Despite the prevailing volatility, crypto adoption continued its upward trend this past year. The Asia-Pacific (APAC) region, in particular, almost doubled its crypto user base in 2021.
In countries such as India and Indonesia, inflation concerns were one of the primary drivers for this trend. Users were motivated to purchase crypto to hedge against the devaluation of their fiat currency.
On the other hand, those in Singapore were found investing due to the transparent regulatory environment.
“Countries like Singapore have seen local regulators express a willingness to deliberate over regulation and provide greater clarity for the cryptocurrency sector,” explains Feroze Medora, Gemini APAC’s Director of Trading.
“This relative openness to cryptocurrency has resulted in a higher rate of adoption for such markets as opposed to countries whose regulators are closed off to the industry. “
Even though the Monetary Authority of Singapore (MAS) has warned against the use of crypto as a retail investment, it hasn’t imposed any trading restrictions. The rise of crypto startups in Singapore — driven by the favourable regulations — has also helped increase awareness in the country.
As per Gemini’s Global state of crypto report, 42 per cent of crypto investors in Singapore made their first purchase in 2021.
Building sustainable markets
“The crypto landscape in Singapore has come a long way and is seeing signs of mainstream adoption,” says Medora.
That being said, regulations are still evolving to build market integrity and greater investor protection.
“We trust that the regulations will reflect the needs and wants of the local investors and create a conducive investment environment to aid the growing adoption among both retail and institutional investors,” Medora adds.
Despite the public scepticism surrounding crypto regulations in Singapore, a number of companies operating in the space have acknowledged their necessity.
When regulation is done right, it can pave the way to healthy and sustainable markets for all involved. This is the pathway to building trust, which underpins every successful market. Without it, crypto runs the risk of building a house of cards.– Feroze Medora, Director of Trading, Gemini APAC
As the crypto space gains more and more attention, there’s also a need to ensure that the infrastructure is up to scratch.
“With rapid mainstream adoption, the crypto space has to be focused on building robust technical infrastructure. This is to ensure that it can handle greater volumes of transactions, and implement proper KYC/AML measures for maximal investor protection and security,” says Medora.
The gender gap in crypto
With the exception of Indonesia, crypto adoption is led by men in most APAC countries. In Singapore, only around two in five crypto owners are women. These figures are gradually changing, and it’d seem that the gender gap is likely to close up in the coming years.
“Cryptocurrency was once seen as a space dominated by ‘Bro Culture’, much like the traditional finance world,” Medora explains. “However, this is not the case anymore as we see the asset class increasingly gain mainstream acceptance — regardless of gender.”
“While the number of women crypto investors may be lagging behind for now, findings from our report suggest that this will not last for long. Among the non-investors surveyed, a majority of those looking to invest in crypto in 2022 were women,” shares Medora.
He believes that we’re likely to see some countries reach complete gender equality for crypto, while others may tip the scale even further. “It’s very possible that, in some countries, more women will be involved in crypto than men.”
Barriers to crypto adoption
Price volatility and a fear of losses are among the primary barriers to crypto adoption in the APAC region. These concerns have risen to the prevalent use of crypto for quick flips and short-term investments.
As the space evolves, more utilities are coming to light and the scope for crypto usage is becoming broader by the day.
“The last wave of crypto adoption brought about a shift in consumer outlook,” says Medora. “More than just a hyped asset class used primarily for short-term gains, investors are beginning to look to crypto as an inflation hedge and a long-term investment.”
New regulations are playing a role in alleviating fear as well. As crypto firms work to comply with government policies, consumer protection is proving to be a priority.
For example, Singapore has been tightening KYC requirements for crypto exchanges over the past year. In the future, this could help identify scammers and reduce the potential for illicit transactions in the crypto space.
Another challenge faced by new entrants is a lack of educational resources. ‘Do your own research’ is one of the commandments of the crypto space, but it can often be an overwhelming task.
There’s still a pressing need for data aggregators and credible sources which report on crypto happenings.
“Broader adoption can be driven by building a readily accessible pool of educational resources and spreading the intellectual know-how, so that new ideas and ways of understanding crypto can be introduced,” says Medora.
Featured Image Credit: Gemini