Preface
I have been communicating with several colleagues in the past few days and discussed which market in Southeast Asia has more development potential, but is often ignored, and Vietnam is mentioned invariably. Some people are curious as to why it is Vietnam, as several reports last year and this year have This aspect has been described, and I also heard a Twitter Space discussing this aspect yesterday.
In recent years, the crypto market in Southeast Asia has grown very rapidly. Currently, the total crypto population is approximately 46 million, second only to the North American market. Although the region is dominated by low- and middle-income countries, and the per capita purchasing power is not as good as that of developed regions, some Southeast Asian countries (such as Vietnam, the Philippines, and Thailand) have outstanding crypto user shares, and crypto activities have penetrated into many daily life scenarios. inside.
Therefore, this article will briefly summarize several reports to explore why Vietnam, a country with a population of less than 100 million, ranks first in cryptocurrency adoption.
The content of this article is simultaneously published in the "Chain Flash" column.
Chainalysis《The 2022 Global Crypto Adoption Index》
Vietnam ranks first in cryptocurrency adoption for second year in a row
As can be seen from the ranking, Vietnam shows extremely high purchasing power and population adoption for centralized services, DeFi, and P2P cryptocurrency tools. Vietnam’s love for cryptocurrencies is also noted in other data.
A 2020 poll found that 21% of Vietnamese consumers reported using or owning cryptocurrencies, second only to Nigeria’s 32%, and adoption rates have likely only increased since then. Reports in local media indicate that cryptocurrency-based games, including those with P2E and M2E models, are particularly popular in the Southeast Asian country.
This applies not only to users but also to developers, as the success of the top-grossing P2E game Axie Infinity is based in Ho Chi Minh City and has inspired more crypto gaming startups to succeed in Vietnam.
Huobi Research Institute's "Global Blockchain Industry Panorama and Trends 2022-2023 Annual Report"
Vietnam: Top country in cryptocurrency adoption
The main reasons for the growth of emerging crypto markets in Southeast Asia, represented by Vietnam, are as follows:
Comply with local financial reform and modernization requirements. In the past decade, Southeast Asian countries and governments have attached great importance to emerging technologies such as blockchain and expect them to pave the way for economic digitization. In Vietnam, cashless payments have gradually become the norm in the country, and the local government has set a relatively loose crypto tax to expand the adoption of cryptocurrency; at the same time, due to the underdeveloped traditional financial system in the region, the services available are very limited, resulting in users having to Not switching to more efficient cryptocurrencies.
GameFi has become a popular investment scenario among users. Based on the humanistic environment and consumption habits in Southeast Asia, games are an extremely important part of the region. According to public data, the highest mobile game download volume in Indonesia in 2020 was 38%, followed by Vietnam at 22%; the Philippines and Vietnam ranked high in terms of game payment rates, at 55% and 50% respectively. The developed game industry environment also provides good soil for the birth of blockchain games. In 2021, the phenomenon-level chain game Axie Infiity came out. Its innovative "Play-to-Earn" model quickly ignited market enthusiasm and attracted a large number of users and funds to rush in. Southeast Asia has undoubtedly grown into GameFi's center.
The number of crypto users in Southeast Asia is approximately 20 million, accounting for more than one-fifth of its total population, successfully ranking among the top countries in the world with high cryptocurrency adoption. These data fully demonstrate the crypto market potential and prospects in Southeast Asia.
The Vietnamese Government’s Attitude towards Cryptocurrencies
Although as early as 2018, the State Bank of Vietnam explicitly prohibited the use of cryptocurrencies as a means of payment, and companies that dealt with cryptocurrencies were fined. However, because the adoption and demand for cryptocurrencies is so high in Vietnam, it is difficult for the Vietnamese government to fully control their use. In addition, the Vietnamese government has also begun to realize the potential and importance of cryptocurrency and is exploring how to regulate and manage the cryptocurrency market. Therefore, in 2021, Prime Minister Pham Minh Zheng ordered the State Bank of Vietnam to start researching and conducting tests on cryptocurrency. At the same time, he stated that cryptocurrency and blockchain are technologies that Vietnam hopes to develop and master, which will help build a digital government.
Vietnam uses cryptocurrencies because its banks are terrible. 69% of Vietnamese are unbanked, the second-highest rate in the world. The government forces banks to make bad loans, and then those banks fail. Maybe this undermines public trust? Regardless, the lack of access to banking and remittances (such as from Vietnamese Americans) has also led to Vietnam leading the world in cryptocurrency adoption.
In addition, there are already some successful cryptocurrency companies established in Vietnam, such as Coin98 Finance, Axie Infinity and Kyber Network. These companies will encourage more enterprises to enter the cryptocurrency market and further increase the popularity of blockchain technology. Coupled with the vibrant blockchain community in Vietnam, many new startups hope to explore more blockchain applications instead of being limited to cryptocurrency.
in conclusion
Although the report mentioned in this article has indeed shown Vietnam’s advantages and enthusiasm for cryptocurrency, I personally believe that the accessibility and usability of cryptocurrency still need to be improved. After all, the current encryption industry in Vietnam still needs to create more specific solutions to meet the needs of Vietnamese users and users in other low-middle-income and upper-middle-income countries, thereby improving the overall market.
As mentioned before, there are still many practitioners who are not very familiar with the cryptocurrency market in Vietnam, and even currently they are still stuck in chain games; but the advantage is that compared with other countries, people in Vietnam are not very familiar with "cryptocurrency". Currencies are less exclusive and thus provide opportunities for new startups and the crypto industry.
missing report
Interestingly, during the process of collecting information, I saw that many media mentioned that Coin98 Insights had a "Vietnam Cryptocurrency Market Report 2022" in March this year, but the source was a Japanese website - VietJo.
He also stated that there are currently about 200 blockchain projects in operation in Vietnam, and Vietnam has more than 16.6 million cryptocurrency holders, second only to Thailand in ASEAN. Among them, Coin98, Axie Infinity and Kyber Network are the three most famous blockchain projects in Vietnam.
However, this report is actually nowhere to be found on the Coin98 Insights website. Regarding the discussion of the cryptocurrency market, there is only one "Crypto Market Report H1 2022" to provide an overview of the global market, and it does not mention the aforementioned mention. Vietnam market conditions.
If anyone has the source of this report, I hope you can share it.
References
Chainalysis《The 2022 Global Crypto Adoption Index》
Huobi Research Institute's "Global Blockchain Industry Panorama and Trends 2022-2023 Annual Report"
Cryptocurrency in Vietnam - statistics & facts
Why are countries becoming more open and less “hostile” towards cryptocurrencies?
Understand the history, present and future of Web3 in Vietnam in one article
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