An article exploring the cryptocurrency culture in South and Southeast Asia

Written by: Ignas | DeFi Research Compiled by: Yangz, Techub News

A year ago, I co-founded the DeFi studio Pink Brains with my high school classmate Arthur. Currently, the team has a total of six members, four of whom are from Vietnam. During our work together, we clearly realized how different the cryptocurrency market in Vietnam and the mentality of local investors are from the West.  

Cryptocurrency has developed into a global industry, and the dominance of the industry by Western and English KOLs may cause us to ignore opportunities outside the West.  For example, in my last blog post on "Market Status", I was surprised to find that although OpenSocial did not have as much attention on X as Farcaster and Lens, it was better than the latter in terms of the number of users. The secret of its success lies in its large user base in Indonesia, Vietnam and India.  So, in this blog post, Mai, the person behind the official Pink Brains X account, and I teamed up to share insights into the cryptocurrency markets in South and Southeast Asia. We also interviewed some investors from these regions about their personal experiences.

South Asia: The Wilderness of the Crypto Industry

 TOKEN2049 Singapore Summit is the largest cryptocurrency event in 2024, and Andy’s words caught our attention, “The Asian market is still untapped.” While East Asia is already a mainstream cryptocurrency hub with clear regulations, large institutional and professional investor participation, Central Asia, South Asia and Oceania (CSAO) have taken a different, often overlooked approach to cryptocurrency adoption. Below is a map of the global cryptocurrency adoption index drawn by Chainalysis in 2024. Chainalysis data shows that the Central Asia, South Asia and Oceania (CSAO) region is the third largest cryptocurrency market, with more than $750 billion in cryptocurrency inflows between July 2023 and June 2024, equivalent to 16.6% of the global total, second only to North America and Western Europe.  

In addition, 7 of the top 20 countries in the 2024 Global Crypto Adoption Index are from the region, including India (ranked 1st), Indonesia (ranked 3rd), Vietnam (ranked 5th), Philippines (ranked 8th), Pakistan (ranked 9th), Thailand (ranked 16th), and Cambodia (ranked 17th).  By the way, last year I shared my personal insights on why Koreans are keen on cryptocurrencies but not DeFi. I have lived in Korea for 8 years, and interested readers can learn about the cryptocurrency culture in Korea.  

How Investors in South and Southeast Asia Adopt Cryptocurrency

Vietnam

Let’s start with Vietnam. As mentioned at the beginning of the article, most of the team members of our DeFi studio Pink Brains are from Vietnam and have personal experience with the Vietnamese market.  According to Triple-A data, Vietnam is the second country in terms of cryptocurrency ownership. About 21.2% of the population owns cryptocurrencies, second only to the UAE at 34.4%.  

In addition, Chainalysis data shows that Vietnamese investors made a lot of money last year, ranking third in the world with $1.18 billion in cryptocurrency cash-out gains, twice that of Spanish and Philippine investors and three times that of Thai investors.  The reason behind this is the Vietnamese government's ambiguous stance on cryptocurrencies. Although using cryptocurrencies for real-life use cases such as payments or mortgages is not allowed, the government has not completely banned cryptocurrencies. Therefore, holding cryptocurrency exposure is very attractive for investors in the country, even if the actual adoption rate still lags behind other Southeast Asian countries.  

• For most Vietnamese cryptocurrency investors, CEX is the first choice. Among them, Binance, Bybit, OKX and BingX are the most popular, while Coinbase has a small market share due to language barriers and complex KYC processes. Trading and holding cryptocurrencies on exchanges remains the most common investment strategy in the country.

• Secondly, airdrops and cryptocurrency mining are also popular investment trends in the country. A large number of Telegram and Facebook groups share various mining tips, potential "treasure" opportunities, and hold various token giveaways. In fact, it is very easy and cheap to buy cloned accounts, forge KYC, or set up robots in the region. This also makes sybil attacks from Vietnamese investors a real challenge for many protocols. Some large airdrops, including Arbitrum, LayerZero, Aptos, and Zksync, have been attacked by Vietnamese investors.

• However, most investors in Vietnam are not experienced. They mainly pursue quick returns and regard cryptocurrencies as a sideline or life-changing opportunity outside of their main business. Veteran investors in the region typically look for low-market-cap tokens on DEXs while holding most of their assets on CEXs. New investors entering the industry after 2022 often choose to chase airdrops. Experienced traders often suffer losses in major black swan events such as FTX or Luna, while newbies are often hurt by bad KOL signals, scams, or over-leverage.

• In addition, as a top country in international mathematics competitions, Vietnam is also a gathering place for blockchain development talents. You must have heard of big names such as Loi Luu (Kyber Network) and Vu Nguyen (Pendle), but there are also serial scammers from Vietnam, such as the mastermind behind Whale Markets!

  
  

Mai also told me that retail banking and non-cash payments are developing rapidly in Vietnam.  Vietnam is following a similar path to China, especially in large cities, where digital wallets, banking apps, and credit cards are slowly replacing cash. This shift is a big boon for Web3 because it creates conditions for cryptocurrency payments, as is happening in Singapore.  In addition, more and more large companies are beginning to introduce blockchain into their business operations. We have already seen small-scale tests in the banking industry, such as HSBC Vietnam's first blockchain experiment for letter of credit payments.  These efforts show that Vietnamese businesses are paying close attention to blockchain. But for now, everything still needs to wait until the country's legal framework becomes more open to cryptocurrencies.  

India

Despite changing regulations and taxes, India remains a major player in the global cryptocurrency market. As you know, India imposes a high tax of 30% on cryptocurrency gains and a 1% tax on all transactions, so some investors have begun to seek less restrictive international exchanges to invest.  However, despite these obstacles, cryptocurrency is still developing rapidly in India. The rise of innovative cryptocurrency startups in India shows that the country needs more favorable tax policies and clearer regulations to maintain its development momentum.  

I asked Hitesh.eth on X what is special about India. Hitesh.eth said that India has a large group of unemployed youth who are eager for incentives. Therefore, if done properly, cryptocurrency applications can be bootstrapped in the form of tokens and points, as we have seen with Axie in the past. In addition, in terms of infrastructure, India has some of the best developer resources, and the cost is much lower than that of the EU and the United States. He said, "More than 50% of community-related work is done by Indians, and there are more young people eager to join this field." However, this gig nature and its strong ambitions also "lead to some problems, as seen in some airdrops in the past, the industry has a wrong perception of Indians. However, this perception is not representative because it is more specific to the specific situation." Indonesia is one of the fastest growing markets by transaction volume.  

The rise in cryptocurrency activity in the country is driven mainly by speculation, according to the product manager of Indonesian cryptocurrency exchange Pintu. "Many people still see cryptocurrencies as a way to make a quick profit," he said. "Now, many traders turn to Telegram groups for signals, just as they used to trade stocks, but the activity in cryptocurrencies is more intense because new tokens are constantly emerging." He also said that stricter rules on the Indonesian Stock Exchange may also push people into cryptocurrencies. "With the new full bidding auction measures making stock trading more regulated, some investors are looking for alternatives like cryptocurrencies." 

In addition, Indonesia leads in DEX and DeFi activity compared to regional and global averages. Eli5DeFi confirmed this, saying, "Many Indonesians get involved in cryptocurrencies, usually starting with memecoins or airdrops, because they are simpler and more exciting. Airdrops, in particular, often only require time and effort to participate." He added. "

We have been focusing on TON applications recently, and some people even build communities to swipe DOGS, NOT, and HAMSTER." As Indonesians become more proficient in cryptocurrencies, liquidity mining, staking, and DeFi projects are becoming more popular locally. This growth has created a new generation of "crypto degen" communities, with millennials and Generation Z accounting for more than half of the investor base, seeking emerging technologies and quick profits. In addition, DeFi is also on the rise, and Eli5DeFi said that there are many DeFi builders in Indonesia, such as Monad co-founder @0x_eunice, Pyth co-founder @Mariobern, HawkFi CTO @bradydonut, Pandora's @mathdroid, etc.  

Singapore

While crypto adoption in countries like Indonesia and Vietnam has been driven by “Crypto Degens” and promises of quick returns, things are a little different in Singapore. Ronald Chan from Saprolings, a Web3 incubator, said that a large number of cryptocurrency companies have flocked to Singapore after China issued its ban. The reasons they chose Singapore include:

1. Geographical proximity to China

2. Strong Chinese culture

3. Lax regulatory policies

4. Low taxes

5. Large Chinese population

6. Free flow of capital (including Bitcoin)

7. Strong rule of law (very important)

8. Well-educated business people

9. Region's financial hub

10. Low taxes

11. Large Chinese population

12. Free flow of capital (including Bitcoin)

13. Strong rule of law (very important)

14. Well-educated business people

15. Region's financial hub Ronald Chan said that regulatory progress and merchant services highlight the broader potential of cryptocurrencies beyond trading and investment. Ronald said that Singapore "will issue banking licenses to local and foreign banks to let them compete on an equal footing, which is different from many other countries." In addition, Singapore "has a nationwide QR scanning system that is very similar to China's Alipay and WeChat Pay. The system supports Mastercard and Visa cards, but users and merchants don't like it because both parties have to pay extra fees." In addition, Grab, the country's super app for taxis, food delivery and other services, has also begun allowing users to top up their e-wallets with cryptocurrencies. Currently, supported cryptocurrencies include Bitcoin, Ethereum, XSGD (Singapore's local stablecoin), USDC and USDT.  

    

    In the second quarter of 2024, cryptocurrency payments in merchant services in Singapore reached nearly $1 billion, the highest level in two years. This is an interesting shift for a market where traditional payment systems are already very efficient, indicating that cryptocurrency is becoming a common asset for more people. At the same time, more than 75% of XSGD transfers were for $1 million or less, and nearly 25% were for amounts below $10,000, indicating that the retail user base in the local cryptocurrency field is expanding.

    

    The reason for Singapore's success is the local clear regulatory policies, which have increased people's trust in stablecoins. In 2023, the Monetary Authority of Singapore (MAS) set guidelines for stablecoins, and the following year the agency introduced cryptocurrency custody and licensing rules. Singapore's success provides an example for the United States to promote the adoption of clear regulatory policies. Case Study: TON successfully enters the South Asian market TON ecosystem's point-to-earn games are very popular in South Asia. I tried to play a few games, but personally, the rewards are not high. You may look down on TON because of excessive "airdrops" and "brainless" point-to-earn games, but this is actually consistent with their goal of putting cryptocurrency in everyone's pocket. By earning free tokens, a new wave of users began to learn how to trade on DEX, increase liquidity, stake, and gradually explore other areas of the TON ecosystem. Most of these users are from the Commonwealth of Independent States (CIS) and South Asian countries.  

    More than 66% of Notcoin's website traffic comes from CIS countries. This is followed by Asian countries such as Indonesia, Vietnam, China and India. Getgems.io and Hamster Kombat also show similar trends, matching Telegram's user base. In addition, the situation of Telegram Mini Bot, which provides free tokens, is similar to the rise of Axie Infinity in the Philippines.

    

    TON's success is attributed to two popular areas, free airdrops and point-earning games.  

    Free Airdrops

    Everyone is tired of the points exchange airdrop activities. And this is the uniqueness of Telegram's free airdrop scene. TON ecosystem projects can use Telegram's 900 million users to distribute tokens. For example, DOGS, which was originally just a meme, gained widespread attention due to its fair distribution and no pre-sale method, and also introduced a large number of new users to TON. Soon, DOGS was listed on mainstream exchanges such as Binance. The value of the airdrops received by each wallet ranged from $10 to $60. This is not much for many investors in Western countries, but users can use multiple accounts to make money. For many people in third world countries, these airdrops provide a new source of income in economic difficulties. Point-to-point games such as Hamster Kombat have quickly emerged in South Asian countries. In just three months, Hamster Kombat has reached 239 million user registrations, becoming one of the most popular point-to-point games. In addition, its YouTube channel has gained more than 10 million subscribers in a week. I can only say that it's crazy, and this is an unheard-of number in many Western countries. In addition, Bitget Premarket data shows that the total market value of Hamster Kombat tokens is $920 million, which means that the airdrop is worth about $550 million. Thanks to simple gameplay, referral activities and good social effects, point-to-earning games like Hamster Kombat have quickly attracted the attention of Southeast Asian cryptocurrency KOLs. And these KOLs are as popular on TikTok as they are on X. Conclusion South and Southeast Asia are one of the most populous regions in the world, with a young and technology-friendly population structure. They are the key areas that cryptocurrency companies should pay attention to, second only to the United States and Western Europe. However, due to differences in income, government regulations and economic conditions in different countries in the region, it is difficult for companies to develop strategies that suit their specific circumstances. And TON seems to have mastered the method of the region's degen market, and the adoption rate of cryptocurrency payments is also increasing.