Central & Southern Asia and Oceania: A Deep Dive into Cryptocurrency Trends for 2024

The following insights are derived from our comprehensive 2024 Geography of Cryptocurrency Report. Download your copy today!

For the second consecutive year, Central & Southern Asia and Oceania (CSAO) has emerged as the third-largest cryptocurrency region, amassing over $750 billion in crypto asset inflows from July 2023 to June 2024. This impressive figure accounts for 16.6% of the global value received, placing CSAO behind only North America and Western Europe, while significantly surpassing other regions.

Centralized exchanges are the primary drivers of crypto activity in CSAO, with transactions exceeding $10,000 making up the largest share of value received. This trend indicates a robust presence of professional and institutional investors in the market.

Indonesia stands out as the leader in the region, receiving approximately $157.1 billion in cryptocurrency value during the analyzed period.

Notably, seven of the top 20 countries in our Global Adoption Index hail from the CSAO region: India (1), Indonesia (3), Vietnam (5), the Philippines (8), Pakistan (9), Thailand (16), and Cambodia (17). Read on for an update on India's cryptocurrency regulations and the role of institutions in fostering crypto adoption in Singapore and Indonesia.

India has consistently ranked as a top global cryptocurrency market, despite its evolving regulatory and tax landscape. The country's high crypto capital gains tax (30%) and a 1% tax on all transactions, known as tax deducted at source (TDS), have prompted some Indian investors to seek out international exchanges with less stringent regulations. Nevertheless, these challenges have not impeded the overall growth of crypto in India. This year, India ranks second in the CSAO region for cryptocurrency value received and leads the world in the Global Adoption Index.

In December 2023, India’s Financial Intelligence Unit (FIU) notified nine offshore exchanges, including Binance, Kraken, and KuCoin, of their non-compliance with anti-money laundering laws, prompting a request to block their URLs for Indian customers. However, users have reportedly continued to access these exchanges through previously downloaded apps. An analysis by the Indian think tank Esya Center revealed that the impact of the URL blocking on the digital asset market was short-lived.

This sustained activity following the FIU's notice is illustrated in the accompanying chart, which compares the total value received by the blocked exchanges to the total value received in India.

Vikram Rangala, Executive Director of ZebPay, an Indian cryptocurrency exchange, expressed optimism that the FIU's blocking order would not last long and emphasized the need for regulatory clarity to foster innovation in India's crypto ecosystem. He anticipates that with improved regulations, the Indian market could see a surge in innovative startups and projects.

India's path to crypto adoption is becoming clearer, thanks to ongoing dialogue between the industry and regulators. A significant development is the FIU's recent decision to lift Binance's seven-month block, allowing the exchange to re-enter the Indian market. This change, although recent and not yet reflected in the data, is expected to positively influence India's crypto landscape in the coming years.

In Singapore, the crypto market has traditionally been driven by institutional investors, but recent trends indicate a shift towards greater participation from retail investors. Year-over-year growth in transfer sizes has been particularly notable among retail and professional investors, likely spurred by improved market conditions compared to the previous year. Additionally, regulatory efforts aimed at enhancing consumer protection may have bolstered investor confidence.

A noteworthy trend in Singapore's crypto market is the increasing acceptance of cryptocurrency as a payment method. For example, dtcpay, a Singapore-based startup, enables merchants to accept crypto payments. In March 2024, Grab, a super-app offering various services, began accepting cryptocurrency top-ups for its e-wallet, allowing users to make payments in Bitcoin, Ether, and other cryptocurrencies.

The momentum for crypto payments is evident, with merchant services in Singapore receiving nearly $1 billion in crypto during the second quarter of 2024, marking a significant increase compared to previous quarters. This trend suggests a growing acceptance of crypto among the population, even in a market with highly efficient fiat payment systems.

The steady adoption of Singapore's local stablecoin, XSGD, also highlights interesting trends. Issued by StraitsX, XSGD has seen consistent transfer values, with a significant portion of transactions occurring in smaller amounts, indicating strong retail activity. In contrast, other stablecoins pegged to the U.S. dollar are primarily transferred in larger amounts, reflecting institutional activity.

Singapore's regulatory clarity, particularly regarding stablecoins, is likely to enhance confidence among investors. In August 2023, the Monetary Authority of Singapore (MAS) finalized its stablecoin regulatory framework, introducing new requirements for issuers and establishing custody procedures for customer assets. This regulatory environment, combined with increasing merchant adoption, positions Singapore as a potential hub for digital assets, attracting global businesses and investors.

While countries like Singapore are witnessing crypto adoption driven by regulatory advancements, Indonesia's market is particularly dynamic, showcasing diverse use cases for cryptocurrency. Indonesia has the highest year-over-year growth rate in the CSAO region, nearing 200%.

Much of this activity is fueled by trading, with a recent surge in cryptocurrency transactions and interest in meme coins, according to Indonesia’s Commodity Futures Trading Regulatory Agency. Barry Matthew Meyer, Product Manager at Pintu, an Indonesia-based crypto exchange, noted that the novelty of crypto and the allure of quick profits are significant factors driving market growth. Many investors are turning to Telegram groups for trading signals, similar to trends seen in equities.

The data reflects this trend, with over a third (43.0%) of value received by local exchanges in Indonesia coming from transfers between $10,000 and $1 million, indicating professional trading activity. Indonesia also has a higher share of transfers between $1,000 and $10,000 compared to other leading countries in cryptocurrency value received.

Indonesia's burgeoning Web3 market has led to increased participation in decentralized finance (DeFi) and decentralized exchanges (DEX), surpassing both regional and global averages. Asih Karnengsih, Executive Director of Asosiasi Blockchain Indonesia, emphasized that as understanding of crypto assets grows, more users are exploring advanced platforms and services, contributing to the rise of the 'crypto degen' community engaged in yield farming and staking.

The interest in crypto among young adults, particularly Millennials and Gen Z, is significant, comprising over 50% of Indonesia's investor base. Educational initiatives by associations, local exchanges, and the government are fostering knowledge and confidence among these young investors, creating a vibrant market for innovation.

For a complete overview of the Global Adoption Index and insights into cryptocurrency trends, download the full 2024 Geography of Cryptocurrency Report now!