Cryptocurrencies have been picking up steam all over the world in recent years, but there’s no place where they enjoy more popularity than Asia. Although digital assets are famous for their decentralized nature that allows them to transcend national boundaries and jurisdictions, it appears that the Asian continent plays an increasingly important role in the development of the global cryptocurrency industry. 

This is nothing new since the region has always had a high rate of crypto adoption, embracing digital currencies long before other parts of the world started opening up to the idea. Blockchain technology and its applications or conducting an Ethereum price chart analysis are not a novelty for Asian investors. But Asia’s influence and contribution to the crypto space continue to increase with each passing year, establishing itself as a hotbed for crypto projects and investments. The number of individual and institutional investors in Asia who buy crypto keeps growing, although the industry is not precisely going through its best moment. 

According to a report conducted by Massari, half of the world’s cryptocurrency transactions take place in Asia. What’s more, six of the top ten largest crypto exchanges are located on the Asian continent, and Asian companies also dominate the futures market, accounting for 98% of ETH and 94% of BTC futures volumes. 

So, it’s interesting to explore the whys and hows behind Asia’s rise as a cryptocurrency trailblazer and see how different countries in the region play into it.  

Why Asia? 

It’s more than obvious that Asia is far ahead of other regions in the world when it comes to crypto adoption, but what’s not quite so clear is how it managed to gain such a huge advantage in such a short period of time. Although it’s difficult to speak for the entirety of the continent since there are vast differences between Asian countries in terms of culture, financial landscape, and regulatory bodies, we can spot a few factors that created an environment suitable for disruption and gave Asia an advance in the race. 

First of all, Asia has emerged as a global leader in tech and digital, being home to a large number of avant-garde start-ups, forward-thinking companies and a tech-savvy population that is eager for innovation. The widespread and growing access to fast Wi-Fi, the prevalence of e-payments and a high interest in gambling activities have also reinforced the region’s potential for digital innovation. On top of it, Asia also boasts some of the largest financial centers in the world, being a prime location for the development of financial services. 

On the other hand, the economic landscape in many developing countries in Asia has been dominated by tight government control, dictatorship, cash shortage and rapid currency depreciation. It is estimated that over 70% of Southeast Asia’s population is unbanked or underbanked, so the lack of access to basic financial services has made people a lot more open to alternative solutions such as Bitcoin and co. that circumvent traditional financial institutions.  All these elements combined have set the stage for the thriving crypto landscape that we’re witnessing today. 

Approaches to crypto adoption vary 

As we’ve already mentioned, Asia is a very diverse region, so even if digital currencies seem to be extremely popular on the continent, not all counties have embraced them equally. However, the prevalence of digital currencies has prompted Asian countries to take action and regulate this new asset class in one way or another, and each jurisdiction had to come up with its own solution to the challenge. This has led to a very fragmented regulatory landscape that can be quite difficult to navigate for stakeholders. 

Countries like China and Bangladesh have never been big fans of digital currencies, so they refused to integrate them into their financial systems, citing environmental concerns as a reason for their hostile approach. Both governments have declared cryptocurrencies illegal, banning crypto mining on their territory, as well as trading and other crypto-related services and activities. 

China has always had a rather problematic relationship with crypto. Back in 2013, they banned banks from processing crypto transactions. A few years later, in 2017, they introduced a new ban that targeted initial coin offerings (ICOs) and crypto exchange platforms and echoed throughout the entire crypto market. In the following years, regulations on crypto relaxed a bit, but they recently reverted to a full ban. 

At the other end of the spectrum, we have Japan, which is touted as one of the most crypto-friendly countries in the world and recognizes digital currencies as legal payment methods. Japan’s regulatory body, the Financial Services Agency (FSA), has set a few regulations in place for crypto payment services, but the rules are quite permissive for crypto users, with no restrictions on crypto ownership and investments. 

Singapore has adopted a similar approach, allowing crypto trading and possession. The country has long been a major supporter of blockchain technology and its use cases, so it comes as no surprise that they’ve been more than open about adopting digital currencies. However, they did impose a series of regulations recently regarding retail cryptocurrency advertisements as a way to safeguard investors against the market’s volatility and keep them from making risky investment decisions. 

India has had a difficult time deciding its stance on cryptocurrencies. In 2016, the country completely banned the use of digital currencies. However, they have recently revised their regulations and are now planning to introduce new ones under the Cryptocurrency and Regulation of Official Digital Currency Bill. This will allow exchange platforms to facilitate crypto sales, purchase and storage services if they comply with certain guidelines.   

And then there’s North Korea which has found a different use for crypto, employing it as a method to get around Western sanctions and fund its nuclear missile program. As with all actions that take place in North Kores, it’s still unclear where they stand on crypto regulation at the moment. 

Despite the contrasting views and attitudes on crypto, Asia remains a point of reference in the cryptocurrency realm, so it’s definitely a region to keep a close eye on in the future.