The crypto and blockchain industries have made significant headway in becoming functional sectors around the world. However, in some parts of the world, such as Southeast Asia, there is a greater tendency to welcome these financial and technological advancements.
The Southeast Asia region was highly represented in Chainalysis’s 2023 global crypto adoption index, with countries such as Vietnam, the Philippines and Thailand on the brink of a crypto revolution.
With five countries in South and Southeast Asia being among the global top 10 for crypto adoption, Cointelegraph spoke with Nathan Kim, marketing director at Unopnd, who is spearheading Southeast Asia Blockchain Week, to understand more about the region’s rise in prominence and friendliness toward the industry.
Countries at the forefront
Located in the heart of the region, Thailand, in particular, is at the forefront of blockchain adoption across various industries and supporting blockchain-based projects.
Kim commented that Thailand’s “commitment to fostering innovation” has made it a “key player” in the regional blockchain scene.
Singapore is another country seen as a global leader in the overall Web3 space. In 2023, its central bank committed $112 million to support local fintech solutions from emerging Web3 technologies.
During the last year, Singapore even saw many of the world’s major crypto platforms, such as Blockchain.com, Circle, Crypto.com and Coinbase, apply for licenses to operate in the country.
In June, both Japanese and Singaporean regulators joined forces on the regulation and pilot testing of cryptocurrency projects in accordance with the latter’s Project Guardian initiative.
Nonetheless, Kim said countries in the region still remain fragmented in their regulatory approach to the industry:
“This regulatory diversity underscores the challenges and opportunities inherent in the region’s journey toward adopting and regulating Web3 technologies. We hope that as leading countries in Southeast Asia mature in Web3 adoption, the region can create more synergy for the Southeast Asian region as a whole.”
Kim said a collaborative spirit in Southeast Asia could be an essential piece to the puzzle of the region’s ability to “fully realize the potential and benefits of ongoing Web3 adoption.”
Web2 aiding Web3 adoption
Kim also touched on the importance of the presence of legacy Web2 giants in the region helping to aid Web3 adoption, particularly at the crossroads of Web3 and gaming.
“The region has witnessed substantial involvement from major Web2 companies in the burgeoning Web3 landscape, particularly in the realm of gaming. For many Web2 enterprises, gaming is the perfect getaway.”
He gave the example of large Web2 companies like Sony, Square Enix and Rio Aisa being both active in the region and championing local Web3 gaming initiatives.
“Sony’s filing of a patent for NFT transfers between games and consoles underscores its commitment to integrating blockchain technology into the gaming experience. Square Enix is another prominent player, pushing into Web3 with Symbiogenesis, a gamified collectible experience,” he said, adding, “The former CEO of Riot Asia is contributing to the Web3 ecosystem by developing a blockchain-powered MOBA game.”
“These strategic partnerships and initiatives contribute significantly to the creation of a crypto-friendly ecosystem in both South America and Southeast Asia.”
Economic empowerment and proactive regulations
Despite many of these countries being open to new frontiers in the fintech space, more than 70% of adults in Southeast Asia still are without sufficient access to financial services, while millions of small and medium-sized enterprises in the region face large funding gaps.
Kim explained that crypto helps bridge the gaps in the region and fosters economic empowerment of such groups, ushering in a “new era of comprehensive financial accessibility.”
He highlighted that many Southeast Asian countries have acknowledged the potential and the benefits of crypto for local populations and have adopted policies that reflect this:
“Rather than adopting a restrictive approach, these frameworks often focus on providing clarity, fostering innovation and ensuring consumer protection.”
However, as innovative as this technology has been for the region, there has also been an uptick in illicit activity involving cryptocurrencies.
According to a report by the United Nations, the “gray” casino industry in Southeast Asia is taking advantage of crypto and other modern technologies.
Incoming AI dominance
The emergence of artificial intelligence (AI) has also been a major theme in Southeast Asia, with countries like Singapore jumping on the bandwagon to develop the technology suited for local communities.
Kim said the synergy between the AI, crypto and blockchain sectors in Southeast Asia holds “immense potential” for advancing the area into a global tech hub.
“The adoption and integration of AI technologies have the potential to drive innovation, improve efficiency across various sectors and position Southeast Asia as a key player in the global tech-driven economy.”
According to data from the US-ASEAN Business Council, AI has the potential to contribute nearly $1 trillion to the gross domestic product of Southeast Asia by 2030 notably for Indonesia, one of the region’s largest economies.
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