1. Cryptocurrency positioned as an alternative trading and investment asset from many Wealthtech players

There are several cryptocurrency startups that have opened up in the Wealthtech and asset management segments. Even global players such as Huobi and Binance have a significant presence among Southeast Asian users. Cryptocurrencies come across as an alternative to traditional investment assets and the lack of clear rules and regulations has driven meaningful adoption in the region.

Consumers with access to internet holding cryptocurrency as tradeable assets, % of total internet users

Users are showing significant interest in cryptocurrencies. Many are using cryptocurrencies as digital assets or in fintech applications like lending and remittances, etc.

Consumer usage of various Cryptocurrency use cases

2. Blockchain is being implemented as “smart contracts” for financial services or in gaming to increase consumer engagement

Several use cases have popped up for cryptocurrency in the last few years. Smart contracts, gaming, and security measures are some of the most common areas of use of blockchain* technology. Blockchain’s higher data security at relatively lower costs makes it very attractive for use for many new startups.

*Blockchain – decentralised digital ledger used to record cryptocurrency transactions.

New offerings from digital media platforms

3. Blockchain technology is also seeing a rise with several startups gaining fundraising in the past 3 years

There has been significant interest in funding for cryptocurrency and blockchain startups in the recent past. 100+ investments have been made in the last four years. There is a strong inclination from users, players, and investors to explore more use-cases for cryptocurrencies and blockchains.

Blockchain Startup funding in SEA, USD Mn

4. However, regulations are still evolving – Governments are taking measures to increase the adoption of blockchain technology, but trying to limit the risks

Regulation is still a work-in-progress in most of Southeast Asia. Countries are inclined to be crypto-friendly but are wary of the rising crypto-related crimes and frauds. Hence, regulations are being finalized to mitigate the risks.

Regulatory changes regarding cryptocurrency