Author: Tiger Research Reports
Compiled by: TechFlow
Summary of key points:
The Web3 market in Asia is growing rapidly, thanks to a tech-savvy population, proactive government policies, and widespread corporate participation. Major countries such as South Korea, Japan, and Vietnam are leading the way.
New regulatory frameworks in South Korea, Indonesia, and Thailand are fostering blockchain innovation, with regulatory sandboxes encouraging experimentation in real-world assets (RWAs), decentralized finance (DeFi), and digital asset services.
Emerging markets such as China and Cambodia are full of opportunities but also come with risks. Despite regulation, China's unofficial involvement remains significant, while Cambodia offers growth potential for SMEs willing to navigate legal complexities.
1. Tiger Research’s focus on Asia
Source: Chainalysis
At Tiger Research, we focus primarily on the Web3 market in Asia due to its huge potential and rapid growth. Asia stands out due to several factors: 1) a young and tech-savvy population, 2) a high level of technology adoption, 3) a well-developed regulatory framework, and 4) a proactive attitude among businesses. These factors are driving Asia to become a leading force in the global Web3 space. Among the many countries in the region, we are currently focusing on the following key markets:
South Korea: Enterprise companies are entering the Web3 space, with blockchain game development taking an important position. Large gaming companies are actively preparing for the launch of blockchain games, marking a shift in the industry.
Japan: Japanese government-led initiatives are driving revitalization of the Web3 industry and promoting active corporate participation. Major companies with global IP like Sony and Bandai Namco are expected to contribute significantly.
Indonesia: Indonesia has considerable long-term potential with its large population and rapidly growing market. The government’s proactive stance, including the launch of a state-owned cryptocurrency exchange, further enhances this outlook.
Vietnam: Vietnam is poised to become Asia’s “Web3 powerhouse,” thanks to its high level of technology adoption among its young population and a competitive developer base.
Thailand: Thailand’s government, financial sector, and public are highly involved in the crypto market. Traditional financial institutions are at the forefront of Web3 initiatives.
Singapore: Although Singapore has a clear regulatory framework and sandbox programs to promote innovation in ICOs, STOs, RWAs, and payments, the decline in corporate support has posed challenges.
India: India has great potential in the Web3 space with its large talent pool and thriving startup ecosystem. Success stories like Polygon highlight India’s ability to drive global Web3 infrastructure projects. These countries are leveraging their unique strengths to shape the future of the Asian Web3 market. Watching these countries in Q3 will provide valuable insights into emerging trends and opportunities in the Asian Web3 space.
2. New regulatory framework
2.1. South Korea: Questions about the effectiveness of the law
South Korea introduced the (Virtual Asset User Protection Act) on July 19, 2024 to enhance investor protection and ensure market integrity. The main provisions of the bill include: 1) a clearer definition of virtual assets, 2) mandatory interest payments on customer deposits, 3) requiring insurance in the event of an accident, 4) strengthening supervision of unfair trading, and 5) imposing penalties without exception for market manipulation (MM).
One of the most direct impacts is that major exchanges such as Upbit and Bithumb began to compete, offering 2-4% interest rates for customer deposits. In addition, token issuance projects have strengthened internal controls to comply with the requirements of the new regulations.
Source: Bithumb, Gate.io, Tiger Research
However, the $AVAIL case has raised questions about the effectiveness of the bill. The arbitrage trade reportedly generated approximately 1 billion won in profits due to the large price differences between domestic and global exchanges. This highlights ongoing issues such as price manipulation and market interference, but the lack of a thorough investigation has raised questions about the actual impact of the bill.
2.2. Indonesia: Implementing a blockchain technology sandbox
Indonesia’s Financial Supervisory Authority (OJK) introduced the sandbox framework in June 2024 under Regulation No. 3/2024 on Technological Innovation in the Financial Sector (POJK 3/2024). The regulation covers a wide range of blockchain-related technologies and is expected to bring previously unregulated financial services into the official system.
Areas of focus include virtual asset services such as staking and stablecoins, which now have the opportunity to be tested within a regulatory framework and potentially gain recognition. The sandbox is expected to facilitate the development of new financial services, especially at the intersection of blockchain and traditional finance and the tokenization of real-world assets (RWAs). These innovations are expected to revolutionize Indonesia's financial markets.
This on-site inspection shows that the new regulations are being actively used for market supervision. Looking ahead, we will continue to evaluate the effectiveness of these regulations and track market reactions to ensure sustainable growth of the Korean virtual asset market.
The sandbox regulation reflects the Indonesian government’s proactive attitude to support financial innovation while ensuring consumer protection and market stability. This move is expected to further accelerate the growth of Indonesia’s fintech industry.
Participating companies must meet specific criteria, such as demonstrating innovative and unique services for Indonesian consumers and businesses. In addition, they must submit the necessary documents to the OJK during the application process. Approved companies will have one year to test their services, and once they pass the evaluation, will have six months to obtain a full license. This balanced approach provides companies with the flexibility to enter the market quickly while ensuring sufficient time to experiment and optimize their services.
2.3. Thailand: Sandbox regulations extended to real-world asset markets
The Securities and Exchange Commission (SEC) of Thailand has taken significant steps to foster innovation in the digital asset and Web3 space. In August 2024, the SEC launched a digital asset sandbox to complement its existing detailed licensing framework. This sandbox allows for testing of key initiatives that are in line with emerging market trends.
The sandbox provides space for experiments in multiple fields such as tokenization of real-world assets (RWA), payment systems, security protocols, decentralized finance (DeFi), etc. Bitkub Academy, a subsidiary of cryptocurrency exchange Bitkub, is optimistic about this, believing that this is a good opportunity for entrepreneurs to test innovative ideas within the legal framework.
This move is also expected to directly benefit users, allowing them to experience new features and products in the digital asset and Web3 space. A typical example is RealX, the first tokenized real-world asset in Thailand, which was listed on the Bitkub exchange due to the SEC’s openness to innovation.
Looking ahead, more breakthrough projects are expected to emerge as new possibilities emerge in Thailand’s digital asset market. At the same time, the development of clear and comprehensive laws and regulations is expected to enhance market stability. Thailand’s proactive attitude will play a key role in shaping the future of the country’s digital asset ecosystem.
3. New government initiatives
3.1. India: National Blockchain Framework (NBF)
On September 4, 2024, the Indian government launched the National Blockchain Framework (NBF), marking a major step in the country’s digital transformation strategy. NBF is more than just the adoption of technology; it represents an ambitious plan to create a more secure and efficient digital infrastructure by addressing the limitations of legacy systems in India’s rapid digitalization process.
Several key goals of the NBF include: enhancing transparency in the public sector, fighting corruption, promoting technological innovation, and boosting economic growth. In addition, the program aims to improve citizen-centric services. By leveraging the immutability and transparency of blockchain, the NBF aims to increase the reliability of government transactions and records. The goal is to make data manipulation more difficult and increase citizen trust in government systems.
Praamaanik, Source: NBF-brochure
The key components of NBF include:
Vishvasya Blockchain Stack: As a Blockchain-as-a-Service (BaaS) solution, it provides decentralized infrastructure that enables startups and enterprises to quickly develop new blockchain-based services. By leveraging government data, the stack aims to accelerate the adoption of blockchain in both the public and private sectors.
NBFLite: This is a lightweight blockchain platform designed for startups and academia that supports rapid prototyping, research and education, aiming to promote blockchain innovation and talent development in India.
Praamaanik: This is a blockchain solution for mobile app origin verification that enhances the security of the Indian mobile ecosystem by preventing the spread of malicious or fake apps, thereby improving user trust and system integrity.
National Blockchain Portal: This comprehensive platform provides the latest information on blockchain technology, including news, events, and educational resources. Its goal is to increase public awareness and increase access to blockchain knowledge.
India's NBF is one of the few state-led initiatives in the world to support blockchain technology across multiple industries. It sees blockchain as critical infrastructure and is expected to transform the country's digital landscape. If successful, NBF will serve as a model for other countries, showing how blockchain can be integrated into national infrastructure.
4. Enterprise-driven market
4.1. Japan: A blockchain ecosystem led by the financial sector
As mentioned in previous reports, Japan’s blockchain ecosystem is still influenced by the financial sector. A notable recent development is that Sony has officially entered the blockchain field by launching a new Ethereum Layer 2 solution, Soneium, in partnership with blockchain company StarTale. Soneium, launching in August 2024, aims to leverage Sony’s extensive global reach and user base to provide scalable infrastructure for Web3 applications.
Source: Soneium
Sony also launched an incubation program called Soneium Spark, which provides developers with infrastructure, mentorship, industry partnerships, and up to $100,000 in funding. This move comes on the heels of Sony Bank’s announcement of plans to launch a yen-backed stablecoin, further demonstrating Sony’s growing involvement in the Web3 ecosystem and its active exploration of new opportunities in blockchain technology.
Currently, Soneium is in the testnet phase called Minato and is expected to be launched on the mainnet in the first quarter of 2025. The platform has attracted much attention, and it is reported that more than 50 projects are already in development or planning to deploy on Soneium. This marks an important step for major technology giants to enter the blockchain field, especially in the context of financial companies mainly creating blockchains on their own. The success of Soneium may become a key step in the wider adoption and promotion of blockchain technology by large enterprises.
Source: Ishiba
Japan is also going through major changes at the political level. Ishiba is expected to become the next prime minister, and he belongs to the same Liberal Democratic Party as the current prime minister, Kishida. However, his attitude towards the blockchain market is still unclear. Although Ishiba's policy proposals include plans to revitalize rural areas using blockchain and NFT technology, this initiative is mainly focused on regional development rather than promoting the broader blockchain industry. Once Ishiba forms a cabinet, it remains to be seen how his policies will affect Japan's blockchain industry.
4.2. Vietnam: Education and industry work together to develop the blockchain ecosystem
Vietnam’s blockchain ecosystem is growing rapidly, thanks to a strategic synergy between education and industry development. Central to this progress are the efforts of the Vietnam Blockchain Association (VBA) and the Academy of Blockchain and AI Innovation (ABAII).
Source: ABAII
VBA has partnered with Tether to host educational conferences in major cities in Vietnam. Additionally, VBA has partnered with ABAII to provide blockchain education to university students through its UniTour program, a series of university visits designed to spark interest in blockchain technology. In addition to education, VBA has also played a key role in helping students and young professionals enter the blockchain industry. One notable initiative is the SwitchUp accelerator program, which provides mentorship, support, and investment to Web3 startups and projects.
Since its official launch on January 10, 2024, ABAII has embarked on an active educational outreach campaign. Accredited by the Ministry of Science and Technology and supported by the VBA, ABAII is committed to becoming a leading center for blockchain research, development, and application in Vietnam. Its long-term goal is to provide blockchain education to 1 million Vietnamese by 2030. In the short term, ABAII plans to train 100,000 students in 30 universities.
This coordinated approach, combining education with startup incubation, has laid a solid foundation for the sustainable growth of Vietnam’s blockchain industry. With a clear strategy, Vietnam is striving to become a major player in the global blockchain market.
5. New countries to watch in the blockchain market
5.1. China: Will the market open?
Source: X @justinsuntron
China’s cryptocurrency market remains quietly active despite severe regulatory crackdowns in 2017 and 2021. While official attitudes toward opening the market are negative, there is still activity and enthusiasm among builders and investors.
Chinese entrepreneurs continue to find ways to participate in the global blockchain ecosystem, such as participating in international projects and setting up overseas subsidiaries. Big capital from China remains a powerful force in the market, although this is not reflected in official statistics. Chinese investors remain actively involved and contribute to the growth of the crypto market.
The existence of gray markets is another distinguishing feature. Despite government bans, trading continues through peer-to-peer and offshore exchanges. This phenomenon shows that regulatory measures alone do not completely stop activity.
Although China is unlikely to officially reopen its cryptocurrency market in the short term, China's technological strength and capital influence in the global blockchain ecosystem cannot be ignored. If China opens its market, the impact will be far-reaching. However, even without an official market, China has already played an important role in shaping the global cryptocurrency landscape.
It is critical to keep a close eye on regulatory changes and market dynamics in China, as China-related developments are likely to remain a key factor in the evolution of the global blockchain industry.
5.2. Cambodia: A market with both risks and opportunities
Cambodia’s cryptocurrency market has been in the spotlight lately, but for bad reasons. In August 2024, Huione Guarantee was involved in a major scandal, accused of being involved in illegal transactions worth $49 billion. As a result, reports on Cambodia’s cryptocurrency market have mostly focused on crime and fraud.
Source: Soramitsu
However, Cambodia’s blockchain development is not defined solely by recent turmoil. As of 2022, the Cambodian government has been actively exploring the application of cryptocurrencies. For example, the central bank developed a blockchain payment system called Bakong, showing early efforts to accept digital finance.
Currently, the Cambodian market may seem somewhat stagnant, but this state also presents opportunities, especially for businesses that see potential for growth. Recent industry trends show that the trend of utilizing blockchain technology is emerging in Cambodia, indicating that entrepreneurial activity is increasing.
Cambodia is a market to watch. Despite the market chaos, companies that proactively work with the government and take well-thought-out risks are likely to succeed. However, this is not a market for large multinationals, but rather a place where SMEs can thrive with a proactive and flexible approach.
For SMEs willing to operate in a turbulent regulatory environment, Cambodia offers a first-mover advantage. Maintaining close communication with government agencies and gaining a deep understanding of local regulations are key to mitigating risks and seizing opportunities. However, caution is essential, and legal risks and market instability remain significant concerns.
Overall, Cambodia’s cryptocurrency market is a “double-edged sword” with both risks and rewards. Companies with strong risk management capabilities and a willingness to adapt to local conditions may find promising opportunities in this dynamic and evolving market.
6. Conclusion
While African markets, including Nigeria, are gaining momentum in the cryptocurrency space, Asia remains the fastest-growing region. To date, most of the changes in Asia have been driven by governments, large institutions, and corporations, while mass-market services for ordinary consumers are still in their early stages. Nonetheless, these developments mark an important step toward the future.
The cryptocurrency market in Asia is developing rapidly, thanks to proactive government policies, huge corporate investments, and strong interest from the younger generation. While mass adoption will take time, the current phase is critical to laying the necessary foundations. We will continue to monitor Asia as the market continues to mature. The region’s key role in shaping the future of the global blockchain industry is clear.
