Asia's New Tigers: Dethroning the West and the East’s Crypto-Economic Miracles

Crypto adoption may usher in a new cohort akin to the ‘Asian Tigers’ of the 70s, where forward-thinking nations who embraced new technology quickly made incredible economic gains relative to the rest of the world.

By: Daniel Dob Loading...

Asia's New Tigers: Dethroning the West and the East’s Crypto-Economic Miracles

We all have blindspots. Yet, for some of the crypto commentariat, that blindspot is the size of a continent. With all the tense gasping about US regulatory attack patterns and diminished American interest during the crypto winter, coupled with the frantic hope that accompanies any whiff of crypto adoption in the US, you could be forgiven for thinking crypto’s potential rests entirely in the American demesne. You couldn’t be more wrong.

Asia is the true future crucible of global crypto adoption, and - if the American authorities don’t buck their ideas up - they may find the runaway gains that occur as decentralised ledgers are incorporated into the sysadmin of daily life don’t end up in the Treasury’s coffers.

Indeed, crypto adoption may usher in a new cohort akin to the ‘Asian Tigers’ of the 70s, where forward-thinking nations who embraced new technology quickly made incredible economic gains relative to the rest of the world. And it’s already happening.

The majority of new Web3 companies incorporate in crypto-friendly nations - from the Bahamas, British Virgin Islands, and Panama to Asian jurisdictions like Singapore, the Philippines, Vietnam, and more recently, Hong Kong. Major successes of the last bull run, like Axie Infinity, were the product of Asian companies. Authorities in a number of Asian countries have moved fast to regulate cryptocurrency within their traditional legal frameworks.

There will always be shady crypto operators who feel regulation is a threat to crypto, but for everyone else, it’s the legal clarity and long-term support of places like Singapore that make them so appealing - and what creates the conditions for new financial technologies to thrive.

While America gets its knickers in a twist, spending years fighting cases against individual firms while using its national apparatus to shakedown crypto firms like Binance (‘$4 billion and all this goes away.’), Singapore has oven-ready regulations that clearly demarcate how, why, where, and when crypto firms can operate. South Korea has been paying over-the-odds for crypto since the days of the ‘Kimchi Premium’. They know a good thing when they see it. Japan is also racing to incorporate digital asset transfers within its wider legal framework, and actively interrogating the production and deployment of stablecoins.

The US approach, dubbed ‘Operation Choke Point,’ is instead taking aim at stifling crypto and, if it isn’t careful, threatens to strangle the US-led parts of the industry in its crib. It is a rather hilarious fate for a country whose last century of pre-eminence rested on its puritanical devotion to technological advancement. However, money talks. And America has it. It’s no wonder the world’s largest economy is complacent and defensive when it comes to financial innovation.

Yet if you don’t take your shot, others will, and American fintech blockchain innovation, talent, and capital are gradually seeping Eastwards. Asia is now the premier location for fintech innovation, and, truth be told, it might be too late to change course. By the time the US gets its act together, Asia’s tightly integrated crypto-economies will already be over the hills and far away. Events like Token2049 in Singapore hosted record attendance, despite the travails of the wider market, with tons of builders, enthusiasts, and funds looking to build at the bleeding edge of finance.

Why is there such legislative support for crypto in Asia? First - it’s important to say that Asia is a large place. Its largest nations currently harbour attitudes similar to those of the US, but throughout the continent, uptake is on the rise, and activity is prevalent. Whether nations are incubating their own CBDCs or using blockchain rails for TradFi, change is in the air.

The pattern is clear. Large, economically dominant countries tend to dislike crypto. Smaller, more flexible, optimistic countries love it. Why? Because money is ultimately a token of access and control, and the further it slips from centralisation, the less access and control nations have. However, crypto offers stunning opportunities and practical advantages in some Asian nations, advantages that align with broader governmental goals, and it is these benefits that have led to such widespread uptake. Crypto creates wonderful avenues for financial inclusivity and access to banking, remittances, and digital payments.

In Vietnam, for example, where the government is undergoing a widespread transition to digital and e-payments, crypto is increasingly seen as a viable solution, and 27% of its citizens report owning crypto. Despite the fact it's still technically infeasible to pay for services in crypto, Vietnam nevertheless remains one of the most mature and active crypto markets in the world for the way it provides an instant payments infrastructure for a nation historically used to using cash and whose banking apparatus is, for the most part, under-nurtured.

The importance of remittances in Asia is another reason for the burgeoning growth and adoption of cryptocurrencies. Last year, four of the top five countries for remittance were Asian countries. Crypto has proven itself as a fantastic substrate for cross-border transactions, with companies like SBI Remit using Ripple to provide low-cost remittances across Southeast Asia to their customers.

Crypto’s utility in providing banking and banking-like services to the traditionally unbanked is exactly why so many of the region’s citizens are enthusiastically adopting crypto. Couple that with financial superapps like Grab in Singapore integrating Web3 wallets, and the trend couldn’t get clearer.

There is a bigger picture here. One that goes far beyond simply looking to Asia for innovation, utility, and gains. The US benefits enormously from USD’s positioning as the world’s global reserve currency. Others have long wanted to break this stranglehold, and with America’s continued militancy towards crypto and the corresponding adoption in Asia - a chink is beginning to open in the US’s previously inviolable and pre-eminent position. Cambodia is already experimenting with using crypto-powered methods to wean themselves of dollar-dependency - and it’s a direction of travel that may continue.

While America sleeps, Asia is stealing a march, and, in turn, the US may begin to find itself scrambling as countries don’t need the stability of the US dollar anymore to conduct their international trade. That would be a catastrophic turn of events for the US, which would be responsible for surrendering 75 years of unassailable advantage - and it's a perfectly avoidable one if the American public urges regulators to work faster towards enshrining digital assets within their financial system.

For now, though, hope is in the east. Institutional adoption is rocketing. Governments are regulating. Businesses are investing. The Asian Tigers are born again and this time, their claws will do far more than just scratch the surface, but may re-order the international balance of power for good.

Daniel Dob is an ex-journalist, legal ace, comms lead, and narrator of new-age net tales, now at the helm of GM Factory, where he helps digital neophytes beam beyond the daybreak.