Blockchain is driving economic growth in SE Asia — Here’s how
Southeast Asia’s top emerging markets are driving blockchain growth for financial inclusion
Indonesia, Malaysia, and the Philippines came out on top on Bloomberg’s Emerging Market (EM) Scorecard released two weeks ago. The scorecard presents not only these three countries, among other emerging economies, as safer and more profitable destinations for investments, but also possibilities for Southeast Asia, which has been in the limelight for its rapid economic growth as a region.
What is interesting is how the macroeconomics covered by the scorecard interplay with the region’s equally robust development of blockchain solutions, and how blockchain can potentially further the growth of these economies. In a region where tech startups received a record 7.8 Billion USD in investor funding last year, digital technologies and the startups developing them are becoming more and more critical to national economies in the region.
Balance is the name of the game
Bloomberg’s Emerging Market Scorecard rates economies based on a range of macroeconomic metrics categorized into three ratings: Gross Domestic Product (GDP), safety, and valuations. These three scores are meant to give investors a forecast of how safe and profitable it will be to invest in selected economies given historical data.
The ideal situation is for an economy to have a safe environment, fast growth, and balanced valuations. Amidst emerging markets suffering “their biggest back-to-back monthly slump since 2016” according to Bloomberg, these three Southeast Asian countries coming out strong on the EM scorecard is a positive sign for investors to look further for opportunities in the region.
Blockchain as an investment opportunity
Blockchain is one such investment opportunity that is taking precedence in Southeast Asia. With the technology’s go-to financial applications, the security and speed offered by blockchain for long-distance transactions stands to benefit a region where the remittance industry is worth 128 Billion USD and less than 25% of the population owns a bank account. With this need for financial inclusion in the region, tech startups like TraXion are using blockchain to create solutions like TraXionPay and TraXion Wallet.
Technology creates a greater impact when investments are going into the businesses and institutions developing them. Also, investments are more likely to come in economies that offer a healthy mix of stability and growth.
Blockchain is no exception, and when it comes to Southeast Asia, with tech startups at the helm of development and emerging markets in the region registering balance and growth, the region is poised to be the destination for blockchain development.
Bringing the macroeconomics home
The three economies that topped the EM scorecard are perfect examples of the growing potential the region has with blockchain:
With 3 Billion USD venture capital received in 2017, Indonesian startups are leading the country’s blockchain ecosystem, supported by the government and the Asosiasi Blockchain Indonesia (ABI). Malaysia recently saw the formation of its own blockchain coalition to support initiatives for adoption, including the installation of Crypto-Trading Machines (CTMs). In the Philippines, partnership are also key, with banks bringing blockchain pilots to the countryside and the establishment of the Blockchain Association of the Philippines last month.
In the end, it’s all about ensuring that the macroeconomic gains reflected in indicators like the EM scorecard are felt by everyday people. TraXion is working towards this through the development of a blockchain-based platform that will combine various solutions, including already existing ones like TraXionPay, TraXionWallet, and Parachure. This platform has the potential to bring financial inclusion not only to the 89 million unbanked and underbanked in the Philippines, but also SE Asia and then, the world.
