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Over the last few years, the cryptocurrency market has grown rapidly on the Asian continent. According to information provided by Statista, the cryptocurrency market in Asia is expected to reach a value of US$8.2 billion, growing at a compound annual growth rate (CAGR) of 7.68% over the next 4 years.
Likewise, according to the recent global cryptocurrency adoption report by Chainalysis, countries such as Vietnam, Thailand, and Singapore are leading cryptocurrency adoption within the SEA region.
Funding Increases in the Crypto Market
Recently, the OECD reported that global economies are expected to grow by 3.1% this year, showing a slight improvement compared to previous years.
Cryptocurrency markets have followed the positive macro trend, showing an increase in funding for crypto projects in the first quarter of the year. According to information provided by Bloomberg, VC funding in crypto reached 2.5 billion dollars during the first quarter of the year, showing an upward trend of 32% compared to the same period last year.
Different recent events have driven the growth of the global cryptocurrency market. From the approvals of crypto ETFs in the United States and Asia to the recent Bitcoin Halving.
Data provided by Statista has supported the positive growth trend of the cryptocurrency market, indicating that the crypto market will continue to grow at a compound annual rate of 8.62%, projecting earnings of 71.7 billion dollars for 2028.
Main factors behind the growth of the crypto market in SEA
In recent years, countries like Vietnam, Thailand, and Singapore have led the adoption of cryptocurrencies in the SEA region. There are various factors that are driving the adoption of cryptocurrencies in the region, some of the main factors are hte following:
Inflationary Economies
Some countries within the Southeast Asia region, such as Laos, among others, have high inflationary levels, and cryptocurrencies position themselves as an option to combat high inflationary levels, allowing consumers to maintain their economic capacity.
Claudio Cossio, founder of Meta Pool, stated that in Asia, the token staking activity is in the early stages of adoption, where it is a very simple solution to accrue rewards by securing blockchain protocols that use proof-of-stake consensus; We will see a massive increase in the next 3 years, with Layer 2 solutions focusing on the Southeast Asia region.
Lack of Financial Inclusion
Several countries within the SEA region have high levels of unbanked or people who do not have access to something as simple as a bank account, in this sense, cryptocurrencies are helping millions of people to access a new financial world.
Crypto-Friendly Regulations
Many countries within the Southeast Asia region have favorable crypto regulations, from a financial, tax, and economic triple approach, which are favoring the development of the crypto market. Clear examples can be the cases of Hong Kong and Singapore.
We can conclude by understanding that the cryptocurrency market in the SEA region is going through a boom, driven by various factors with different types of use cases.
Main Uses of Cryptocurrencies in Asia
Each country has a different economic reality within the Asian continent, yet there are common uses for cryptocurrencies, some of which are:
Remittances
Cryptocurrencies are providing an option for sending remittances, with lower fees than traditional financial means, and a shorter sending time.
Pavel Zavadskii, founder of Biqutex, added, “Cryptocurrencies are one of the fastest-growing methods of paying for goods and services in Asia, mainly due to low transaction fees. Also, one of the success factors is the absence of unnecessary regulatory barriers and, accordingly, the opportunity for any business to quickly start accepting payments in crypto.”
Transactional Method
It is increasingly common for various merchants and individuals to use cryptocurrencies as a means of payment, a clear example was the incorporation of cryptocurrencies as a means of payment by the company Grab.
Investment and Savings
Cryptocurrencies have positioned themselves as a means of savings to help combat inflationary economies and prevent the loss of economic capacity. It is also very common for them to be used as a means to make investments.