In recent years, the use of cryptocurrency has become more prevalent in the Association of Southeast Asia Nations (ASEAN). The current crypto trends in ASEAN show Thailand and Vietnam as crypto hubs for the region, slightly pipping the financial technology (fintech) hub Singapore. According to Statista Research and Milieu Research, 82% of the respondents expected Vietnam’s cryptocurrency value to grow in the next five years. In contrast, Thailand had 77%, while Singapore had a lowly 53%.
The number of crypto users in Thailand will likely reach 5.12 million by 2027, with total projected revenue to be about USD 581 million, up from approximately USD 280 million this year. User penetration is currently at 6.2% but will rise to 7.3% by 2027.
Vietnam’s cryptocurrency segment is earning revenue in the region of USD 195.40 million this year, but projections show that it should rise by about 20% to reach USD 493 million by 2027. Furthermore, user penetration looks set to rise from 5.2% to 7.1% by 2027, representing 7.24 million users.
We explore the rise of crypto startups and DAOs in Southeast Asia
Factors influencing the adoption of crypto in Thailand and Vietnam
Nikkei Asia highlighted research from the blockchain data platform Chainalysis, which showed that Thailand and Vietnam recorded crypto transactions of over USD 100 billion each between July 2021 to June 2022. In the Chainalysis 2022 Central & South Asia and Oceania report, Thailand logged USD 135.9 billion in transactions, while Vietnam had USD 112.6 billion. Singapore came in third at USD 100.3 billion, with the rest of ASEAN registering less than USD 80 billion. Note: crypto news report that NFTs had a significant impact on increased adoption of crypto Asia
According to Chainalysis, people in lower-middle and upper-middle countries use crypto for remittances and savings purposes when fiat currency is volatile. Non-fungible token (NFT) marketplaces were also active in Thailand and Vietnam. These tokens provide users with digital title deeds that allow them to virtually own things and pay for them using cryptocurrency.
Some factors influencing crypto adoption in Thailand and Vietnam include the digital transformation of ASEAN and the presence of a tech-savvy population in both countries. The high level of innovation in blockchain technology, crypto, and NFTs and the solutions they provide has attracted many users to begin using the technologies. There are also cryptocurrency developments in gaming, healthcare, and the fintech sectors.
Furthermore, due to economic difficulties, crypto has become a viable trading, investment, and saving option for many.
Challenges to using crypto and future expectations for Thailand and Vietnam
According to Nikkei Asia, crypto use in ASEAN has undergone several challenges. For one, macro factors from the global economy show rising interest rates, inflation, and fears of inflation affecting financial markets. The attempts by central banks worldwide to curb escalating costs in local markets have led investors to abandon volatile investment options like crypto. Cryptocurrencies, such as TerraUSD, suffered massive value crashes from the selloffs, making people wary of investing in crypto.
Moreover, the excitement over the switch by cryptocurrency Ethereum to a new minting system that cuts down on environmentally-unfriendly energy use failed to boost the value of and interest in cryptocurrencies. Further compounding the wariness, concerns remain from traditional or legacy financial institutions about the legitimacy of crypto, undermining its potential.
Significant losses have occurred in the crypto world due to cybercriminals hacking platforms and stealing millions of dollars. So far this year, crypto losses stand at over USD 2 billion, and the hacking trend is likely to continue as criminals discover new ways of stealing from their online victims.
Despite these challenges, the entire ecosystem has positioned both countries at the pinnacle of crypto due to the demand for, adoption, and innovative potential of cryptocurrencies. Thailand continues to open hundreds of new cryptocurrency trading accounts every month, while Vietnam remains one of the countries with the highest crypto adoption rates worldwide.
Thai regulators have maintained their approach of clamping down on activities that may endanger investors. While this approach may dampen interest in crypto by associating it with irregularities and negative news headlines, it also builds confidence in the long term that the industry is safe for investors. For example, companies like Gulf Energy Development, Thailand’s most prominent private energy producer, believe that crypto’s potential and related ecosystems can help to diversify its earnings.
Over in Vietnam, investors are finding opportunities in sectors such as GameFi, which combines gaming and decentralised finance by enabling gamers to use crypto and trade NFTs. Blockchain game developers like Axie Infinity are so popular in the crypto world that they have reached a market capitalisation of over USD 2 billion.
The crypto trends in ASEAN show cryptocurrency’s potential to thrive in the region, with Thailand and Vietnam as crypto hubs, despite the current global economic challenges. Its application in regular life makes it an option worth considering as an alternative to traditional currencies as a source of revenue and investment.