Below is a guest post from BTSE CEO Henry Liu.
When it comes to grassroots retail cryptocurrency adoption, Asia is a prominent global leader.In fact, Vietnam surpassed Chainalysis’ crypto geography for 2022 reportBut for traditional Asian financial (TradFi) institutions, it’s a different story. Banks and financial institutions on the world’s most populous continent have lagged behind their global peers in adopting blockchain technology.
With such a massive wave of innovation and adoption within the APAC region, it may now be impossible for TradFi to adopt Web3. A bear cycle has proven to be the perfect time to build, and TradFi agencies may be left completely stranded before the next bull market arrives.
Let’s start with the payment side. This infrastructure is essential for cryptocurrencies to become truly mainstream. As a general trend, the TradFi payments giant usually partners with crypto-native companies, with licensed financial institutions operating in the background.
The crypto world hears about new payment partnership announcements every other week in western markets. For example, consider recent news. Brazilian Binance and Mastercard Prepaid Crypto Cardsagain Huobi and Solaris Launch Crypto-to-Fiat Cards in EUOn the other hand, development in this area lags significantly in Asia.A strong example is Mastercard’s proposed initiative Based in Thailand BitKubbased in Singapore amber groupand Australia-based coin jar, announced in 2021.But only the latter of the three bear fruitThis demonstrates the low success rate of such partnerships in the region so far.
Next, there are regional differences in terms of investment. The Hong Kong Exchange and Clearing recently broke new ground in December 2022. Asia’s first cryptocurrency ETFBut these early steps came more than a year after the North American exchange opened. similar products According to a recent report by Accenture, “Two-thirds of Asia’s wealth management firms We do not plan to offer any form of digital asset proposalInstead, the report notes that Asian crypto investors are turning to online forums for advice.
To further underscore this situation, traditional Asian companies are lagging behind even the usual digital transformation. According to a Broadridge report, APAC companies lagging behind in almost every metriclooks at the impact such firms have on the financial institutions that serve them.
However, it would be remiss to ignore TradFi’s few bright sparks in the Asian crypto scene. His DBS Bank in Singapore consistently tops industry polls for innovation in blockchain applications. In Thailand, Siam Commercial Bank demonstrates his firm commitment to Web3 through his SCB10x unit. Union Bank Philippines Malaysia’s Kenanga explore Above all, space. But overall, there are few examples of domestically grown Asian TradFi leadership in cryptocurrencies.
Chance for Leapfrog?
Against this backdrop, Asian emerging markets are seizing the opportunity to leapfrog the developed world’s dominance in TradFi. Many players aim to develop his Web3 ecosystem and crypto-financial system unique to the region, whether his TradFi is on board or not.
For example, take a look at an Indonesian cryptocurrency-focused investment app Pintu, was created amid the country’s pandemic-related app boom. And, of course, there’s the world’s biggest GameFi success. Axie InfinityDeveloped by Vietnamese studio Sky Mavis and driven by Vietnam’s rich pool of talented engineers. Another notable example is the way Hong Kong-based Animoca Brands is approaching its venture capital through partnerships with various Web3 native companies.
Another expression of this hope is the growing regional interest in Central Bank Digital Currencies (CBDC). Laos recently started trials with a Japan-based blockchain firm, but this is just one of his 35 countries. Investigating CBDC Initiatives in AsiaPerhaps certain central banks in the region are considering skipping the arduous process of upgrading their local TradFi infrastructure and going straight to blockchain.
The question that remains for us is whether traditional institutions in the region want or need to catch up with their Western peers in Web3 adoption. Asia already has massive grassroots adoption of cryptocurrencies, as well as the dominant crypto-native companies in their respective fields.
In short, the Asian crypto scene now has enough momentum to develop on its own, from consumer adoption to infrastructure development to investment. So if his TradFi in Asia needs a piece of his Web3 pie, he’ll have to catch up by the next bull market. Otherwise the Web3 ecosystem may not need them at all.