Blockchain innovation is booming throughout Southeast Asia because the region has many fintech companies and global crypto companies. In particular, Singapore has become one of the most crypto-friendly countries in the world.This was highlighted in a report recently Report by the cryptocurrency exchange Gemini, Which found that 67% of the 4,348 respondents currently own cryptocurrency. The report further pointed out that the ether (Ethereum) Is the most popular cryptocurrency in the region, with 78% of investigators claiming to own the digital asset.
Interestingly, the Ethereum blockchain may also be the network of choice for financial institutions in Southeast Asia. Charles d’Haussy, Asia managing director of the blockchain company ConsenSys, told Cointelegraph that companies in the region that want to support e-commerce cross-border payments prefer Ethereum for a variety of reasons:
“From a technical point of view, different central banks and financial institutions that have been exploring various technologies always tend to return to the basic features provided by Ethereum.”
Specifically, d’Haussy mentioned that financial institutions find it attractive for Ethereum to provide a smart contract layer on the blockchain network, while other competing technologies may only have a smart contract layer without a blockchain. D’Haussy added that the Ethereum network also provides financial institutions with the ability to create accounts for certain tokens. He added that this process sounds familiar to many people because “you have a bank account and banknotes that can be deposited into that account. This can be reproduced in many use cases. Other technologies explored in the past cannot provide accounts at the same time. And tokens.”
Ethereum in Southeast Asia’s financial sector
Given the unique features of Ethereum, d’Haussy pointed out that financial institutions throughout Southeast Asia use it in a variety of ways.
For example, Daniel Lee, executive director and head of business and listing of DBS Digital Exchange (DDEx), told Cointelegraph that the company is using Ethereum for security token exchanges:
“For this, we use Ethereum as a permissioned blockchain. The token we use is based on ERC-777, which allows us to create an exchange for this product. And because everything runs on the blockchain, it It replaces the traditional central depository or clearing house.”
In particular, ERC-777 tokens backed by stocks, fixed income, or other real-world assets can be listed. These lists can then be provided for a second retransaction. Lee explained that security token exchanges can facilitate the sale of secondary assets: “Now, when someone wants to sell these assets, they can publish them as an offer on the exchange. No matter who wants that specific amount. , They can cancel that offer.”
In addition, Lee stated that DDEx has also studied other blockchain networks besides Ethereum to accommodate its security token exchange. However, he pointed out that Ethereum is the best choice because it is easy to find programmers familiar with Solidity, which is a programming language designed for developing smart contracts on Ethereum.
D’Haussy further pointed out that Partior— Blockchain-based interbank clearing and settlement network It was jointly established by DBS Bank, JPMorgan Chase and Temasek-also built on Ethereum. As part of Project Partior, Lee shared that DDEx will soon issue its own Singapore dollar stablecoin on the Partior network. According to d’Haussy, this is the case for similar use cases due to the diversity of vendors, the wealth of developers, and the various services offered on Ethereum. “Many other blockchains will not be able to provide such a rich and mature ecosystem. Therefore, this is not feasible for many financial institutions,” d’Haussy said.
It is worth noting that China’s participation in blockchain innovation is increasing. Although d’Haussy believes that the region is not interested in cryptocurrencies, he mentioned that China is the main builder of blockchain networks.For example, despite China’s recent warnings about state-owned enterprises Stop mining cryptocurrency, d’Haussy mentioned that ConsenSys Quorum-ConsenSys’s Ethereum-based distributed ledger protocol-performed well in the region: “The permission chain in Mainland China is the most popular framework, and Quorum is currently used Blockchain-based service network, A national blockchain project supported by the Chinese government. “
Will the limitations of Ethereum hinder adoption?
Although Ethereum may be widely used for various purposes throughout Southeast Asia, people are still worried High gas costs and scalability issues of the networkHowever, according to Lee, DDEx is using Ethereum to list and trade securities tokens on a licensed blockchain, so high gas fees are not a problem. “We don’t use mining as a consensus mechanism. We use IBFT as our consensus mechanism. Based on this, gasoline fees don’t really apply to us,” he said. D’Haussy added that the high gas cost further proves the needs of Ethereum, and pointed out that the second layer of solutions is being implemented to Solving the main challenges facing Ethereum Nowadays.
Despite this, some financial institutions in Southeast Asia have begun to seek other blockchain networks. For example, RippleNet-the global payment network of the blockchain company Ripple-is being used for cross-border transactions throughout the region. Brooks Entwistle, managing director of RippleNet Asia Pacific and MENA, told Cointelegraph that the Asia Pacific region has become one of RippleNet’s fastest-growing regions, with transaction volumes more than doubling since the third quarter of last year.
Entwistle added that after Ripple Interested in acquiring 40% equity At Trangloa, a cross-border payment processing center, the company promotes a new on-demand liquidity corridor in the Philippines. He further shared that the Japanese remittance company SBI Remit is using Ripple’s ODL service to change the remittance payment method for a large number of Filipinos in Japan. Entwistle explained:
“This has a profound impact on accelerating financial inclusion and creating economic equity and opportunities, especially in regions where some of the world’s largest remittance recipients are located, such as the Philippines.
Therefore, while Ethereum continues to have a significant impact in Southeast Asia, other blockchain solutions are indeed emerging. E.g, Solana blockchain has always attracted the interest of enterprises Because of its high transaction speed and low cost. Henri Arslanian, PwC’s cryptocurrency principal and partner, told Cointelegraph that as financial institutions become more aware of different first-layer solutions, other blockchain networks are also being used:
“Each first-tier solution has different functions, from speed and scalability to transaction fees and carbon footprint. Each organization has its own priorities and use case requirements, which may make them choose a network instead of Another kind of network.”