As someone who lived in East Asia for most of my life and learned about Bitcoin in 2015, I had the opportunity to observe the rise of the crypto industry in my region from the very beginning. First, these were pretty local projects with a small audience and trading volume, neglected by traditional institutions. Then, major centralised exchanges emerged, showing that crypto could become the next big thing.
And here we are in 2024: Eastern Asia is the sixth largest crypto economy worldwide, accounting for nearly nine per cent of on-chain value received between July 2023 and June 2024. A multitude of factors — from concerns about TradFi to the struggling real estate market — have made crypto a popular asset class in the region, even in areas with the strictest regulations.
There is now a discussion about whether East Asia will remain a strong player in the crypto niche. With China imposing strict restrictions on the sector and other regions strengthening their positions, the matter has taken on even more importance.
As a patriot of Asia, I firmly believe in the potential of my region. As an independent observer, I clearly see the exact reasons why the crypto industry here will continue to thrive. As the CEO of a leading cryptocurrency exchange, I am convinced that CEXes will continue to drive the market forward, serving as an entry point for the next billion crypto users.
What’s behind Eastern Asia’s crypto market growth?
Eastern Asia has always boasted a strong IT sector: industry giants like Samsung, Sony, and Tencent have been born and thriving here for decades. A skilled workforce, strong manufacturing base, and high technology adoption have fuelled this growth, making the region one of the world leaders in internet and smartphone penetration rates. The same factors helped shape a vibrant crypto market in the region.
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Eastern Asia is home to some of the world leaders in crypto adoption, including Hong Kong, Japan, China, and South Korea. The latter tops the list: South Korea received US$130 billion of on-chain value between June 2023 and June 2024, and every tenth country resident is an active crypto exchange user. Both individuals and institutions have turned to digital coins in South Korea: as the population questioned traditional finance and embraced crypto as an alternative asset class, corporations followed suit. Giants like Samsung embarked on their blockchain journey, which increased trust in the industry and further boosted the crypto adoption rate.
High demand for crypto in South Korea goes with the relative isolation of the country’s market, creating phenomena like Kimchi Premium: Bitcoin on local exchanges often costs more than on the global market. As a result, Koreans flock to global exchanges — a trend that has intensified since local platforms listed USDT.
Strong interest in digital assets in Eastern Asia withstands regulatory challenges. In China, access to crypto exchanges was shut down in 2021, but it sparked a rapid rise in over-the-counter platforms and peer-to-peer services. Economic uncertainty and the post-COVID-19 downturn in the real estate market have driven people to seek alternative savings methods, and many have turned to crypto as a fast and low-cost way to transfer value.
The Hong Kong crypto industry also holds great potential for capital inflows. Recently, local authorities approved several Bitcoin and Ethereum ETFs and are now considering new stablecoin regulations, which promise to make them more accessible to investors. Institutional investors recognising the potential of crypto have entered the market. With an 85.6 per cent YoY surge, Hong Kong has become the fastest-growing crypto market in Asia.
Hong Kong is an emerging crypto hub within Greater China. Its well-thought-out policies have transformed it into a thriving environment for the digital asset industry. Hong Kong is open to innovation yet remains focused on strict licensing policies and consumer protection — its success may serve as a gateway to the main China market.
Centralised exchanges: Driving growth, poised to onboard millions
Centralised exchanges are the most popular category of crypto services in Eastern Asia. They account for nearly 65 per cent of the total on-chain value received in the region, which roughly corresponds to the global level.
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Much of this volume comes from large transactions, most likely made by professional and institutional investors. In Asia, the share of professional-sized transfers is the highest among all world regions. This category of crypto enthusiasts represents the primary user type of most CEXes.
Here’s what lies behind dry figures: centralised exchanges have arguably been the leading global gateway into digital assets. The crypto economy is not isolated — recognition from the global community is what gives it value. Cryptocurrencies benefit from growing integration with it, and centralised exchanges help build these ties better than anything else.
No other type of product has been able to build such a solid bridge between TradFi and crypto as CEXes: fiat and crypto deposits and withdrawals, trading, token swaps, peer-to-peer exchange, custody solutions, and much more. For retail investors, centralised exchanges are convenient for day trading, long-term savings, and remittances.
For professional traders, exchanges provide a full arsenal of tools to multiply capital. For institutional investors, CEXes serve as a convenient entry point into the market, sparing them from the hassle of self-custody and ensuring compliance when investing in digital assets.
As economic instability worldwide persists, centralised exchanges will continue to act as one-stop platforms for anyone willing to protect and increase their capital. In Eastern Asia and globally, they have helped millions embrace the new digital economy. As CEXes adapt and evolve, they will pave the way for a future where digital assets weave into the fabric of daily financial life.
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