Asia as a Market for Fintech & Blockchain Projects
Asia is one of the most rapidly increasing markets for the fintech and blockchain industries. The market is rising quickly due to various factors, including increased smartphone and Internet connectivity, a sizable unbanked or underbanked population, and an expanding middle class.
According to Statista, the annual transaction value in digital payments in Asia increased from 1757 bln USD in 2017 to 4532 bln USD in 2022; Neobanking was introduced to the Asian market in 2019 and since that demonstrated growth till 20.86 bln USD in 2022.
According to Statista, the annual transaction value in digital payments in Asia increased from 1757 bln USD in 2017 to 4532 bln USD in 2022; Neobanking was introduced to the Asian market in 2019 and since that demonstrated growth till 20.86 bln USD in 2022.
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Asia as a Market for Fintech
& Blockchain Projects
& Blockchain Projects
Does Asia have a large number of local fintech startups? Is there still a demand for overseas products and services?
Do Asians use cryptocurrencies?
Cryptocurrency mass adoption statistics in Asia are impressive. Two crucial factors that indicate cryptocurrency mass adoption in the region are the value of blockchain transactions within the region and the percentage of the population that owns cryptocurrencies.
Chainalysis estimates the cryptocurrency market in the CSAO (Central and Southeast Asia and Oceania) region represented 14 % of global cryptocurrency value, and Eastern Asia also had 14% of the worldwide value of cryptocurrency transactions, amounting to $591 billion.
CSAO sees most of its crypto activity happen on centralized services like other regions. DeFi (decentralized services) are still new for the Asian cryptocurrency market.
Regarding the number of crypto holders, Asian countries can be divided into countries with mature markets (Japan, South Korea) and extremely fast-growing markets (Thailand, Vietnam, Indonesia and other SEA countries). According to Statista surveys, around 63% of South Koreans own or have owned cryptocurrencies.
In China, retail trading is restricted and often done across multiple exchanges via VPN. But the holdings of a few of the top Chinese whales are over six digits, and they are holding, many of them are holding cryptocurrencies earned from mining before the ban in 2017.
From 2019 to 2022, the percentage of cryptocurrency owners among the country's population has increased from 23% up to 45% in Thailand, from 6% up to 20% in Malaysia, from 15% to 29% in the Philippines, from 11% till 19% in Indonesia, from 22% till 27% in Vietnam.
Chainalysis estimates the cryptocurrency market in the CSAO (Central and Southeast Asia and Oceania) region represented 14 % of global cryptocurrency value, and Eastern Asia also had 14% of the worldwide value of cryptocurrency transactions, amounting to $591 billion.
CSAO sees most of its crypto activity happen on centralized services like other regions. DeFi (decentralized services) are still new for the Asian cryptocurrency market.
Regarding the number of crypto holders, Asian countries can be divided into countries with mature markets (Japan, South Korea) and extremely fast-growing markets (Thailand, Vietnam, Indonesia and other SEA countries). According to Statista surveys, around 63% of South Koreans own or have owned cryptocurrencies.
In China, retail trading is restricted and often done across multiple exchanges via VPN. But the holdings of a few of the top Chinese whales are over six digits, and they are holding, many of them are holding cryptocurrencies earned from mining before the ban in 2017.
From 2019 to 2022, the percentage of cryptocurrency owners among the country's population has increased from 23% up to 45% in Thailand, from 6% up to 20% in Malaysia, from 15% to 29% in the Philippines, from 11% till 19% in Indonesia, from 22% till 27% in Vietnam.
Asia is home to approximately 7000 fintech startups, which is still less than in the US, while the total population of Asia is around 4.75 billion, which exceeds the US population by more than 10 times. The statistics clearly demonstrate that Asia remains an untapped market, providing opportunities for foreign companies to establish a customer base.
What are the main tendencies for DeFi adoption in Asia?
Due to the high confidentiality in the DeFi sector, any statistics based on transaction volume with connection to the region are not highly accurate. Web traffic patterns suggest NFTs are the biggest on-ramp into DeFi for CSAO today, with more than 50% of the total volume from the DeFi sector in the region.
After NFT-related online traffic, the second niche is play-to-earn blockchain game websites. NFT tokens and play-to-earn games have an intrinsic connection. In most blockchain games, in-game products are NFTs that can be resold on various NFT marketplaces, such as MagicEden and OpenSea. Some heavy online traffic to NFT markets may be from blockchain game players, particularly in Thailand, Vietnam, and the Philippines.
After NFT-related online traffic, the second niche is play-to-earn blockchain game websites. NFT tokens and play-to-earn games have an intrinsic connection. In most blockchain games, in-game products are NFTs that can be resold on various NFT marketplaces, such as MagicEden and OpenSea. Some heavy online traffic to NFT markets may be from blockchain game players, particularly in Thailand, Vietnam, and the Philippines.
Is Asia a good choice for projects with tokens?
Asia is a good choice for projects with tokens because Asia has many institutional crypto investors (crypto VCs and crypto funds) and large exchanges for token listings (KuCoin, ProBit, bitFlyer).
Any project deciding to go to Asia with its own token should make a pre-check of local laws on securities. In multiple jurisdictions across Asia, retail buyers are allowed to purchase a token only if it is not classified as a security in accordance with national laws.
Any project deciding to go to Asia with its own token should make a pre-check of local laws on securities. In multiple jurisdictions across Asia, retail buyers are allowed to purchase a token only if it is not classified as a security in accordance with national laws.
Is Asia a good choice for blockchain-based entertainment?
The CSAO (Central, Southeast Asia, and Oceania) region is a centre of blockchain-based entertainment innovation. Polygon and Immutable X are game-focused blockchain developers based in India and Australia. For example, the two major play-to-win games, Axie Infinity and STEPN, are available in Vietnam and Australia, respectively.
What are the key reasons for making Asia a growing profitable market?
3. “Green finance” governmental policies and pandemic rules made contactless payments more popular in South East Asia
Cash transactions were still the most popular payment method in SouthEast Asia before 2020. During the pandemic, when social distance rules were enforced, Singapore’s cash transactions dropped to 37% compared to 65% in the previous years. The same scenario happened for Malaysia and Indonesia, dropping to 64% and 77%, respectively. Asian governments prioritise sustainability and encourage merchants to accept contactless and digital payments. Besides, many offline businesses launched online shopping during the pandemic and started receiving digital payments.
So as the market share of cash transactions in South East Asia is still over 50%, there is still a demand for new fintech instruments.
Cash transactions were still the most popular payment method in SouthEast Asia before 2020. During the pandemic, when social distance rules were enforced, Singapore’s cash transactions dropped to 37% compared to 65% in the previous years. The same scenario happened for Malaysia and Indonesia, dropping to 64% and 77%, respectively. Asian governments prioritise sustainability and encourage merchants to accept contactless and digital payments. Besides, many offline businesses launched online shopping during the pandemic and started receiving digital payments.
So as the market share of cash transactions in South East Asia is still over 50%, there is still a demand for new fintech instruments.
1. In Asia, retail customers prefer digital and mobile payments over traditional banking services.
Decades ago, when the European middle-class population used wire transfers and plastic cards, Asia had an underdeveloped banking system and a cash-based society; however, with the rise of mobile phones, financial services developed quickly. As a result, mobile payments replaced card payments, making it easier for Asian customers unfamiliar with traditional banking to become loyal users of fintech products.
Decades ago, when the European middle-class population used wire transfers and plastic cards, Asia had an underdeveloped banking system and a cash-based society; however, with the rise of mobile phones, financial services developed quickly. As a result, mobile payments replaced card payments, making it easier for Asian customers unfamiliar with traditional banking to become loyal users of fintech products.
2. Asians prefer integrated experience and discreet banking.
Retail customers in Asia prefer “all-in-one” platforms with instant payments. The largest Chinese marketplace Taobao has its own payment system Alipay, so users can purchase goods without leaving one mobile application. Used to integrate customer experience, Asian e-commerce customers connect their accounts with digital banking.
In 2021, South Korea achieved a significant milestone by becoming the first country to legally allow mobile app developers to offer third-party payment services on Google Play and Apple Store. The leading payment gateways in South Korea's social media market are Kakao Pay, Toss, and Naver Pay, but none hold the top spot. This new regulation has opened up a world of possibilities for innovative solutions in the digital payment sector.
Retail customers in Asia prefer “all-in-one” platforms with instant payments. The largest Chinese marketplace Taobao has its own payment system Alipay, so users can purchase goods without leaving one mobile application. Used to integrate customer experience, Asian e-commerce customers connect their accounts with digital banking.
In 2021, South Korea achieved a significant milestone by becoming the first country to legally allow mobile app developers to offer third-party payment services on Google Play and Apple Store. The leading payment gateways in South Korea's social media market are Kakao Pay, Toss, and Naver Pay, but none hold the top spot. This new regulation has opened up a world of possibilities for innovative solutions in the digital payment sector.
