Is Asian crypto enthusiasm just speculation?
Its diverse consumer audiences, quick adoption of innovative technologies, and not to mention sheer population size that have made the APAC region an attractive prospect for any eCommerce or fintech company seeking opportunities beyond the mature markets of EEA. This trend is even visible – or, perhaps, especially visible – in the challenging crypto space.
China’s 2017 ban on ICOs and subsequent crackdown on exchange platforms encouraged neighbouring Hong Kong and Singapore to plug the gap in investor demand, whilst making sure they did so in line with robust regulatory frameworks. It worked – to an extent. Though 90% of big bitcoin trades still originate in China, there’s a significant rise in crypto companies and exchanges with headquarters in Hong Kong or Singapore – Wirex included.
Having initiated operations in Singapore in late 2019, Wirex now boasts 160,000 registered users across 8 countries in APAC. The speed with which growth has doubled – at last count in June 2020, Wirex reported 80,000 customers – speaks for itself. There’s clearly an appetite for crypto in APAC, but what does this appetite look like?
Of coins and (wo)men: crypto diversity in APAC
CryptoNews calls Asia “the crypto world’s [centre] of gravity”. As evidence, it points to the fact that that ethereum gas prices spike during Asian trading hours. Indeed, most of the crypto exchanges in the Global Top 10 either originated in, have roots in, or are still based in APAC. But what about the consumer – how does the average Asian crypto customer look like compared to a customer in the EEA?
Wirex and the Stellar Development Foundation can make an educated guess. The recently published The Future of Money report summarises a series of surveys sent out to the Wirex and Stellar databases. The two biggest clusters of respondents were located in APAC and EEA, lending this dataset comfortably to comparisons between the two.
First, let’s start with the similarities. Consumers in both regions – admittedly, it’s a biased sample – are incredibly financially-savvy. Large proportions of users in both APAC and EEA have a bank account, own digital assets, and have sent money abroad. Likewise, most feel secure using cryptocurrencies and see digital assets as a viable alternative to traditional financial instruments and systems.
APAC users are younger, slightly more likely to trust in the security of cryptocurrencies, and – perhaps surprisingly – almost twice as likely, when compared to the EEA, to be women. Indeed, it’s actually Asian women who are almost on par with European men when it comes to trust in cryptocurrencies – exceeding both their Asian male and European female counterparts in this regard.
Speculating on speculation: is it all about the money?
While speculation drives a lot of crypto enthusiasm, it often comes at the expense of practical applications of blockchain technologies. As Laszlo Hanyecz – famous for purchasing two pizzas for 10,000 BTC in 2010 – said in an interview with CoinDesk, “if nobody’s using it, it doesn’t matter if I have it all.”
As engaged as the typical APAC crypto enthusiast appears to be, knowledge about the possible use cases of cryptocurrencies and blockchain technologies is still lacking. According to Wirex’s survey, only 14.2% of APAC respondents, and only 8.6% of female APAC respondents, have heard of stablecoins. Given the popularity of cross-border transactions, it’s clearly an area where increased awareness and education is needed.
So what are the potential use cases?
High remittance fees: stablecoins to the rescue
Of course, the unscrupulous few in the know might use stablecoins to avoid strict capital controls, but the main attraction is faster, cheaper remittances. Though COVID-19 has stalled remittance growth in 2020, APAC saw significant growth in this area in 2018 and 2019 – especially in low- and middle-income countries.
Transaction charges levied by banks, meanwhile, can reach upwards of 10% – something for cost-conscious APAC residents to consider when exploring stablecoins as an alternative. The Future of Money report found that APAC users tend to feel that they pay too much in fees regardless of what they paid – only 35.2% felt that under 1% was an acceptable charge. In fairness, the mean for APAC fees reported by Wirex and Stellar’s survey sample was around 2-3%, higher than the 1-2% paid by EEA respondents.
It’s unsurprising, therefore, that although 95% of APAC respondents view digital assets as a potential solution – more precisely, 69.3% returned a resounding “yes” while 25.7% were “not sure” – they’re unfamiliar with how stablecoins could play a part.
And so, Wirex joins forces with Stellar, lending its voice to the momentum already built by Ripple, Stably and many more, to encourage education and awareness. Committed to democratising financial access and making all currencies equal, Wirex wants to ensure that the crypto ecosystem offers practical solutions for everyone, regardless of demographics.