Fintech innovations have developed significantly in Southeast Asia, allowing for the enhancement of Web3 to dawn upon the adaptable region. And these days, the hype on this side of the world is not about surfing the internet but about creating content and monetising it.
Web3 is the next phase of the internet, which is more decentralised through artificial intelligence, blockchain, smart contracts, metaverse and machine learning technology. With decentralisation being the word of the decade and Southeast Asia being a resilient nation, it is no wonder that the latest web sensation is accelerating in the region.
With many being put under ‘unbanked’ within the conventional financial system and many not on board yet with modern-day finance innovations, Southeast Asia still proves to be a large niche market for innovations, with an average of 440 million total online population.
As a whole, it boasts one of the youngest, most digitally active cohorts globally. Moreover, Southeast Asia’s internet economy is to peak at US$1 trillion by 2030 as the region witnessed an additional 60 million new users at the beginning of the pandemic.
Southeast Asia embraces Web3
Governments in the region and globally have acknowledged this growth and are supporting the digitisation of economies by means of monetary support, servicing and simplifying traditional processes.
For example, the ICA in Singapore has announced the issuing of digital birth certificates as part of their ongoing efforts to streamline and digitalise services for Singaporeans.
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Opportunities such as this will continue to speak for themselves in the region as Web3 was built with the promise of offering users utility, value and empowerment, and we’ve already seen this play out in Southeast Asia.
New economies and structures have been created in the region through the deployment of Web3. Play-to-earn games, for instance, have boomed in the Philippines and have helped keep many afloat during the pandemic.
Play-to-earn is a business model that works on blockchain technology, allowing players to play and earn cryptocurrency. Axie Infinity, one such game in the Philippines, followed this concept of allowing players to earn non-fungible tokens (NFTs), which bridged the financial inclusion gap in the country, mainly during the pandemic.
Similarly, cryptocurrency has opened doors to financial inclusion in Indonesia, with seven million users in the country and 21 million across the region. We’ve seen how cryptocurrency has helped address common financial challenges such as the inability to reach far-flung areas, the lack of access to secure financial services, and the high cost of digital transactions.
Governments are taking crypto seriously and are working to find a balance in regulating these for a Web3 Future. Also monitored by the Commodity Futures Trading Regulatory Agency (CFTC) under the Ministry of Commerce of Indonesia, CFTC plans to present a crypto exchange to encourage a better ecosystem.
Jerry Sambuaga, Vice Minister of Commerce, stated that “The potential of crypto assets as a commodity is huge given a large amount of trade value. There will be changes in the behaviour of investors and traders in the near future, especially among young people who are starting to see crypto as a promising new space.”
Southeast Asia is also home to the highest NFT adopters globally, with many Asian artists gaining popularity and embracing the freedom to create through Web3. Compared to digital artwork, artists find blockchain a more convenient way of creating, selling and distributing NFTs.
There is no need for special treatment to store their artwork, and digital storage helps mitigate the problems that come with physical storage spaces. The use of blockchain technology has also helped artists reclaim ownership of their work.
The big challenge for Web3
Despite the many use cases discussed above, it is still early days for Web3 in the region. Experts often cite hype as a reason for Web3’s growing success. This advancement also requires investing in new technologies and infrastructure, something companies in less developed countries in the region may struggle with.
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Without funding, companies won’t be able to take their technologies to the next level – they won’t be able to grow their business, hire the right talent, and expand into new markets. If these factors are not considered in great detail, Web3 will see short-term growth and remain ‘a fad’ as experts say.
Funding to us was one of the biggest hindrances in the continuous growth of Southeast Asia’s Web3 space. This is why as the domain expert, we teamed up with Finch Asia and Indogen Capital to launch the Cydonia Fund.
The fund focuses solely on emerging Southeast Asia Web3 projects in their pre-seed and series B stage. Through the fund, we hope to discover new and emerging technologies and support the development of more innovative and disruptive Web3 focused projects and companies in Southeast Asia.
Thriving in a Web3 future
To ensure that Web3’s bright future remains long-term, it is essential to strengthen and internalise university students, communities and enthusiasts with the knowledge of Web3.
As the next generation to nurture and optimise Web3 adoption, initiating a public-private partnership between universities and the blockchain industry for us is key.
Identify your resources and reach out to the right people for Web3 startups looking to make a name for yourselves in Southeast Asia.
Seeking out the right funding and partnering with the right organisations is also crucial in setting up your business for success.
Networking with experts is another great tool to abide by to enhance your industry knowledge and build a strong community. Not only will they advocate for your products and services, but they will also provide you with a 360 feedback approach to thrive in the business landscape.
While it’s still early days for Web3, we’ve seen the power its technologies hold, and we’re excited to see the change it’ll bring about in Southeast Asia.
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Image credit: artemisdian
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