Southeast Asia: the region's leadership in the development of the digital economy and blockchain technologies
12 August 2020
In the first half of 2020, the Southeast Asian region has become a leader in the introduction of digital payment technologies. Governments of countries officially support the strategy of transition to the digital economy and blockchain technologies.The South-East Asia region is home to one of the fastest growing adoption rates of the payment type. The number of digital payments is expected to reach the $ 1 trillion mark in 2025. The Internet economy of the world has about 400 million users using a non-cash payment method, two-thirds of which are located in Southeast Asia.
As the digital economy of the region continues to grow, it is natural that traditional forms of storing valuables, such as gold, are also gradually undergoing the process of digitalization. It is noted that gold consumption in 10 ASEAN countries reached 309 tons in 2018. This makes the region the third largest gold market in the world. Indonesia, Thailand and Vietnam together account for more than 80% of the region's gold market.
The transition to digital technology has simplified the process of buying bitcoins — the so — called digital gold-by major consumers, since it has eliminated the need for insurance and storage of purchased funds.
South-East Asian governments have also played a crucial role in helping emerging financial innovations gain popularity and credibility among the population.
As a result, countries such as Singapore received more than us $ 875 million in investment in the FINTECH sector in 2019, more than double the investment figures compared to the previous year. This clearly demonstrates the growth of the region's potential.
Given the fact that the digitalization of the economy is becoming necessary and increasingly important to ensure the proper stability and sustainability of the region's development in the future, the governments of South-East Asia support the development of new technologies through grants and funding. This government support helps to increase user confidence in new technologies.
Despite the COVID-19 pandemic, South-East Asian governments remain focused on accelerating development and introducing new technologies. The most relevant initiatives in the context of the spread of the virus were the transfer of money transactions to non-cash form, since this made it possible to reduce physical contact and thus control the incidence.
The Singapore government has allocated us $ 364 million to increase the number of businesses working with electronic payments. Malaysia has legalized e-wallets at the state level.
As a result, South-East Asian countries have seen an increase in the introduction of digital payments in the first half of this year. Singapore's Deputy Prime Minister, hen Swee Keith, announced that more than 50,000 companies have switched to a cashless payment system since April 2020, while Malaysia reported a 1.7-fold increase in non-cash transactions. While before the pandemic, digital payments were considered only as a convenience, now they are almost a necessary system.
Organizations and governments throughout Southeast Asia are supporters of implementing blockchain technology in their economy, so they strongly support various initiatives related to this. Singapore has officially announced support for companies working with blockchain technologies. The country's state Agency Enterprise Singapore has acted as a sponsor of the Tribe Accelerator project, which aims to help start-up projects related to working with blockchain technologies and accelerate their introduction to the service market.
It is noted that at the moment, the region of Southeast Asia has the highest potential in the development of the world economy, as the governments of countries legalize the use of bitcoins as payment. By encouraging further work in this direction, States only become more attractive to international investors, whose funds, in turn, enrich the country's economy and help it develop.