• Asia is a leader in retail crypto adoption, but traditional finance (TradFi) institutions are lagging behind.
• It could be now or never for TradFi to embrace Web3 and keep up with the rapid innovation and adoption rates.
• Examples of payments partnerships between crypto-native firms and licensed financial institutions have been few and far between in the APAC region thus far.
The APAC region has seen a groundswell of innovation and adoption when it comes to grassroots retail crypto adoption. Vietnam topped Chainalysis‘ 2022 Geography of Cryptocurrency report, demonstrating Asia’s leadership in this space.
However, banks and financial institutions in the continent are lagging behind their global peers when it comes to embracing blockchain technologies. This could spell disaster for these institutions if they do not take action soon as the next bull run approaches.
In Western markets, there have been numerous announcements regarding payments partnerships between crypto-native firms and licensed financial institutions; Binance’s Mastercard prepaid crypto card in Brazil being one example. However, developments have been much slower in Asia – with only one out of three proposed initiatives coming to fruition since 2021.
On the investment front, Hong Kong Exchanges and Clearing recently broke new ground by launching Asia’s first cryptocurrency ETF – nearly a year after North American exchanges launched similar products in 2021. Accenture also found that two-thirds of wealth management firms had no plans to offer any form of digital asset investments over the next 12 months.
It is clear that there is still much work to be done for traditional finance institutions across Asia to keep up with their global peers when it comes to embracing blockchain technologies – particularly on the payments side as well as on the investment front. These early steps must be taken sooner rather than later before they risk getting left behind by future bull runs or further innovations elsewhere around the world.