Asia is increasingly investing into blockchain technology

Asia (AAXJ) (VPL) scores high when it comes to investment flow into blockchain technology and its product offerings. Venture capital deal financing into Bitcoin (ARKW) (ARKK) and blockchain technology in Asia rose from $37 million in 2015 to $119 million in 2016. Several large Chinese (FXI) (YINN) and Indian (EPI) companies are serving as venture capital investors in the development of the technology.

  • Baidu (BIDU) invested in U.S.- based bitcoin payments startup Circle
  • Huiyin Blockchain Ventures invested in US-based Purse.io
  • Indian UniCoin and Crefir China FinTech invested $30 million in US/Dutch BitFury.

Chinese blockchain/bitcoin-based startups such as Juzhen Financials, OkCoin, BTC China, and AntShares Blockchain have also raised significant funding over the course of the past 2 years.

The Chinese yuan commanded 96% of Bitcoin trading volume

Up until the beginning of this year, the Chinese yuan dominated the Bitcoin trading market with about 96% of all Bitcoin trading taking place in Chinese yuan. However, the regulatory crackdown on the rapid rise of cryptocurrency trading such as the ICO ban in China has lowered the country’s trading volume share to about 16%, according to data from bitcoinity.org.

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From a currency perspective, Bitcoin trading, as of September 1 was dominated by the US dollar (59.6%), followed by the Chinese yuan (15.8%), the euro (10.5%), and the Japanese yen (10.3%) (chart above).

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Asian economies are at the forefront of adopting blockchain technology

Nonetheless, Asian economies have been at the forefront with regard to the adoption and development of blockchain technology. Key initiatives taken in this regard include:

  • Japan (EWJ) and South Korea (EWY) already have regulated cryptocurrency environments, and are now in the process of licensing exchanges.
  • China (FXI), Hong Kong (EWH), and Singapore are leading countries in testing blockchain technology and investing into it.
  • China, whose appetite for blockchain goes beyond cryptocurrencies, is working towards developing a robust Internet finance industry supported by blockchain-enabled alternatives. For example, the Postal Savings Bank of China is testing a blockchain-based asset custody system.
  • In China, large Internet players are incorporating blockchain into their business models. AntFinancial (a subsidiary of AliBaba (BABA) is introducing a Bitcoin mobile wallet, and Tencent (TCEHY) is planning to use the technology to offer digital asset management, authentication, and “shared economies” through a new platform, TrustSQL.
  • India (EPI) has witnessed the rapid adoption of electronic payments and the rise of new market entrants. M-banking transactions have surged over the past few years as new entrants offering m-wallets continue to attract more consumers.
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