Asia remains divided on cryptocurrencies when it comes to political will or regulations but the region is demonstrating strong on-the-ground demand for the digital asset class and data suggests that the hype is real.

Home to the most populous, largest and fastest-growing emerging market economies, Asia has long been a top candidate for crypto adoption. 

Demand for higher investment returns and tech-savviness coupled with geopolitical uncertainty, slowing global growth and rising interest rates all serve as positive drivers for the region to be a leader in the digital asset class.

Asia Market Share

By transaction volume, Asia Pacific is already a dominant regional player in the market. 

According to a report by crypto research firm Chainalysis, Asian markets accounted for 43 percent of global cryptocurrency activity with $296 billion in transactions between June 2020 and June 2021. In Chainalysis' ‘2021 Global Adoption Index’, Asian countries – Vietnam, Pakistan and India – occupied all three top positions.

Growth is not only backed by expanding volumes by also the number of participants. India, for example, led all countries worldwide in crypto adoption and adoption increase, according to the Statista Global Consumer Survey, from 7 percent in 2019 to 18 percent in 2021.

#Cryptoasia

And the data appears to back the thesis of Asia as not only a current crypto market leader but a region with continued momentum, based on social media activity. 

According to Twitter data shared with renowned streetwear and youth culture website «Hypebeast» last month, Asian nations made up six out of the top 10 countries – U.S., India, Indonesia, Turkey, Bangladesh, U.K., Japan, Nigeria, Vietnam and the Philippines – that were most active in the crypto conversation on social media since 2020.

Between January 1, 2021 and March 2 this year, the top crypto-related hashtags included #nft, #bitcoin, #nfts, #crypto, #bsc, #nftgiveaway, #btc, #eth, #nftcommunity and #airdrop.

Divided Markets

While the demand is evidently present, it remains to be seen if the region’s markets will – or even want to – capitalize on the opportunities. 

In certain markets, there have been positive tailwinds recently such as Japan where its self-regulatory body of 31 local crypto exchanges – the Japan Virtual and Crypto Assets Exchange Association (JVCEA) – plans to simplify new listings with a «green list» of 18 widely accepted cryptocurrencies. The outlook is also positive in South Korea where newly elected President Yoon Suk-Yeol won elections partly on the promises of crypto deregulation, tax cuts and support to build blockchain unicorns. 

But elsewhere, there is less to cheer for optimists. China, for example, has issued a blanket crypto ban, arguing that the move is meant to curb financial crime and prevent economic instability. Last week, Thailand also tightened digital asset regulations with the announcement of a ban against payments using crypto. And yesterday in Singapore, efforts to liberalize access are expected to slow down after DBS announced that it would not introduce its retail crypto offering anytime soon due to concerns by regulators.