Southeast Asia is one of the world’s fastest-growing regions, with a population expected to reach 1.7 billion by 2025. The region is also home to a number of innovative startups and businesses, which are looking to harness the potential benefits of blockchain technology.
The Southeast Asia blockchain landscape is anticipated to grow significantly in the next few years as businesses and governments work to build stronger partnerships and collaborate on cutting-edge blockchain projects. As blockchains gain wider adoption, it will be important for organizations working in Southeast Asia to maintain a balanced perspective that considers both the potential benefits and risks of this new technology. At present, there are already a number of prominent companies operating in Southeast Asia using blockchain technology. As these firms continue to invest resources into developing their offerings, they are likely to have an increasingly significant impact on regional economies.
Southeast Asian blockchain landscape
As part of its e-government development plans, Vietnam’s government released Resolution No. 17/NQ-CP in March 2020. As part of the resolution, a legal framework will be developed for the application of modern technologies such as blockchain, the Internet of things, artificial intelligence, big data, and open APIs.
Crypto-asset transactions are now being regulated in almost all South-East Asian countries. In the digital payment market, Thailand has been proactive in grabbing opportunities. Due to this, crypto account holders grew from 160,000 to 700,000 in 2021. New regulations introduced by the Anti-Money Laundering Office (AMLO) took effect in September 2021.
Singapore is also implementing frameworks for the crypto market in Southeast Asia. There are currently more than 230 local blockchain organizations in Singapore. To process cryptocurrency transactions, and store or exchange cryptocurrency, an entity must have a license under the Payment Service Act (PSA) in 2020.
All cryptocurrency trades in Malaysia must comply with the Securities Commission Malaysia (SC Malaysia) and Bank Negara Malaysia (BNM). As part of its efforts to promote fair trading, SC Malaysia has also been attentive to regulating ICOs (Initial Coin Offerings). Observing an increased demand for digital assets in the Philippines, the BSP implemented new guidelines to facilitate financial services.
Companies involved in Southeast Asian blockchain technology
Hundreds of blockchain start-ups across the region are growing rapidly, utilizing blockchain in a variety of industries. Blockchain companies that illustrate its diversity include Pundi-X (Indonesia), which partners with retailers worldwide to install its XPOS – a blockchain-powered point-of-sale device that allows retailers to accept cryptocurrency. LuxTag (Malaysia) utilizes blockchain to verify the authenticity of luxury items. HARA (Indonesia) founded in 2015, it relies on its blockchain software to provide data exchange for the food and agriculture sectors. In 2017, Electrify was founded to introduce trans-active energy platforms that will democratize access to clean energy in the Asia Pacific.
In early 2021, Solana, a blockchain platform based in San Diego, and Coin98 Ventures, an investment firm based in Vietnam, formed a new partnership. Using the Solana platform, they plan to provide a $100,000 grant, technical, marketing, and community support to Southeast Asian startups. It will be worth $5 million in total. As a result of Solana’s development fund, private companies and governments are increasingly interested in supporting blockchain technology, as a practical development strategy.
The start-up recently raised US$30 million in funding and is looking to penetrate the Singaporean market further with regulations that allow users to select their preferred energy provider coming into effect.
Opportunities and Challenges
As blockchain technologies continue to evolve, businesses operating in Southeast Asia are bound to find opportunities and face challenges.
On the one hand, blockchain startups in the region have access to an adequate talent pool to ensure that the demand for blockchain products and services in the region, particularly its financial services and manufacturing sectors, are properly met. On the other hand, the region has a high level of mobile phone penetration, making it difficult to prevent data breaches and protect customer data.
To capitalize on these opportunities and avoid common pitfalls, businesses in Southeast Asia must strike a balance between regulation and freedom. While regulation is necessary to protect customers and prevent data breaches, it should not amount to a barrier to business growth. However, too much freedom may result in a lack of compliance with regulations, which could be harmful to businesses. To find the balance that is right for their business, businesses in Southeast Asia must consider the specifics of their market and region.
Benefits of Southeast Asia’s Blockchains
There are a number of potential benefits of investing in Southeast Asia’s blockchains. Blockchains offer secure and transparent records of transactions, and they can be used to reduce the costs of many transactions. They can also be used to boost the financial stability of businesses and governments.
From campaign to click to purchase, blockchain provides advertisers with all the data they need to run complex optimization algorithms and enhance their campaigns. With the integration of a marketing platform, campaigns can be automated to maximize sales and return on investment
The UA cost keeps increasing
Since the potential customers who accept blockchain are still under-educated, the cost of customer acquisition keeps increasing. Because there are fewer users for more competitors, the traffic cost grows dramatically. However, digital advertising is crucial for educating the market and attracting more users.
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