Blockchain innovation is expanding across Southeast Asia as the region hosts a number of global fintech and crypto companies. In particular, Singapore has become one of the most crypto-friendly countries in the world. This was recently highlighted in a report by crypto exchange Gemini, according to which 67% of 4,348 respondents currently own cryptocurrency. The report also notes that Ether (ETH) is the most popular cryptocurrency in the region, with 78% of surveyors claiming to own a digital asset.
Interestingly, the Ethereum blockchain may also be the preferred network for financial institutions located in Southeast Asia. Charles Dassey, CEO of ConsenSys in Asia, told Cointelegraph that companies in the region looking to stimulate cross-border e-commerce are choosing Ethereum for a number of reasons:
“From a technical point of view, the various central banks and financial institutions that have researched different technologies are always looking to return to the core functionality that Ethereum offers.”
Specifically, D’Ossy mentioned that financial institutions find it attractive for Ethereum to offer a smart contract team on the blockchain network, while other competing technologies can only have a smart contract team without a blockchain. D’Haussi added that the Ethereum network also gives financial institutions the ability to create accounts for specific coins. He added that this process will sound familiar to many, because “you have a bank account and banknotes that you can deposit into that account. This can be reproduced in many cases. Other technologies researched earlier cannot provide both accounts and tokens.”
Ethereum Funding in Southeast Asia
Looking at the unique features of Ethereum, D’Ossi noted that financial institutions across Southeast Asia are using it in different ways.
For example, Daniel Lee, CEO, COO and Listing of DBS Digital Exchange (DDEx) – a digital exchange backed by DBS, one of the largest banking groups in Asia that provides trading services for a variety of digital assets, including security tokens and cryptocurrencies. – Tell Cointelegraph. That the company is using Ethereum to exchange security tokens:
“We are using Ethereum as the allowed blockchain for this purpose. The tokens we use are based on ERC-777, which allows us to create an exchange for this product. And since everything runs on the blockchain, it replaces the traditional central repository or clearing house.”
Specifically, one can list ERC-777 tokens that are backed by stocks, interest rates, or other real-world assets. These records can then be viewed for secondary recirculation. He explained to me that a security token exchange could make it easier to sell assets on a secondary basis: “When someone wants to sell these assets, they can only list them as an offer on the exchange. And whoever needs a special amount can only promise this offer.”
In addition, Lee pointed out that DDEx has studied other blockchain networks in addition to Ethereum to enable the exchange of security tokens. However, he noted that Ethereum was the better choice due to how easy it is to find programmers familiar with Solidity, a programming language designed for developing smart contracts on Ethereum.
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D’Haussi also notes that Partior – a blockchain-based interbank clearing and settlement network established by DBS Bank, JP Morgan and Temasek – is also built on Ethereum. As part of the Partior project, Lee shared that DDEx will soon launch its Singapore dollar stablecoin on the Partior Network. This applies to similar use cases due to the diversity of service providers, the multiplicity of developers, and the range of services available on Ethereum, according to d’Ossi. “Many other blockchains will not be able to provide such a rich and mature ecosystem. This is why it is not suitable for many financial institutions,” said Ducey.
It is also interesting to note that China’s participation in blockchain innovation is increasing. While DAssy believes that there is no enthusiasm for cryptocurrency in the region, he mentioned that China is a major developer of blockchain networks. For example, while China recently warned state-owned companies to stop cryptocurrency mining, D’Aussie mentioned that ConsenSys Quorum — an Ethereum-based distributed ledger protocol — is doing well in the region: “The networks allowed in mainland China are preferred. …the framework and Corum are currently being used for a network of blockchain-based services, a nationwide blockchain project backed by the Chinese government.”