Asia: Taking Over the World Economy with BlockchainIt comes as no surprise that a region with a large percentage of crypto-users would impact the overall global economy. While blockchain technology is still in its fledgling stage, Asia looks to play a major role in increasing blockchain usability.
“Blockchain” – a term heard frequently nowadays amongst trading circles and tech enthusiasts alike have started coming into the public eye, especially in 2018. Nearly 20% of all cryptocurrency trading volume comes from South Korea and other nations in the region. This 20 % comprises of big institutional investors and average Korean citizen alike. Most go to exchanges like BitThumb, Korbit, or Coinone. It is largely believed that the success of Blockchain technology will usher in a new system in terms of real-estate, banking, healthcare, governance and the list goes on.
ASIA: The Blockchain Hub of The World
Cryptocurrencies, in general, have always had a cult following from Asia, especially in countries like Japan, China, and South Korea etc. Some of the world’s largest cryptocurrency exchanges are originally based in Asia. The rising individual wealth in Asia, particularly in China and South Korea is also driving the performance of cryptocurrencies. These individual investors are looking for alternative investment platforms that provide higher returns that are not usually found in traditional vehicles, such as stocks, bonds, and real estate. A perfect example would be Binance, consistently being the top cryptocurrency exchange in the world by both daily trading volume and revenue. Another honorable mention would be Bitfinex, a Hong Kong-based exchange offering many crypto assets. While National Governments in the region have always had a mixed stance towards cryptocurrency trading, Blockchain, on the other hand, has attracted a special interest from many industries in Asia. Hence, Asia is considered the Blockchain hub of the world, due to a variety of factors mentioned in brief below.
- Asian Consumers Are Ahead: There’s no denying that the popularity of cryptocurrencies has exploded all over the globe. However, if statistics are to be believed, cryptocurrency trading platforms are gaining popularity at a much faster rate in Asia compared to the rest of the world. It is estimated that one of three South Koreans owns or have transacted using some form of cryptocurrency. There are concrete reasons behind why Asia leads the race in this regard. Firstly there are many regions in Asia who have directly embraced digital currencies as opposed to using credit cards.
By 2020, about 1 million people in Asia will receive their very first loans ever. Crypto economy is the tool that will help them to merge into financial markets and to apply for approximately 3 million payday loans annually. Global blockchain companies like MicroMoney aim to support this process allowing people with no credit rating score to enter Asian banks with positive credit histories. Now such companies work as a microfinance business helping the unbanked and underbanked people to provide their primary needs with payday loans.
- Consumer Population: The Asian population is about 4 Billion, which makes it one of the most densely populated continents of the world. From a business perspective, this means more speculative investors willing to risk. A recent study indicated that the average consumer in the Asia-Pacific region spends somewhere around $10000 to $100,000 compared to a measly $1000 in the United States. With South Korean exchanges outgrowing traditional stock markets, many people including some government officials believe that cryptocurrencies could replace fiat sometime in the future.
How Can Asian Consumers Stay Ahead?
Compared to adoption rates in the United States, there’s no denying that Asian consumer adoption rates are almost tenfold. Much of this has to do with the national government’s outlook towards cryptos in Asia compared to the rest of the world. In the US, for instance, there is a definite lack of clarity for cryptocurrency regulations. This makes the U.S. market, an unstable one to enter due to the lack of any concrete regulations. The picture is radically different for Asia, where regulations are more clear-cut and unambiguous. Regulators are receptive to the idea of blockchain integration and what it could do for the respective nations.
Another major factor is the degree of awareness of cryptocurrency technology in Asian countries compared to other nations. Asian consumers, on the whole, have much more of an understanding and education regarding distributed ledger technology. The tremendous potential of blockchain technology-based services further legitimizes it as a long-term investment.
How Asian Consumers Affect the Global Economy
It comes as no surprise that a region with a large percentage of crypto-users would impact the overall global economy. While blockchain technology is still in its fledgling stage, Asia looks to play a major role in increasing blockchain usability. For instance, in the petrochemical industry, some countries are already starting to break away from using the U.S. Dollar as a standard for transactions. They have started looking at cryptocurrencies and other means of digital payment as a solution. A perfect example would be Venezuela’s “Petro” cryptocurrency, which is backed by the oil reserves of the country.
The Blockchain Revolution is coming: Be Prepared
Many nations are now trying to figure out an alternative digital reserve currency, with the ultimate aim of dethroning the U.S. Dollar as well as fighting money laundering. China is already looking towards introducing its version of bitcoin, to substitute the Renminbi as the national currency.
Singapore has also become an attractive crypto-hub, because of its highly connected nature and linkages to global trade flows. Singapore is a key node in the trading of oil and gas and is looking to further expand in blockchain implementation.
Thus, Asia is poised to lead the way by embracing sensible regulations, coupled with more awareness and education about the subject. This, of course, doesn’t mean that there have never been any obstacles towards cryptocurrency adoption. It’s only last September when the Chinese government ordered a crackdown on cryptocurrency exchanges in the country with the regulations being eased. Japan has also shown a similar stance when seven major exchanges in the country were punished for violations. That being said, blockchain presents a wonderful opportunity to participate with life-changing innovative technologies, which could change the manner of how we live and interact in our daily lives.
Among the various benefits, blockchain tech provides, perhaps the key factors are decentralization, democratization, radical transparency, and self-data ownership. As Cryptocurrencies and Blockchain tech moves forward, so does the companies incorporating blockchain technology. Thousands of developers, entrepreneurs, investors, and users are coming up with innovations in the process of transactions, hash rate, wallets, exchange platforms, etc. Cryptocurrency security measures are also starting to get prepped up, with new protocols like Lightning Network, Segwit, Schnorr, TumbleBit, being developed by the best engineers in the world.