Evaluating Blockchain Potential in Southeast Asia

And we have lift off!

Swee Siong LEE

30 September 2018

 Southeast Asia consists 11 countries in the South of China and East of India.  Collectively the region has a population of 655 million people.  Whilst ASEAN is the intergovernmental body establish to facilitate economic, political, security, military, educational and sociocultural cooperation and integration, it is a region which sees a wide diversity in regulatory and socioeconomic standing.

Over the weekend, I gave a keynote address at Teamz Blockchain Summit in Tokyo.  The attendees included blockchain businesses, advisers, investors and enthusiasts.  Many were familiar with countries like Singapore emerging as a key hub for blockchain development and investments, but they were less familiar with what is happening with the rest of Southeast Asia collectively.

I touched on five key factors which would shape the potential for blockchain adoption in the region.  These are defined in Figure 1 below.


Figure 1: Five factors shaping blockchain potential in Southeast Asia

Population demographic

Out of the 655 million people in the region, 370 million (58%) has internet access (See Figure 2 for breakdown by key ASEAN countries).  Mobile connectivity is one of the highest globally at 141% (See Figure 3).  However, only 27% of the population has access to bank accounts.  The high internet and mobile penetration rate provide the baseline requirement for this segment of population to readily connect onto the blockchain, whereas the low bank account penetration rate points to a need for alternative access to banking services.

These statistics suggest that there is immense potential to deploy blockchain based solutions to facilitate the store and transfer of value for peer-to-peer, and also business-to-consumer.

Figure 2: Breakdown of digital penetration for key ASEAN countries1


Source: We are Social

Figure 3: Number of mobile connections compared to population2

Infrastructure Readiness

ASEAN countries are at varying stages of implementing their infocomms technology / digital strategies, covering infrastructure, skillsets and supporting industry ecosystem.  As you can see from Figure 4 below, on one end you have countries like Singapore, Philippines and Malaysia being well ahead in implementing their strategies, and on the other end you have Thailand and Vietnam still laying out their high-level strategies.

Digital infrastructure readiness is another critical ingredient which needs to be in place to support the broader based adoption of blockchain solutions.  Where speed & reliability of data transmission is an issue or where there is a lack of blockchain development talents, it will be a challenge to grow and sustain a future blockchain economy.

Source: A.T. Kearney

Figure 4: Varying stages of digital strategy implementation across key ASEAN countries3

 Regulatory Landscape

Although blockchain as a technology is readily recognized and embraced by most countries to be revolutionary and could fundamentally change the way things are done, the regulatory landscape for cryptocurrencies and ICOs in Southeast Asia is far from homogenous.  As can be seen from Figure 5 below, countries such as Singapore, Malaysia and Philippines have taken a progressive view right from the onset, with Indonesia and Thailand most recently establishing a clearer, and cautiously progressive view towards the development of cryptocurrencies in their markets.  Vietnam on the other hand, has clamped down hard on cryptocurrencies and ICOs, effectively banning all such activities after a number of high-profile scams.  Cambodia and Myanmar are fairly uncharted territories and regulators are just getting their heads around cryptocurrencies as new entrants try to operate in their markets.

Source: TrueVA Capital

Figure 5: Regulatory landscape for cryptocurrencies for key Southeast Asian markets

Government and Industry POC

There has been no shortage of blockchain experimentation and projects by both government and industry players, particularly in the more progressive countries of Singapore, Malaysia, Philippines, Indonesia and Thailand.  Some noteworthy projects are as follows:

  • Just last month, Bank of Thailand announced Project Inthanon, involving R3 and 8 banks to develop a wholesale central bank digital token to facilitate domestic funds transfer.
  • The Monetary Authority of Singapore also announced the collaboration with SGX, Nasdaq, Deloitte and Anquan to develop Delivery vs Payment capabilities for settlement of tokenised assets across different blockchain platforms.  This will be a critical precursor to enabling security token settlement, which is increasingly becoming a much talked about topic in crypto circles after the recent dismal state of the ICO markets.
  • Also in Singapore, GeTS (Subsidiary of Crimson Logic) launched Open Trade Blockchain, aimed at facilitating trade documentation handling linking ASEAN to China Belt Road Initiative.  So far, they have established strategic tie-ups with Chinese, Korean and Indonesian partners and are expecting a lot more to sign-up.
  • In Philippines, Cagayan Economic Zone Authority (CEZA) announced a project with Northern Star Gaming & Resorts Inc. to build the Crypto Valley of Asia aimed at attracting foreign investors & global Fintech players.  Most imminently, they are planning to approve licenses for 25 crypto & Fintech firms.
  • The Union Bank of Philippines also launched Project i2i in May, with plans to build a real-time, cost effective & secure retail payment on blockchain to serve 35mil unbanked population.  This can be achieved by connecting rural banks to main financial network using Union Bank as settlement bank.
  • In Malaysia, the Securities Commission (SC) & Neuroware announced a collaboration in Nov 2017 to develop DLT for the over-the-counter (OTC) market.  This pilot project was run through SC’s Alliance for Fintech (aFINity) program, and will facilitate the unlisted market activity and improve transparency.
  • In August, Indonesia announced the creation of Blockchain Hub by Indonesian Blockchain Association (ABI) and HARA, with endorsement by Indonesian Chamber of Commerce & Industry & BERKRAF.  This hub will focus on promoting DLT among companies, government, and individuals.

Public Awareness & Self-governance

The advent of ICOs in recent years is a double-edged sword.  On one hand, it brings to the masses greater awareness on possibilities of blockchain application.  On the other hand, ICO scams and speculative investments has been a dampener to the advancement of good blockchain projects.  This has given rise to the emergence of two distinct types of blockchain advocacy groups, with a common aim to engender greater public awareness, education and self-governance, for the sake of  developing a longer term, sustainable  path towards blockchain development.

In the area of public awareness and education, platforms such as ICOedge.io and The Signal Asia are formed by independently minded individuals aiming to educate blockchain newbies and crypto investors on deeper, objective reviews of projects, and harnessing opinions from thought leaders on current and future state of affairs.

In the area of industry self-governance, industry associations such as ACCESS (Singapore) and ASOSIASI Blockchain Indonesia are formed by blockchain and crypto businesses to advocate proper governance and engage with regulators.  Another group is GITA (Global ICO Transparency Alliance) which seeks to develop a global framework for self-governance and self-disclosure.

Whilst it is still early days for many of these organisations to create immediate positive impact, one would hope that their ability to reach out to a wider audience will over time create a more responsible ecosystem of blockchain businesses and well-informed investors.


Some countries in Southeast Asia have clearly checked all the boxes for the 5 factors influencing the adoption of blockchain in their markets.  Singapore by far stands out from the rest, with Malaysia, Thailand, Philippines and Indonesia catching up very quickly.  Vietnam, Cambodia and Myanmar are markets to watch as developments are still at very nascent stages.

High-profile Blockchain projects are being undertaken largely through public-private partnerships, and involving large organisations and blockchain technology companies.  These projects are mostly not cryptocurrency-related, but involve the deployment of blockchain technology for enhancing processes.

Predicating on the eventual successes of these projects, clarity of regulations, further development of distributed ledger technologies and greater self-governance and public awareness, we can expect that blockchain adoption will only proliferate a lot more over the next 3 – 5 years in Southeast Asia.  As for now, I can safely say, “We have lift off!”.



  1. Southeast Asia digital, social and mobile 2018; Available at: Link


  1. We are Social Global Digital Report 2018; Available at: Link


  1. Soon, Dobberstein (2015), The ASEAN Digital Revolution, A.T. Kearney; Available at: Link


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