Since its inception, the impacts of Blockchain technology have been modified, tried, and improved in a bid to have real-life use cases. We have seen different blockchains protocols, different methods, and a wide range of speed and efficiency. To show their stance on transparency and trust, many nations are either working to support cryptocurrency adoption or shut it down. However, unsurprisingly, the countries working to shut it down still see a surge in cryptocurrency usage, both from government-backed tokens and peer-to-peer transactions.
The Asia region has received a lot of attention recently. First, China’s ban on cryptocurrencies caused a short-lived correction, while many institutions are bracing up for large cryptocurrency involvement in the opposite end of the continent. In fact, Singapore, one of the Southeastern countries directly opposite China, is a top-five country in crypto friendliness.
Although China has been a major player in the crypto industry, the other Asian countries have been underestimated in their influence on cryptocurrency growth. Eastern Asia accounted for 31% of all crypto trading activities that occurred between mid-2019 and mid-2020. Over a third of convenience stores in South Korea also accept payment in cryptocurrency, and the day trading and scalp trading strategies have their origins in Japan.
Although these perks are admirable, there is still some growing skepticism about Bitcoin, Ethereum, and other crypto tokens being speculative assets and fad-driven Investments. This has led to a narrowing down from the cryptocurrency market to Ethereum blockchain. This transition to Ethereum cryptocurrency has been led by large financial institutions, with retail buyers lagging along.
Ethereum and Southeastern Asian countries
A survey carried out by popular crypto exchange Gemini showed that out of 4,300 respondents based in Southeastern Asia, two-thirds admit to owning cryptocurrencies. Four-fifths of these crypto token owners have Ethereum cryptocurrency. If anything, this highlights the growing adoption of cryptocurrencies in the ASEAN region of the world.
Large financial institutions look out for a few things before choosing which crypto token they will both invest in and integrate into their businesses. First is the smart contract layer built on a blockchain; next is the ease of creating different accounts for different tokens; more like having different bank accounts for different purposes; lastly, liquidity is a major concern for these Asian countries.
Of all the over ten thousand cryptocurrencies globally, only Ethereum fits the bill of these three needs. Most protocols that have Smart contracts have it alienated from the blockchain, and some don’t allow different addresses in one wallet. This has led to the widespread adoption of Ethereum cryptocurrency for e-commerce and cross-country transactions. Using blockchain explorers, these countries leverage several features of the Ethereum blockchain, which are unused by the majority of the token holders.
Cointelegraph’s interview with Daniel Lee, who heads business and listing Operations at DBS Digital Exchange, announced that most Asian big banks, including DBS, have crypto tokens on the Ethereum platform. By having a token on the blockchain, the need for a traditional Clearinghouse is eliminated, and these institutions can save millions of dollars doing away with intermediaries.
Although the gambling industry has found some success in using blockchain technology as it helps evade government regulations and preserve their identities against the prying eyes of tax collectors, the financial institution has seen the most capital inflow. The southeast finance industry has proven that the Ethereum blockchain is the most used platform as the barrier to entry is low and the chances of finding programmers who are extremely knowledgeable with Solidity, the programming language of Ethereum, is very high.
What of the other blockchains with more speed and cheaper transaction fees.
Two of the prominent issues plaguing the Ethereum blockchain are scalability issues, which are the effects of high network usage and huge gas fees. Much has been said on the huge gas fees, with much of it being complaints; the NFT markets, though booming, have hit a cap because when the Ethereum price is up, the gas fees follow suit, rendering the profits of token holders very minute. The decentralized autonomous organizations, known as DAO, have been a major talking point in the DeFi space but have come under the constraints of the gas fees. Because of this, many layer-1 protocols have sprung up, promising almost everything Ethereum offers at a cheaper and more affordable rate. While Ethereum performs 15-30 transactions per second, Solana, its most popular competitor, performs 2,300 transactions per second. The other protocol under the Ethereum killer group, polygon, performs 65,000 transactions per second.
While these blockchain innovations offer bliss as they are a faster and cheaper alternative to Ethereum, major financial institutions in Asia are still hell-bent on Ethereum. The consensus is that the huge gas fees indicate the increase in demand on the Ethereum network. Surprisingly, most of the functions of these large institutions have nothing to do with gas fees. Before the advent of Ethereum 2.0, which would require staking as it is being mirrored at redot.com/eth2/, some of Ethereum’s competitors have eaten out a sizeable chunk of Ethereum’s market share, with Ripple being the only other exclusive layer-1 protocol with an overwhelming presence according to news from Southeast Asia.
The west has seen a consolidation of exchanges like Binance, redot.com, Coinbase et Al., and the different approaches for crypto adoption has led most of the attention to be poured towards the first country to have a Bitcoin city. While this is ongoing, the world seems oblivious to Asia’s use of Bitcoin’s biggest competitor, Ethereum.
Although there has been a delay in the launch of the Ethereum 2.0, which is basically Ethereum on a Proof-of-stake protocol, it has not deterred the southeastern nations from exploring the possibilities beyond its current restraints. We most likely will see the rest of the world adapt the same means of integrating Ethereum into their financial systems.