Technologies are one of the main driving forces of globalization, and blockchain is almost the most discussed know-how of the last decade. For many, a “distributed registry” is not just buzzwords, but the future of the real estate, copyright, the Internet of things industries, and many other areas. Cryptocurrencies, often associated with the blockchain, radically change the financial sector and easily cross borders, unlike traditional currencies. However, borders still have a huge impact, and doing business in a particular country is interwoven with its technical, legal and cultural characteristics.
Many analysts predict the success of blockchain projects that enter the Asian market. IQeon figured out what such forecasts are based on.
Onchain Custodian CEO Alexandre Kech once said: “Asia loves blockchain because this technology is considered as a unique way to solve the problems of financial affordability and cross-border money transfers. Countries using this technology can make a significant step forward, which means achieving success much faster than many developed countries that do not use blockchain.”
And that is true. China, for example, is actively competing for leadership in implementing blockchain initiatives. Chinese President Xi Jinping made a statement that blockchain should become a key innovative technology, and the government will strongly support its development and integration into the real economy. In addition, a large number of mining farms and some of the largest cryptocurrency exchanges are based in China.
The scale of China’s actions in the application of blockchain is huge today. In December 2020, one of the largest commercial banks in China – Bank of China issued blockchain bonds worthing $2.8 billion with an interest rate of 3.25% per annum. The proceeds will be used to support small and medium-sized businesses. Entrepreneurs will be able to take out loans at lower rates, since the blockchain system allows bank to reduce the cost of issuing and circulating debt instruments.
In addition, the Central Bank of China is pursuing an initiative to introduce a digital national currency – the renminbi. The authorities are already preparing a package of regulating documents that will become the legal basis for launching the digital renminbi.
Asian markets were among the first to take active steps in recognizing and regulating cryptocurrencies at the legislative level. The laws of Singapore and Japan that regulate cryptocurrencies are still far from ideal, but remain more or less balanced and favorable for companies operating in the field of virtual assets. Thus, Monetary Authority of Singapore has developed a separate regulatory “sandbox”, which allows financial institutions to experiment with the use of cryptocurrency in the real sector. Depending on the project, the regulator may provide support by weakening regulatory requirements on the individual base.
China has become the most stringent regulator in the Asian market compared to its neighbors. In 2017, the government approved a ban on activities with cryptocurrency attracted through crowdfunding. Projects that violate these rules are criminally liable.
But taking this into account, the Chinese market has not ceased to be one of the largest for the circulation and mining of cryptocurrencies. Beijing, Hangzhou, Shanghai, and Shenzhen are the cities where the most popular projects and exchanges are registered. Such giants as Huobi, Bitmain, MakerDao, ImToken and other large blockchain-related companies are based there.
Asian countries have noted the strategic potential of the blockchain and its branches, including cryptocurrencies. This applies not only to large companies, but also to the general population. Chinese citizens, for example, are very progressive and willingly take advantage of new technology. Therefore, the Asian community is the main moving force of the cryptocurrency market.
The Asian market is a new America for startups. While people are only adopting a blockchain strategy in the West, in the East they are already actively using it. But introducing a distributed registry in the Asian market is more about the social benefits of decentralization, not financial. Therefore, the strategy for promoting the blockchain project in the markets of China, Japan, Singapore and Korea should be carefully thought out and their cultural characteristics should be taken into account.
Experts believe that blockchain technology has broad prospects for development in the Eastern market, in particular in public administration and finance, as well as for solving problems associated with improving the level and quality of life of the population. And the level of interest and blockchain literacy of the population will only increase.
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