digital_assets

Ten countries in Southeast Asia have been embracing the digital economy both from the private and public sectors. Each nation has its challenges and unique approaches to technology disruption.

For example, Singapore is considered a financial hub with the majority of people living in the city, while Cambodia or Myanmar are still developing their infrastructure with less than 50 per cent of the population in urban areas.

Regardless of the differences, Southeast Asia has 350 million internet users – more than the entire American population. Have no doubt about it, the digital economy here is set to continue to boom, with Google recently reporting that the internet economy in Southeast Asia would reach $240 billion by 2025.

With a digital-economy ready landscape, I believe Southeast Asia can take advantage of digital assets in a number of unique ways. Here are just six instances where digital assets can help empower Southeast Asia’s economy.

Stimulate collaboration between the public and private sectors

Regulation can be seen as a roadblock for digital assets in SEA. It might be true that the government and public sectors are usually slower in adopting new technologies such as digital assets, but changes are unavoidable. Every government knows that the digital economy is the future; thus, the digital asset movement could spark collaboration between the public and private sectors like never before.

The private sector needs government support to unlock investment and infrastructure while the government needs expertise from the private sector. These collaborations are inevitable and could stimulate the growth and development of the digital economy.

Thailand has taken initiatives working with eight banks to test its central bank digital asset, Intanon coin. The Intanon coin is a proof-of-concept that the government’s digital token can be used to facilitate transactions in the private sector.

Workforce skills and education improvement

Digital assets are proving to be a gateway to a full-on digital economy. Technologies are disrupting virtually all sectors. Although digital assets alone might not have a massive impact on the economy yet, they play a key role in showing the people and government how the future will look.

I think the coming of digital assets is changing the skill sets needed, resulting in changes to education systems globally. Knowledge and skills are being developed in a different way to comply with the worldwide digital economy.

Banks for unbanked

According to a recent World Bank report, half of the population in SE Asia are unbanked, with only 4 per cent of people owning a credit card. The digital asset allows people to catch up with the digital economy, the so-called new world. People can have a credit score, get a loan, and shop online without needing a bank account or credit card.

Also read: Why trust and transparency are the answer to concerns about digital assets

A digital asset ensures no one is left behind when we are moving so fast to the digital world. Being able to access digital payments also means the size of the digital economy is bigger than before.

Improve the velocity of money

The government has been making more money and injecting them into the system to solve the economic crisis for a long time. After a while, increasing the money supply does not help with GDP much due to the lower money velocity rate.

A low money velocity rate means money is not circulating as fast since people are not spending money. Digital assets make it easier for people to spend money, which, I believe, could increase the velocity of currencies also.

Take China for example; China just launched a Digital Yuan to be the nation’s stable token. An effort to be a leader in digital transformation is not surprising; Chinese people have bypassed bank accounts and credit cards to mobile for a long time.

It’s estimated that around 80 per cent of Chinese smartphone users use mobile payment via services like Alipay and WeChat Pay. Not only will having a digital currency make it easier for money to circulate in the system but I believe it may also help regulate the debt market across SE Asia more effectively.

Increase wealth especially for millennials

With half of Southeast Asia’s population being millennials, they are the first generation to see technology disruption for themselves. The millennial generation grows up with the digital transformation, and they believe that this is the future. Interesting research shows that 43 per cent of millennials online traders have more faith in digital assets more than the stock market. 71 per cent of the survey respondents said they would trade digital assets if traditional institutions offer it.

I think we will see a pattern emerging where tech-savvy millennials with investment power are more willing to invest in digital assets. Digital assets provide stronger methods for millennials to increase their wealth, which, I believe in turn will result in a better economic wealth of the country.

Empower SMEs

It is of common belief that wealth has always been limited to people who already have it. The barrier to raising funds or entering a new market for people with fewer resources such as small to medium businesses have always been higher than big corporations.

Digital assets allow anyone to have their online payment option, which melts the wall between SMEs and the potential market anywhere in the world. They fuel success, helping provide entrepreneurs of all gravities to have an opportunity like any other big player.

While I don’t believe digital assets are the key to solving all problems in SE Asia, they will certainly empower the economy in a way that no other technology can. I think digital assets can be credited with providing everyone, everywhere, with a chance to enter the new digital economy. They also play an essential role in shaping a future that everyone can be excited about.

From my experience, most of the countries in Southeast Asia are ready to adopt digital assets, and, interestingly some governments are taking initiatives to explore this new technology. You can trade digital assets legally in countries like Singapore, Thailand, and Indonesia. The market is only getting bigger, and it seems unavoidable for each country to ride the digital transformation wave, which is starting today.

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