Southeast Asia to Emerge as the Next Global Economic Powerhouse Through Mass Crypto Adoption

By Bobby Pham, CMO of KardiaChain

It’s a fact: people like to talk about blockchain. Skeptics and proponents alike could spend days on end debating the technology’s potential and how it might change how the world approaches business, finance and entertainment once innovation really gets underway. 

But when hypotheticals dominate the conversation, it can be easy to overlook the reality that blockchain and cryptocurrency have already begun to shift the fabric of economic power across our planet. 

Making the logical leap between blockchain adoption and economic power might initially seem a stretch; however, technology has always been a core driver of influence. Innovation drives national development, recontextualizes geopolitical relationships, fuels space races and guides trends in art and culture. 

Early adoption can provide an industry advantage that lasts for decades, if not centuries. Consider Hollywood: the advent of the American cinema studio system and corporate-backed moviemaking in the 1910s and 1920s established an industry foundation that has allowed U.S. creatives to dominate the global movie industry to this day. 

Blockchain believers worldwide are waiting to see which global powers will step forward as trendsetters and seize a competitive advantage in the Web3 era. Some might say that it’s anyone’s game at the moment — but in Southeast Asia (SEA), innovators have begun to lay claim to blockchain’s rising star. 

The statistics all but speak for themselves. Today, Southeast Asia hosts 8.58% of the world’s population but accounts for 14% of global cryptocurrency transactions. Venture funding for SEA crypto, blockchain and Web3 startups has already exceeded $1 billion and is on track to exceed the $1.45 billion raised in 2021. Nations in Southeast Asia have also continually dominated global rankings for blockchain adoption. 

And three countries (Vietnam, the Philippines and Thailand) ranked within the Top 10 for Chainalysis’ most recent Global Crypto Adoption Index, with Vietnam holding the #1 spot for the second consecutive year. 

In an innovative ecosystem where early adoption translates to influence and economic advantage, it’s become clear that nations in Southeast Asia are ideally positioned to champion the blockchain revolution — and potentially play a pivotal role in shaping the Web3 era. 

A perfect storm for blockchain mass adoption develops in Southeast Asia

Of course, we have to ask ourselves — why? 

Why are nations in Southeast Asia so much more successful in driving blockchain adoption than their global competitors? 

Why aren’t blockchain advocates seeing similar success in, say, the United States, where entrepreneurial innovators have access to well-entrenched financial services infrastructure and legions of deep-pocketed Wall Street investors? 

Ironically, those very “advantages” are the problem. In the West, established conventional infrastructure actively undermines blockchain adoption and innovation. After all, the average Western consumer already has access to financial products (e.g., bank accounts, personal finance apps, in-person banking). 

Consider the U.S.; in 2021, 95.5% of American households had at least one bank account. Because these consumers’ banking needs are met, they have less motivation to consider, much less seek out, alternative solutions. 

The situation in Southeast Asia is different — and far more favorable to widespread adoption. 

According to WeForum, roughly six in 10 Southeast Asians are unbanked (e.g., without a bank account) or underbanked (e.g., with a bank account but reliant on nonbank services to meet their financial needs). Rather than viewing cryptocurrency and DeFi as trendy redundancies, consumers accept them as necessary solutions for their daily financial needs.  

It’s also worth noting that the lack of preexisting, cumbersome banking infrastructure gives Southeast Asian nations an advantage in rolling out innovative technology at scale. 

Change leaders aren’t forced to incorporate blockchain into antiquated centralized systems; they can leapfrog directly to widespread rollouts. This sudden advancement might seem unlikely — but similar patterns have already unfolded for other technologies.

India’s mobile boom provides an analog. Up until the 2010s, consumer telecommunications adoption in India was limited, constrained by the high costs of building landline infrastructure. 

However, when mobile technology emerged as a cheaper and more accessible alternative, it sparked an incredible boom in consumer interest. This boom, paired with public and private initiatives designed to expand digital access, propelled India into a world leader in mobile enablement. 

Today, the country supports over 550 million internet users — the second-largest population in the world — and is on track to exceed 800 million by 2023. 

India’s success with mobile offers a precedent; it demonstrates that nations can drive rapid adoption of innovative technology if they aren’t constrained by legacy banking. That said, a lack of burdensome infrastructure isn’t the only point in Southeast Asia’s favor. 

The region also features a high proportion of younger, tech-savvy consumers who may be less concerned about blockchain risk. Per Statista, the 20-54 demographic accounts for 40% and 50% of the total population for all ASEAN countries. 

Countries in the region are also known to be friendlier to blockchain innovators than their Western peers. Singapore encourages regulated crypto exchange operations and hosts more than 230 homegrown blockchain startups

In Indonesia, no less than 25 crypto exchanges are licensed to conduct business — and a crypto bourse is scheduled to launch by the end of 2022. Similar initiatives are unfolding in Laos; last year, the government launched a pilot program that allowed six companies to mine cryptocurrency in the country. 

These are business initiatives that attract innovators and fuel fast-paced development. Entrepreneurial advocates across the globe won’t dither or wait for their home countries to catch up with Southeast Asia; they will relocate to where innovation is encouraged. 

By establishing itself as a hub for blockchain advancement, Southeast Asia is ideally positioned to lead the charge for Web3 development — and thus dominate the fledgling ecosystem. 

In Southeast Asia, innovators set a precedent for blockchain success

Committing to blockchain innovation is (relatively) easy — but making that innovation manifest in consumers’ daily lives is an entirely different matter. In recent years, countries across Southeast Asia have quietly begun to transition blockchain’s value from theory into tangible reality. 

In just the last few years, countries in the region have leveraged the technology in ways that would seem almost unthinkable in the West. 

In 2018, Thailand’s Democratic Party became the first in the world to use blockchain to facilitate voting in their national elections. One year later, Indonesia collaborated with SettleMint, a blockchain development platform, to deliver a timely, accurate report on 25 million of the 193 million votes cast in a national election. 

But that’s not all — blockchain has coalesced into Southeast Asia’s arts and culture scene, empowering consumers to engage with entertainment in new and innovative ways. Earlier this year, Thailand hosted a metaverse concert for 20 million global audience members that featured a variety of world-class performers as well as NFTs and virtual shops. 

That said, Thailand isn’t the only ASEAN country to provide a platform for blockchain-facilitated entertainment; in Singapore, locally-produced NFT art was featured at national art festivals such as Art Week 2022 and Crypto Art Week Asia 2022

These aren’t hypotheticals. Southeast Asian nations are proving beyond a shadow of a doubt that blockchain has a place and a purpose in modern society. 

Regional innovators aren’t debating theory. They’re creating real solutions and blockchain-based infrastructure that will help shape how we live, work and play in the future. 

Early adoption begets advantage; when the dust eventually settles on the Web3 revolution, once-entrenched geopolitical powers might find themselves scrambling to keep up with Southeast Asia. 

About the author: 

Bobby Pham is the CMO of KardiaChain, a leading Southeast Asia Blockchain ecosystem,  and runs Boba Digital, a Web 3 Digital Marketing Agency. With 16 years of SEO and digital marketing experience and nearly 5 years experience in crypto, he hopes to leverage his unique experience to push the Web3 industry towards Global Mass Adoption. Currently based in Vietnam, he enjoys traveling across Asia, Marvel films, and basketball. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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