Southeast Asia Takes the Lead in Crypto Adoption
Blockchain technology is designed to be utilitarian, decentralised, and supports the future of money — cryptocurrencies. In our last news article, “Blockchain and Cryptocurrencies Offer Hope in a Volatile World”, we explore the use of cryptocurrencies as a last-resort alternative to fiat money, when banks fail to do what they’re supposed to do.
For the rest of the world, crypto adoption is not pushed by crises, and will take time because of a mixture of factors, like regulation and public perception.
Crypto adoption may increase after regulation becomes clear
We also talked about how crypto mining has become a legitimate business, with Russia being the latest nation to begin regulating crypto mining activities.
News about a country’s attempt at some aspects of the crypto industry is usually a good sign that further adoption will take place in that country. A clear regulation will boost confidence as crypto entrepreneurs and users can simply follow the rules and operate within them.
However, some cases in the real world have shown a contrary effect, where blurry crypto regulations do not stop traders and investors from buying and selling cryptocurrencies. We can see this in some Asian countries.
Asian countries are among the world’s top crypto adopters
It is interesting to note that based on this report by Finder, crypto adoption in many developed nations is significantly less compared to five countries in Asia. Vietnam, Indonesia, India, Malaysia and Philippines are countries with the greatest percentage of crypto adoption in the world.
Vietnam is currently in the lead with over 40% of respondents saying that they own cryptocurrencies, which equates to around 39.5 million individuals. On the other hand, only 8% of the United Kingdom’s total population holds cryptocurrencies, which translates to just 5.3 million people.
Unclear regulations may be the cause of mass adoption, right now.
The overall crypto market may as well be controlled by the top 5 Asian countries. We hypothesized that this is due to a softer nature of crypto regulations. For example in Indonesia, cryptocurrencies can be traded like commodities, but do not fall under securities law.
The focus of the Indonesian law concerning cryptocurrency is mostly geared towards the gateways — the platforms that are allowed to operate under the country’s commodities trading commission. On the other hand, cryptocurrencies are also not legal tender, and therefore the law makes it illegal for people to transact in cryptocurrencies.
Nothing else is further stated — there is no clear definition of what a transaction is, because market trading activity is technically a kind of transaction. The currently blurred and unclear regulation may be the reason why Indonesians, among others, are so confident at holding the asset.
Expecting more roller coasters ahead
On the road to mass adoption, cryptocurrencies will pass hands quickly when the next news comes along concerning a country’s move to regulate the crypto industry. We’ve already seen the effect of the crypto ban by the Turkish government in April this year, and China’s move to clamp down mining activities in May.
India is actively developing a more comprehensive bill surrounding digital assets. Earlier this year, a relatively huge sell-off of Bitcoin and many altcoins were the results of India’s first and abrupt move against cryptocurrencies.
When Vietnam and Indonesia, two large countries in terms of populations, decide to make a regulatory move on cryptocurrencies, we would expect many price corrections. Those who can manage to hold on can enjoy a future where Asian companies can hold cryptocurrencies and report them as part of their book value.