Advancement of Digital Currencies and Blockchain in Asian Countries
The market is presently in a transformation phase. Following Coinbase’s IPO, a flood of institutional investment pushed its cash balances beyond $4 billion. Investor faith in cryptocurrency is now causing a revolution in the powerful economy. But, first and foremost, we must shift our attention to Asia’s rising economies, lest we miss out on a burgeoning crypto market transformation.
Let’s look at how digital currencies and blockchain are explored by Asian countries.
Rising blockchain technology adoption in Asia
Asia has stayed ahead of the blockchain craze. Asia is crucial to the blockchain ecosystem, from cryptocurrencies to block creation. The region’s blockchain support capability continues to grow. Kazakhstan has recently risen to third place in worldwide bitcoin manufacturing, indicating a rise in use in Asia.
By 2023, Asia is expected to control a significant chunk of the blockchain market, worth $23.3 billion. Countries such as Singapore, Malaysia, Thailand, and Vietnam are revising their legislative frameworks to fit the quickly growing nature of blockchain technology. According to BusinessWire, governments in Southeast Asia are improving their regulatory environments in order to get the most benefits from various blockchain applications.
In its new rules, the Bank of Thailand, for example, appears to favour blockchain. With its recent directive, the bank seeks to foster financial innovation while still managing risk. Singapore used blockchain technology to verify the Covid-19 outcomes earlier in 2021. In addition, regular gatherings in Asia foster the development of more innovative blockchain applications.
Changing Dynamics of Asian countries Towards digital currencies
Thailand’s and China’s central banks are looking at the possibility of adopting cryptocurrency into their respective economies. Benefits such as seamless asset transfers across borders are driving bitcoin growth.
Similarly, adding cryptocurrency into current blockchain systems boosts their efficiency. Mobile payment solutions are already being used by Asians. Adoption of cryptocurrencies improves convenience and expands solution alternatives. With the rise of crypto mining in Asia, we may expect to see a more diverse application of cryptocurrencies.
With blockchain, you can track and trace assets in a variety of ways. The technique allows unparalleled control over currency issuance.
There is a contrast between digital currencies and blockchain-based cryptocurrencies. Most money is now digital, existing only as database records. The amount of physical currency in circulation is measured differently from the amount held in bank accounts or elsewhere.
So far, most central banks have regulated mobile payments for individuals and enterprises. This vast industry is driven by both mobile network operators and banks. In 2019, China’s mobile payment market surpassed 347 trillion RMB (US$53.04 trillion), over four times the country’s GDP. Due to the epidemic, total transaction value increased in 2020.
As digital technologies evolve, Asian central banks seize the potential.
Thailand is a leader in digital payments, focusing on instant interbank transfers and point-of-sale payments using QR codes, mobile and account numbers. The Bank of Thailand endorsed the ‘PromptPay’ project in 2017 and urged Thai banks to reduce cash usage to save money. PromptPay is utilised by small retailers who no longer need to handle cash.
One of the first Asian central banks to do extensive technical investigations on domestic cryptocurrencies was the Monetary Authority of Singapore (MAS). ‘Project Ubin’ investigated domestic and international clearing.
Since banks and cards are rarely used in China, the country has pushed digital rapid payment and QR scanning. Both AliPay and WeChat Pay claim almost 1 billion active users, posing a systemic risk if either failed. But what about a central bank digital currency? Central bank digital currency can prevent money laundering by increasing competitiveness and reducing risk in mobile payments.
Despite repeated rumours, Singapore’s central bank has yet to formally unveil its digital currency plans. For increased financial inclusion, both China and Cambodia have established cryptocurrencies.
The NCB introduced Bakong in October 2020. This service allows for payments in either Cambodian riel or US dollars. Bakong apparently has over a third of Cambodians on board (5 out of 17 million). The low entry barriers improved financial inclusion, which might have a meaningful impact on economic activity.
The People’s Bank of China has been working on creating the world’s first large sovereign digital currency, the digital yuan, since 2014. It should be easy to sell to consumers used to quick digital cash, allowing the government to control the quantity of non-cash monies available to the economy. Customers may already receive digital yuan from banks in major cities including Shenzhen, Chengdu, and Suzhou.
But Asia as a whole lags
It is predicted that the Indian parliament would soon pass a law regulating cryptocurrency, possibly outlawing all private coins and allowing the RBI to issue its own. The Philippines, which introduced Smart Money in 2001, has not capitalised on its early lead. Larger ASEAN countries like Indonesia are not leading. ‘No haste over digital currency,’ according to the Jakarta Post.
Over 80% of central banks throughout the world have experimented with cryptocurrencies. China, along with Cambodia, is leading the world in central bank digital currency implementation. More Asian central banks may be forced to produce digital currencies, given their potential as reserve currency in international trade.
Investors in digital payment systems and central bank digital currencies will soon enjoy the rewards. Their economic activity will undoubtedly rise due to practical simplicity of use and time, cost, and effort reductions. Unless other countries follow China and Singapore’s lead, they risk being left in the monetary dark ages.
RS Growth — Thriving Take on Asian Markets
While promising, Asian cryptocurrency marketplaces are still in their infancy. Given the different regulatory regimes across individual countries across such a wide continent, disagreements are bound to develop. RS Growth is building a legal ecosystem for businesses and individuals who need to run their businesses efficiently.
RS Growth has a large partner network, which is critical for the success of blockchain technology. Our network effect benefits users directly, resulting in continued platform expansion.
About RS Growth
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