Translation: Blockchain in Vernacular
Brief Overview:
The Web3 market in Asia is growing rapidly, thanks to a tech-savvy population, positive government initiatives, and corporate involvement. Key countries such as South Korea, Japan, and Vietnam are leading the way.
New regulatory frameworks in South Korea, Indonesia, and Thailand have fostered blockchain innovation, with regulatory sandboxes encouraging experimentation in real-world assets (RWA), decentralized finance (DeFi), and digital asset services.
Emerging markets such as China and Cambodia present both opportunities and risks. Despite regulatory oversight in China, informal participation remains significant, while Cambodia offers potential for SMEs willing to navigate legal complexities.
1. Tiger Research focuses on the Asian market
At Tiger Research, our main focus is on the Web3 market in Asia, which has attracted much attention due to its huge potential and vibrant growth. Asia has unique advantages in the following aspects:
1) A young and tech-savvy population, 2) Strong technology adoption, 3) A mature regulatory framework, and 4) A positive attitude among businesses.
These factors are driving Asia to become a leading force in the global Web3 space. Among many countries, we are currently focusing on the following key markets:
South Korea: Large companies are entering the Web3 space, with blockchain game development being particularly prominent. Large gaming companies are actively preparing for the launch of blockchain games, marking a transformation in the industry.
Japan: The government-led Web3 industry promotion plan has promoted widespread corporate participation. Major players with global intellectual property rights, such as Sony and Bandai Namco, are expected to contribute significantly.
Indonesia: With a large population and a rapidly growing market, Indonesia has considerable long-term potential. The government’s proactive stance, including the launch of a state-owned cryptocurrency exchange, further enhances this outlook.
Vietnam: As a potential country for Asia's "Web3 powerhouse", Vietnam benefits from its high technology penetration rate among its young population and competitive developer resources.
Thailand: The government, financial sector, and the public are highly involved in the cryptocurrency market, with traditional financial institutions leading the way in initiatives in the Web3 space.
Singapore: Despite having a clear regulatory framework and launching innovation-oriented sandbox programs in the ICO, STO, RWA and payment sectors, Singapore faces certain challenges as corporate support declines.
India: With a large talent pool and a thriving startup ecosystem, India has great potential in the Web3 space. Success stories like Polygon highlight the country’s ability to drive global Web3 infrastructure projects.
These countries are each leveraging their unique strengths to shape the future of the Asian Web3 market. Following the news from these countries in Q3 will help you gain a deeper understanding of the latest trends and opportunities in the Asian Web3 space.
2. New regulatory framework
2.1. South Korea: Questions about the effectiveness of the law
On July 19, 2024, South Korea enacted the (Virtual Asset User Protection Act) to strengthen investor protection and ensure market integrity. The main provisions of the bill include: 1) more clearly defining virtual assets, 2) mandatory interest payments on customer deposits, 3) requiring accident insurance, 4) strengthening supervision of unfair trading, and 5) strictly enforcing market manipulation (MM) penalties without exception.
One of the most direct impacts of the bill is the intensified competition among major exchanges, such as Upbit and Bithumb, which have begun offering 2-4% interest rates on customer deposits. In addition, token issuance projects have also responded to the requirements of the new regulations by strengthening internal controls.
However, the AVAIL case has raised concerns about the effectiveness of the bill. It was reported that about 1 billion won in profits were generated through arbitrage trading due to price differences between domestic and foreign exchanges. This exposed ongoing issues such as price manipulation and market disruption, but the lack of a thorough investigation has raised questions about the actual impact of the bill.
On September 11, the Financial Supervisory Service (FSS) notified Bithumb that it would conduct an on-site inspection as part of its “Second Half Virtual Asset Business Inspection Action Plan.” This is a follow-up to the FSS announcement on September 2, which outlined plans to audit two Korean won market exchanges. AVAIL’s sharp price increase is expected to be one of the focuses of the investigation.
This on-site inspection shows that the new regulations have been actively applied to market supervision. Looking ahead, we will continue to evaluate the effectiveness of these regulations and track market reactions to ensure the sustainable development of the Korean virtual asset market.
2.2. Indonesia: Implementing a blockchain technology sandbox
Indonesia’s Financial Supervisory Authority (OJK) has introduced a sandbox framework as part of the Regulation on Technological Innovation in the Financial Sector (POJK 3/2024) issued in June 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 and recognized within a regulatory framework. The sandbox may facilitate the development of new financial services, especially at the intersection of blockchain and traditional finance, and the tokenization of real-world assets (RWA). These innovations are expected to revolutionize Indonesia's financial markets.
The sandbox regulation reflects the Indonesian government’s positive attitude to support financial innovation, ensure 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 tailored for Indonesian consumers and businesses. In addition, they will be required to submit relevant documents to the OJK as part of the application process. Approved companies will have one year to test their services and, if they pass the assessment, will receive a full license within six months. This balanced approach provides companies with the flexibility to enter the market quickly while ensuring sufficient time for experimentation and optimization of services.
2.3. Thailand: Sandbox regulation extends to the real world asset (RWA) market
The Thai Securities and Exchange Commission (SEC) has taken an important step in promoting innovation in the digital asset and Web3 sectors. In August 2024, the Thai SEC launched a digital asset sandbox as a supplement to the existing detailed licensing framework. This sandbox provides space for testing key innovative projects that are in line with emerging market trends.
The sandbox provides a platform for experiments in multiple areas, including tokenization of real-world assets (RWA), payment systems, security protocols, decentralized finance (DeFi), etc. Bitkub Academy, a subsidiary of cryptocurrency exchange Bitkub, is confident about this move, believing that it is a good opportunity for entrepreneurs to test innovative ideas within a legal and compliant framework.
This initiative will also directly benefit users, allowing them to experience new features and products in the digital assets and Web3 space. A notable example is RealX, Thailand’s first RWA tokenization project, which was listed on the Bitkub exchange due to the SEC’s innovative attitude.
Looking ahead, as new opportunities continue to emerge within Thailand’s digital asset market, more groundbreaking projects are expected to emerge. At the same time, the development of clear and comprehensive laws and regulations is expected to enhance market stability. Thailand’s positive moves will play a key role in 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 unveiled the National Blockchain Framework (NBF), marking an important step in the country’s digital transformation strategy. More than just technology adoption, the NBF represents an ambitious plan to create a more secure and efficient digital infrastructure by addressing the limitations of legacy systems exposed by India’s rapid digitalization.
NBF has several key goals: to increase transparency in the public sector, fight corruption, promote technological innovation, and drive economic growth. In addition, the initiative aims to improve citizen-centric services. By leveraging the immutability and transparency of blockchain, NBF aims to increase the reliability of government transactions and records, with the goal of significantly reducing the possibility of data manipulation and increasing citizen trust in government systems.
The key components of NBF include:
Vishvasya Blockchain Stack: This is a Blockchain-as-a-Service (BaaS) solution that provides a decentralized infrastructure that enables startups and large companies 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: A lightweight blockchain platform designed for startups and academia, NBFLite supports rapid prototyping, research, and education with the goal of driving blockchain innovation and talent development in India.
Praamaanik: A blockchain-based mobile app provenance verification solution, Praamaanik improves 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 of blockchain and increase the availability of blockchain knowledge.
India's NBF is one of the few state-led projects in the world that aims to support blockchain technology across multiple industries. India sees blockchain as critical infrastructure that is expected to revolutionize the country's digital landscape. If successful, NBF could become a model for other countries, showing how to integrate blockchain technology into national infrastructure.
4. Enterprise-driven market
4.1. Japan: Blockchain ecosystem around the financial sector
As previously reported, Japan's blockchain ecosystem is still dominated by the financial sector. A recent notable development is Sony's foray into the blockchain space with the launch of its Ethereum second-layer solution, Soneium. This solution was developed in partnership with blockchain company StarTale and was announced in August 2024. Soneium aims to provide scalable infrastructure for Web3 applications by leveraging Sony's extensive global reach and user base.
Sony has also launched an incubation program, called Soneium Spark. The program supports developers by providing infrastructure, mentorship, industry partnerships, and funding opportunities up to $100,000. 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 efforts to explore new opportunities in blockchain technology.
Currently, Soneium is in the testnet phase called Minato, with the mainnet expected to launch in the first quarter of 2025. Interest in the platform is very high, with reportedly over 50 projects being developed or planning to deploy on Soneium. This marks a significant entry into the blockchain space by a major tech giant, especially in a context where financial companies are primarily creating their own blockchains. Soneium's success could be a key milestone in the wider adoption and popularization of blockchain technology by large enterprises.
On a political level, Japan is also going through major changes. Shigeru Ishiba, who is expected to become the next prime minister, is from the same party as the current prime minister Fumio Kishida, the Liberal Democratic Party. However, Ishiba's position on the blockchain market remains unclear. Although his policy proposals include using blockchain and NFT technology to revitalize rural areas, this initiative is mainly focused on regional development rather than promoting the broader blockchain industry. It is unclear how his policies will affect Japan's blockchain sector once the cabinet is formed.
4.2. Vietnam: Education and industry work together to promote the development of the blockchain ecosystem
Vietnam’s blockchain ecosystem is growing rapidly, thanks to a strategic alignment between education and industry development. The efforts of the Vietnam Blockchain Association (VBA) and the Academy of Blockchain and Artificial Intelligence Innovation (ABAII) are at the heart of this progress.
The Vietnam Blockchain Association (VBA) has partnered with Tether to host educational conferences in major cities in Vietnam. Additionally, the VBA has partnered with the Academy of Blockchain and AI Innovation (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, the VBA has also played a key role in helping students and young professionals smoothly 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 carried out an active educational outreach campaign. Accredited by the Ministry of Science and Technology and supported by the VBA, ABAII aims to become a leading center for blockchain research, development, and application in Vietnam. Its long-term goal is to provide blockchain education to 1 million Vietnamese citizens by 2030. In the short term, ABAII plans to train 100,000 students in 30 universities.
This coordinated approach of combining education with startup incubation has laid a solid foundation for the sustainable development of Vietnam's blockchain industry. With a clear strategy, Vietnam is moving towards its goal of becoming a major player in the global blockchain market.
5. Emerging blockchain market countries
5.1. China: Will the market open?
Despite experiencing severe regulatory crackdowns in 2017 and 2021, China’s cryptocurrency market has remained active behind the scenes. Although official attitudes toward opening up the market are less than positive, activity and enthusiasm among builders and investors remain significant.
Chinese entrepreneurs continue to find ways to participate in the global blockchain ecosystem, such as participating in international projects and setting up overseas subsidiaries. Although these activities are not reflected in official statistics, Chinese capital remains a strong force in the market. Chinese investors remain actively involved and contribute to the growth of the crypto market.
The existence of the gray market is also a notable feature. Despite government bans on trading, trading continues through peer-to-peer exchanges and offshore exchanges. This phenomenon suggests that regulatory efforts alone do not completely halt activity.
While it is unlikely that China will officially reopen its cryptocurrency market in the short term, its technological strength and capital influence in the global blockchain ecosystem cannot be ignored. If China reopens its market, the impact will be huge. However, even without an official market, China has already played an important role in shaping the global crypto landscape.
It will be critical to keep a close eye on regulatory changes and market dynamics in China, as China-related developments will likely 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 not for positive reasons. In August 2024, the market was hit hard by the $49 billion worth of illegal transactions involving Huione Guarantee. As a result, news surrounding Cambodia’s crypto market has been dominated by crime and fraud.
However, Cambodia’s blockchain story is not entirely defined by recent turmoil. As of 2022, the Cambodian government has been actively exploring cryptocurrency adoption. For example, the central bank developed a blockchain-based payment system called Bakong, highlighting its early efforts in the digital financial sector.
Currently, the Cambodian market seems somewhat stagnant. However, this state of affairs presents opportunities for businesses that recognize the potential for growth. Recent industry trends show that more and more businesses in Cambodia are beginning to utilize blockchain technology, indicating that entrepreneurial activity is on the rise.
Cambodia is a market to watch. Despite the chaotic situation, companies that proactively engage with the government and make careful investments may find a way to success. However, this is not a market for large global companies; instead, it is for small and medium-sized enterprises (SMEs) that are able to adapt and thrive here.
For SMEs willing to navigate a volatile regulatory environment, Cambodia offers a first-mover advantage. Maintaining close communication with government agencies and gaining a deep understanding of local regulations will be key to mitigating risks and seizing opportunities. However, caution remains crucial. 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 exciting opportunities in this dynamic and evolving market.
6. Summary
While African markets, including Nigeria, are slowly gaining momentum in the cryptocurrency space, Asia remains the fastest-growing region. To date, change in Asia has been driven primarily by governments, large institutions, and corporations, while mass-market services for everyday consumers are still in the early stages of development. However, these advances represent critical steps toward the future.
Asia’s cryptocurrency market is evolving rapidly, driven by a combination of proactive government policies, significant corporate investment, and strong interest from younger generations. While mass adoption will still take time, the current stage is critical to laying the necessary foundations. We will continue to focus on Asia as the market continues to mature. The region’s critical role in shaping the future of the global blockchain industry cannot be ignored.
