Crypto Is Booming in Asia: Here Is The Reason Why
The Asian economy is expected to become the next focus for the world economy as the economic growth rate in Asia has been positively stable in the last few years. Besides some Asian countries with strict policies on cryptocurrencies, others still facilitate the development of blockchain companies. That makes this place a good playground for crypto. In this article, Tokenize Xchange will be discussing the reason why the crypto market is booming in Asia recently.
Besides blockchain projects that have created a big buzz lately like Axie Infinity; Asia, especially Southeast Asia has become a rich land for cryptocurrency exchanges to thrive no matter the recent downtrend and Bitcoin crash. Some global exchanges are also expanding their markets to Southeast Asia. On the other hand, Singapore-based crypto trading platforms like Tokenize Xchange have reached their peak in 2021, with achievements in market capitalization.
So, what is the reason for cryptocurrency’s move toward Asia market?
Asia: the rich land for cryptocurrency
A recent Chainalysis report shows that between June 2020 and June 2021, Asian markets accounted for $43 percent of all cryptocurrency activity worldwide, equivalent to $296 billion in transactions. The fourth-largest cryptocurrency market in the world, Central and Southern Asia and Oceania, experienced a 706 percent growth in transaction activity during the same period.
Southeast Asia has been a hub for payment activities for a while. The region has experienced a huge increase in the number of crypto companies, exchanges, and peer-to-peer activity, which is not surprising. In Southeast Asia, there are more than 600 blockchain companies currently headquartered. Crypto projects have raised nearly 1 billion dollars in 2022 so far.
The population of the Southeast is also the second largest in Asia, with more than 680 million people in 2022, accounting for 8.58% of the world population, according to Worldometers. The median age of Southeast Asians is around 29 to 30. Therefore, the majority of the population belongs to a young and dynamic age group, making them suitable to become a human resource for the development of the crypto industry.
Friendly policies on cryptocurrency
Cryptocurrency is proving it will be the fastest-growing financial field in the world. To take advantage of that opportunity, Singapore has enacted various friendly policies with the ambition of becoming a global cryptocurrency hub.
While China firmly banned Bitcoin mining or Japan only allowed dedicated cryptocurrency funds, Singapore does not approach the problem by banning or inhibiting the development of blockchain companies. The Monetary Authority of Singapore (MAS) solves the issues through friendly regulations to reduce risk.
According to KPMG’s Pulse of Fintech report, Singapore recorded a tenfold rise in crypto investments and related fields last year, worth $1.48 billion, compared to $110 million in 2020. It is a considerable result thanks to the efforts of Singapore authorities.
‘But not to get into this game, I think risks Singapore being left behind. Getting early into that game means we can have a head start and better understand its potential benefits as well as its risks’ said Menon, head of MAS.
Singapore has taken a cautious stance, nevertheless. The MAS released guidelines in January stating that crypto service providers in the city-state should not advertise their services to the general public. MAS has just rejected more than 100 applications from cryptocurrency companies looking to set up.
MAS also regulates cryptocurrency businesses operating in Singapore, but the new law also gives the financial officers the authority to inspect how crypto service providers operate in other countries and to support foreign regulatory bodies and agencies during investigations.
Although the recent instability of the crypto market has made Asian countries, especially Singapore, tighten crypto operations. But with a long-term orientation, Asia will still be a promising land for the development of blockchain companies. Don’t forget to follow Tokenize Blog for more interesting information in the crypto market.
Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.