Introduction
Global crypto adoption continues to grow rapidly with increasing public interest and the formation of crypto community. Many countries, especially in Southeast Asia, have started to rely on crypto for transactions and investments. Easy access through trading platforms and digital wallets has attracted more people to try crypto. The crypto community plays a key role in driving crypto adoption, not only through economic factors but also regulations.
Southeast Asia plays a significant role in the global crypto adoption map. According to data from the 2024 Geography of Crypto Report by Chainalysis, several Southeast Asian countries such as Indonesia, Vietnam, the Philippines, Thailand, and Cambodia rank among the global top 20. The main factors driving this growth are increased activity on local exchanges, merchant adoption, and involvement in DeFi.
In this research report, AllSpark Research aims to understand how the crypto community in Southeast Asia can help drive global crypto adoption. The scope of this article is based on data from Chainalysis, which includes the Global Crypto Adoption Index Methodology, key drivers of Crypto Community Growth, countries driving crypto adoption (Indonesia & Singapore), and the challenges and future of the Crypto Community in Southeast Asia.
Global Crypto Adoption Index Methodology
In the 2024 Geography of Crypto Report, Chainalysis created the Global Crypto Adoption Index. Chainalysis ranks 151 countries with sufficient data for each sub-index. Then, Chainalysis assigns weights to the rankings based on characteristics, including population size and purchasing power, calculates the geometric mean of each country’s ranking, and normalizes the final numbers on a scale from 0 to 1. This is done to give each country a score that determines its overall ranking.
The closer the final score of a country is to 1, the higher its ranking. To calculate the sub-index, Chainalysis estimates the country’s transaction volume for various types of crypto services and protocols based on web traffic patterns of the websites for those services and protocols.
This index consists of four sub-indices that assess the use of various crypto services by countries. The sub-index categories include the on-chain crypto value in centralized services, the on-chain retail transaction value in centralized services, the on-chain crypto value in DeFi protocols, and the on-chain retail transaction value in DeFi protocols.
Meanwhile, the measurement method includes on-chain transaction volume for various crypto services and protocols based on web traffic. Although VPNs may affect location data accuracy, this method still provides a fairly accurate picture as it encompasses hundreds of millions of transactions and billions of website visits.
Based on the data, between the fourth quarter of 2023 and the first quarter of 2024, the total value of global crypto activity increased substantially, reaching levels higher than in 2021 during the crypto market boom. Meanwhile, the index scores of 151 countries are updated each quarter from Q3 2021 to Q2 2024, reflecting global adoption growth over time.
Southeast Asia: The Crypto Community Growth Hub
There are several factors driving the growth of the crypto community in Southeast Asia. These factors include increased activity in local exchanges, merchant adoption, and involvement in DeFi. Additionally, the wide access to the internet and mobile banking penetration can facilitate transactions, thereby driving crypto adoption.
The tech-savvy young population in Southeast Asia, who are familiar with digital devices and innovative applications, is accelerating crypto adoption. Furthermore, the evolving and innovation-supporting regulations create a more conducive environment for the development and implementation of technology. Governments and relevant institutions that regulate and facilitate the use of technology with supporting policies help expedite adoption
The crypto community has a significant impact on the digital economy, as the underlying blockchain technology enables faster and more secure transactions without intermediaries. This accelerates the adoption of digital currencies among users and businesses, creating new opportunities in sectors like finance, trade, and investment.
Key Countries in the Crypto Community Boom
A. Indonesia: The Rapidly Growing Crypto Community
In Southeast Asia, Indonesia leads the region in terms of the value of cryptocurrency received during the researched period, which amounts to approximately $157.1 billion. Indonesia has become one of the most active markets in Southeast Asia, with local traders increasingly seeing opportunities in crypto transactions.
Indonesia is showing strong growth trends in crypto adoption. With a population of over 270 million, Indonesia has a large market for digital financial services, including cryptocurrency. One of the driving factors for crypto adoption in Indonesia is regulation. The Indonesian government has implemented regulations that increasingly support the crypto ecosystem. The Commodity Futures Trading Regulatory Agency (Bappebti) has been overseeing digital asset trading, while local crypto exchanges like Indodax and Tokocrypto are rapidly growing.
In addition, the number of crypto investors in Indonesia has surpassed 17 million, exceeding the number of stock investors in the country. This reflects growing public confidence in digital assets as an alternative investment. Indonesia is one of the fastest-growing crypto markets in Southeast Asia, with the highest year-on-year growth of nearly 200%.
According to the Indonesian Blockchain Association, a non-profit organization dedicated to fostering blockchain development, adoption, and education, with increasing understanding of crypto assets in Indonesia, a crypto community known as ‘crypto degen’ has emerged. Members of this crypto community actively participate in yield farming, staking, and various token projects on DeFi platforms
The Indonesian crypto community is predominantly made up of young adults who are interested in new technologies and ways to earn quick profits. Millennial and Gen Z users reportedly make up more than 50% of the current investor base in Indonesia. Various literacy activities regarding crypto adoption are carried out by crypto communities in Indonesia.
These activities include educational programs at universities in Indonesia, which in turn spark interest and knowledge among young investors. With the large number of young people joining crypto communities, they can explore blockchain further and confidently navigate the crypto market. This is what drives the dynamic and innovative investment landscape in Indonesia, ultimately fueling global crypto adoption growth.
This trend shows that Indonesia is not only a developing market but also an innovation hub in the crypto world. With a continuously growing community and increasingly accepted blockchain technology, Indonesia has the potential to become a major player in the global digital economy. Progressive regulatory support and active participation from the younger generation further strengthen Indonesia’s position as a mature crypto ecosystem.
B. Singapore: Asia’s Crypto Financial Hub
As a crypto financial hub in Asia, Singapore has solidified itself as one of the main hubs for blockchain innovation and cryptocurrency. The country has a clearer and more progressive regulatory approach compared to many other countries in Southeast Asia. A key factor in Singapore’s success in the Crypto Ecosystem is the Progressive Regulation by the Monetary Authority of Singapore (MAS), which has introduced a clear regulatory framework that provides certainty for crypto companies to operate legally and safely.
Many major blockchain companies and crypto exchanges, such as Binance, Crypto.com, and Gemini, have chosen Singapore as their operational base in Asia. Additionally, investment in blockchain technology development is steadily increasing.
An important aspect of Singapore’s crypto market is the growing adoption of crypto as a payment method for various services. For example, the Singapore-based startup dtcpay allows merchants to accept payments in cryptocurrency. Recently, in March 2024, the Singapore-based super app Grab, which offers access to taxi services, food delivery, and similar conveniences, began accepting wallet top-ups through cryptocurrency. Users can now make payments in Bitcoin, Ether, the Singapore local currency stablecoin XSGD, Circle USD, and Tether.
Moreover, the momentum for crypto payments seems to be increasing. In the second quarter of 2024, the total value of crypto received by merchant services in Singapore reached nearly $1 billion — far higher than in any other quarter over the past two years. This trend in crypto payments is particularly interesting in a market where retail fiat payment systems are already highly efficient, as it signals the growing presence of crypto among the general public.
The adoption of the local XSGD stablecoin tells another fascinating story. XSGD is issued by StraitsX, a holder of the Major Payment Institution license in Singapore (MAS). More than 75% of the value of XSGD transferred during the studied period occurred in sizes of $1 million or less, with nearly 25% of transfers under $10,000, which indicates a strong retail activity base. In contrast, other US-dollar-pegged stablecoins were mostly transferred in large sizes over $1 million, showing institutional activity. Since the third quarter of 2022, the value of XSGD transfers has remained stable, with most quarters seeing activity over $200 million.
The rapid growth of the crypto ecosystem in Singapore has also contributed to the development of an increasingly active and dynamic crypto community. The presence of many blockchain companies based in Singapore has created an environment conducive for crypto enthusiasts, whether investors, developers, or innovators, to exchange insights and build collaborations.
The presence of local stablecoins like XSGD also helps bridge the gap between traditional financial systems and digital assets. This enables more stable and efficient transactions. The combination of supportive regulation, a growing ecosystem, and strong crypto community engagement makes Singapore a model for other countries in building a sustainable and inclusive crypto ecosystem.
Challenges and the Future of the Crypto Community in Southeast Asia
A. Crypto Fraud Challenges
Southeast Asia faces challenges in crypto adoption that impact the crypto community. These challenges include the use of unregulated platforms for illicit activities. The United Nations Office on Drugs and Crime reported that criminal networks in Southeast Asia extensively use messaging apps like Telegram. These apps are used to facilitate large-scale illicit activities, including money laundering through unauthorized cryptocurrency exchanges.
Moreover, crypto fraud in Southeast Asia has become a significant threat in recent years, with criminal syndicates leveraging advanced technology to deceive victims. One common method is a scheme known as “pig butchering,” where scammers build fake relationships with victims to convince them to invest in fraudulent crypto platforms. These operations are often run by organized crime syndicates that force individuals to work in scam centers across Southeast Asia. [1]
These incidents emphasize the importance of investing in more advanced security systems. Additionally, implementing strict data protection protocols is crucial to maintaining integrity and trust in the crypto ecosystem.
B. Market Volatility Challenges
Market volatility is also a crucial issue affecting the crypto community in Southeast Asia. The highly fluctuating prices of digital assets can yield high returns in a short time, but on the other hand, they also pose significant risks of loss. This uncertainty is worsened by the lack of transparency and insufficient risk control mechanisms, especially on DeFi platforms vulnerable to coding errors and fraud practices like “rug pulls.” Therefore, implementing effective risk management strategies as well as clear regulations becomes an essential step to stabilize the market and protect the interests of all parties involved.
C. Potential of Blockchain Innovation Hubs
Southeast Asia has shown significant potential to become a global blockchain innovation hub thanks to strong support from its dynamic crypto community and favorable regulatory policies. Various initiatives and events, such as Coinfest Asia in Indonesia, TOKEN2049 in Singapore, and Southeast Asia Blockchain Week in Thailand, demonstrate the enthusiasm and commitment of the crypto community in the region to advance blockchain technology.
In addition to hosting events, Singapore has also played a vital role by implementing innovative policies and making significant investments. For instance, Singapore allocated $112 million to support Web3-based fintech solutions. These collaborative efforts not only attract the interest of local developers and investors but also invite participation from the global crypto community.
Economic growth and market potential also support the sector’s advancement, with the Southeast Asia Web 3.0 market projected to reach nearly $3 billion by 2032, with an annual growth rate of 40.1%. Furthermore, developments in the blockchain gaming sector show a positive trend, further solidifying the region’s position on the international stage. The synergy between communities, government support, and strategic investments has created an innovative ecosystem. This makes Southeast Asia a center of growth and innovation poised to compete on a global level. [2]
Conclusion
Southeast Asia has become a global crypto adoption hub, with countries like Indonesia, Vietnam, the Philippines, Thailand, and Cambodia ranking among the top 20 in the Global Crypto Adoption Index. Factors such as increased activity on local exchanges, adoption by merchants, and engagement in DeFi have driven this growth. In Indonesia, the crypto community has expanded rapidly, with transaction values reaching $157.1 billion, supported by favorable regulations and active participation from the youth.
Meanwhile, Singapore has solidified its position as a crypto financial hub in Asia, with progressive regulations and increasing crypto adoption as a payment method. However, challenges such as crypto fraud and market volatility remain major concerns. With a dynamic community and supportive policies, Southeast Asia has the potential to become a global blockchain innovation center.
Additionally, with the rising adoption of crypto assets, Southeast Asian countries are poised to become centers of innovation and investment in this sector. Looking ahead, the crypto industry in Southeast Asia is expected to continue developing with clear regulatory support and sustainable technological innovation. Governments in the region are anticipated to provide significant impetus for the crypto and blockchain technology communities, creating an environment conducive to inclusive and sustainable digital economic growth.