Chainalysis: APAC Emerges as Crypto Adoption Hotspot
Central and Southern Asia and Oceania (CSAO) have emerged as global leaders in cryptocurrency adoption, according to the latest report from blockchain analysis firm Chainalysis.
The region accounts for seven of the top 20 countries in the company's Global Crypto Adoption Index, with India claiming the top spot.
The report, which analyses on-chain cryptocurrency value received between July 2023 and June 2024, reveals that CSAO received more than US$750bn in crypto asset inflows during this period.
This figure represents 16.6% of global value received, placing the region behind only North America and Western Europe.
Institutional Activity Drives Growth
Indonesia leads the region in terms of cryptocurrency value received, at approximately US$157.1bn.
The country's crypto market is primarily driven by trading activity, with more than a third of the value received by local exchanges coming from transfers between $10,000 and US$1m in size.
Barry Matthew Meyer, Product Manager at Pintu, an Indonesia-based cryptocurrency exchange, explains: “Indonesia's growing crypto market is primarily due to the novelty of crypto and the promise of quick profits — many people still see crypto as a speculative financial instrument.”
Meyer also notes that recent changes in Indonesia's stock market regulations may be contributing to the shift toward cryptocurrency. “The exchange is imposing more strict rules for a stock to be considered, which has affected users' sentiments on the Indonesian stock market and is causing them to look for alternative trading vehicles,” he says.
India's Regulatory Landscape Evolves
Despite regulatory challenges, India's crypto market continues to thrive. In December 2023, India's Financial Intelligence Unit (FIU) notified nine offshore exchanges that they were not compliant with the country's anti-money laundering laws.
However, this action appears to have had a limited impact on overall crypto activity in the country.
Vikram Rangala, Executive Director of ZebPay, an India-based cryptocurrency exchange and wallet provider, comments: “Now we're seeing that offshore exchanges will soon be brought into this emerging ecosystem.
“Earlier, we had a flight of investors away from Indian exchanges to global exchanges because of high taxes. I hope that, with regulatory clarity, we'll also get a more workable tax arrangement that promotes innovation.”
The recent decision by India's FIU to lift Binance's seven-month block, following the exchange's registration as a reporting entity, signals a potential shift in the regulatory landscape.
This move allows Binance to re-enter the Indian market, potentially paving the way for further growth in the country's crypto sector.
Singapore's Crypto Payments Market Gains Momentum
Singapore's crypto market, traditionally dominated by institutional activity, is showing signs of broader adoption.
The country has seen recent growth in crypto merchant services, with the total value received by these services reaching nearly US$1bn in the second quarter of 2024.
This trend is exemplified by the growing adoption of XSGD, a Singapore dollar-pegged stablecoin issued by StraitsX, a holder of a Major Payments Institution license in Singapore.
More than 75% of XSGD value transferred during the period studied took place in sizes of US$1m or below, suggesting strong retail activity.
The adoption of cryptocurrency for everyday transactions is also gaining traction in Singapore.
In March 2024, Grab, a Singapore-based super-app offering services such as taxi-hailing and food delivery, began accepting top-ups to its e-wallet via cryptocurrencies. Users can now make payments using Bitcoin, Ether, XSGD, Circle USD and Tether.
Regulatory Clarity Fuels Adoption
Singapore's recent regulatory developments may be bolstering confidence in the crypto market.
In August 2023, the Monetary Authority of Singapore (MAS) finalised its stablecoin regulatory framework, which includes new requirements for stablecoin issuers and details segregation and custody procedures for customer assets.
Additionally, Singapore's central bank implemented crypto custody and licensing requirements in April 2024.
This combination of regulatory clarity and merchant adoption suggests that Singapore is positioning itself as a major hub for digital assets, which could eventually attract more global businesses and investors.
Vietnam's Crypto Market Shows Resilience
Vietnam, ranking fifth in the Global Crypto Adoption Index, has demonstrated a strong appetite for cryptocurrency despite regulatory uncertainties. The country's high ranking is particularly notable given its relatively smaller economy compared to other top-ranking nations.
The Vietnamese crypto market is characterised by a mix of retail and institutional activity, with a growing interest in decentralised finance (DeFi) applications. This trend aligns with the broader CSAO region's leadership in DeFi adoption, as noted in the Chainalysis report.
Regional Implications and Future Outlook
As the CSAO region continues to lead global crypto adoption, regulators are working to keep pace with the rapidly evolving market.
The success of countries like Singapore in providing regulatory clarity may serve as a model for other nations seeking to balance innovation with consumer protection in the cryptocurrency space.
The growing adoption of cryptocurrencies in the region also has implications for financial inclusion.
In countries where traditional banking services may be limited, cryptocurrencies and blockchain technology offer alternative means of accessing financial services and participating in the global economy.
Claire Ching, Head of Institutional at Gemini, a centralised cryptocurrency exchange and custodian, concludes: “At Gemini, we are in the business of abstraction — it's our job to simplify the crypto-native know-how so that anyone with a mobile phone can safely access digital assets.”
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