects with a great platform to trial the applications of cryptocurrencies. The region is set to experience rapid cryptocurrency adoption, given the fact that over 30 percent of convenience stores in the country already accept crypto as a payment method. Japan is another Asian country that is switching its attention towards altcoins following the recent BTC market caps.
The Asian investing culture is much youthful and prefers to actively trade digital assets to HODLing them, like the westerners who buy and hold. Besides, the American and European markets are cautious about altcoins. Additionally, altcoins provide opportunities to invest in new blockchain projects, with many startups offering initial coin offerings (ICOs). Altcoins are proof that the Asian region is focused on building applications and not platforms.
2. Digital adoption
Asians are more comfortable conducting all their daily business through mobile phones, including making payments, booking tickets, borrowing loans, accessing public services, and many more. This creates an excellent climate for cryptocurrency adoption to expand and accelerate since the people in the region are already accustomed to such digital technology.
3. Major crypto exchanges
Asia is the home of some of the leading crypto exchange platforms in the world. Even though Japanese regulators are more conservative with their crypto policing, and China only allows C2C trading, Asian crypto exchanges trade at a frequency four times bigger than those in the United States.
To cater to the growing demand of crypto assets in Asian countries, XanPool offers a regulated and intuitive platform to buy and sell cryptocurrencies. The XanPool's dashboard allows users from countries like India, Thailand, the Philippines, Singapore, and more to access prominent cryptocurrencies like Bitcoin with their local currencies in their favourable payment method.
4. Opportunity for the unbanked population
Cryptocurrencies provide an excellent opportunity to the unbanked population. The majority of Philippians rely on cryptocurrencies. Majority of the Filipinos who lost their jobs due to the coronavirus pandemic relied upon NFT games on the Ethereum network to generate income.
The Asia-Pacific region is arguably leading the race of cryptocurrency adoption. According to a report by Chainalysis, the East Asia region, the largest cryptocurrency market was responsible for 31 percent of all the crypto transacted during 2020. Addresses based in the region received $107 billion in cryptocurrencies during that period, representing 77 percent more than Eastern Europe, the second-largest cryptocurrency market.
Singapore has established itself as a world leader when it comes to cryptocurrencies and financial technology. Singapore became the first nation in the world to lay down a legal framework for crypto, allowing both consumers and businesses to operate freely in the country. Such broad moves by governments and authorities help establish confidence and trust in a once associated sector with frauds and scams.
With cryptocurrencies attracting a lot of interest, governments need to step in quickly and establish a regulatory framework. This will help cryptos achieve their full potential, and we can take advantage of the vast benefits they bring along to Asia and the world at large.