Digital Asia: a big future for the world’s largest continent

Asia is home to 60% of the world’s population. Discussing mainstream adoption necessitates understanding what will happen here, especially in what pertains to India and China. These two countries alone can command change on a global scale with a legislative flick of the wrist. Yet they are hardly the only environments where change is happening.

We have written in the past about the US and Europe, in articles that we recommend you check out, and now it’s time to take a look at Asia.

Japan and Korea have been leaders from early on

Was Satoshi Nakamoto Japanese at all? Probably not. But this doesn’t alter the fact that Japan has been one of the most important players in digital currencies from the very beginning. By 2014, 70% of all bitcoin trading was happening through Mt. Gox, in Japan. That story did not end well, but the fact that Japan was so influential for digital currencies from the get-go is still very much relevant to the way it approaches this technology now.

11% of global volume trading of BTC happens via the Japanese Yen, which makes it one of the top 3 global markets. This is also due to Japan’s regulatory regime. It’s not particularly laissez-faire, but this has contributed to a healthy and high-standard environment, with many seeing it as one of the most welcoming in the world. The level of integration is such that Ripple settlements will be available in Japanese ATMs in the near future.

South Korea’s love for digital currencies absolutely matches Japan’s, however. Digital currencies came to the peninsula early, and adoption rates far exceeded any other country’s by 2017. Ethereum in particular is quite a South Korean obsession, with 40% of all trading happening through the country. 3 of the largest 5 ETH exchanges are also based in Korea. This enormous usage rate actually led to Korea paying more for digital currencies (particularly BTC) than anyone else, in a process that became known as the “Kimchi Premium”.

With Japan’s new regulatory framework and Korea’s government creating the Blockchain Technology Strategy, that will result in massive investment in the sector, it’s quite clear that these two nations will be leaders for the foreseeable future.

China wants to change that

It’s impossible to write about the future of digital currencies without speaking of China. We have brought it up several times ourselves.

There are several reasons to look to China for news about digital currencies. The Chinese government has already put in place a Blockchain-based Service Network, or BSN, that will empower Chinese technology companies to create and develop on-chain solutions all across the country. And even in more well-established currencies, like Bitcoin, China is out-mining everyone on the planet.

But the headline is certainly China’s reaction to Libra, the Facebook-backed project that wants to accelerate adoption. China has moved up their own plans for a state-backed coin to reinforce the Yuan. These plans are moving ahead full-steam, and testing has begun. If China succeeds, as they likely will, even if it takes a couple of tries, this could very well change the world of digital currencies. It is quite clear that China’s goal with this move is to challenge the USD’s dominance as the globe’s de facto global currency, and it’s quite unlikely that the world’s other powers won’t respond in kind. This could have massive implications not just for digital currencies, but for fiat as well, changing the way our economies work fundamentally.

India is following China’s lead

As we said, a digital Yuan could be swiftly followed by many others, and India is leading the pack. The Central Bank Digital Rupee is coming, and it’s coming to a reality in which central banks are forbidden from providing digital currency services, which will obviously implicate regulatory reform.

Of course, this regulatory reform isn’t exclusively going to affect digital currencies. India has put forth an ambitious plan for blockchain technology and its myriad applications, such as smart contracts. Current Indian law is deemed by experts to insufficiently address several of the plan’s key provisions. This means big change is coming for the subcontinent.

As is the case for China, it’s early days for India. Both these massive juggernauts are still lagging significantly behind Japan or Korea, but change is coming, and it’s coming in unprecedented, wholly new ways. It will be fascinating to keep up with these developments.

It’s not just the largest nations: Indonesia, Singapore, etc.

Indonesia is already discussing their own state digital currency. And so is Thailand. Singapore’s Temasek has joined Libra. Wherever you look in Asia, there’s new developments, headlines announcing change and adoption, and a scene that is very clearly still taking shape for most nations.

What does the future hold?

It’s very difficult to say. What appears clear is that change in Asia is being driven by national governments, much more than by grassroots movements or private enterprise. South Korea and Japan are, to a point, exceptions, but it will be interesting to see whether their governments will keep it that way when China and/or India’s programmes start coming into play. This means that mainstream adoption can happen much quicker, and with more profound effects on every country’s economies, depending on what the government’s strategies are. This also means that adoption may result in a very different landscape for digital currency and blockchain than it does in Europe or the US.

One thing we know for sure: Asian markets are becoming increasingly digital, and they are leading the spectacular global growth of eCommerce. Increased adoption of digital currencies, which is another powerful trend for the next few years will just strengthen this. Now is the time to enter this globalized market, because change is coming, and it is coming fast.

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