Southeast Asia Eyes Digital Currencies for the Future

Southeast Asia seems open to blockchain technology and the digitization of currency even though most public continues reliant on cash.

As the digital age advances apace, central and private banks globally are experimenting with technology to support faster, sleeker, and more reliable economic events.

In Southeast Asia, while completion of the region continues steadfastly cash-based, hubs in Singapore, Vietnam, and Thailand are practicing the lead in promoting digital transactions within the blockchain.

Blockchain is a technology that promotes transactions through an electronic data ledger that cannot be reconstructed, which proponents say decreases friction and improves trust between parties, encouraging economic growth.

The applications for the technology, however, go beyond payments. For example, in Vietnam, the government in Ho Chi Minh City is pursuing blockchain to streamline business within the energy, transportation, and urban development sectors. At the same time, Singapore is emerging as one of the world’s most prominent research locations for the broader use of blockchain technology across industries.

Blockchain Startups In Southeast Asia

Blockchain technology is a burgeoning force in Southeast Asia. Although the COVID-19 pandemic created a slight market drop of 7.27% from $2.45 billion in 2019 to $2.27 billion in 2020, the blockchain market is likely to get a quick comeback conferring a potential annual growth of 91.25% to reach $15.88 billion by 2023. 

The Asia Pacific region seems to be the fastest-growing throughout this period. The necessity for security, clarity, and digitalization amidst the pandemic has committed to the rise of blockchain in Asia. With such hopeful prospects on the horizon, many blockchain startups are not surprising to rise to prominence in the Southeast Asian market. 

LuxTag

Established in 2017, LuxTag is the digital age solution to counterfeit commodities in the luxury consumer goods division. It utilizes blockchain to seamlessly blend real-world physical products and digital assets, holding product verification, timestamped proof of ownership, and track & trace of goods to prevent copycats. 

LuxTag allows various products, including LuxTag SUN (Secure Unique NFC) Authentication Service, establishing the NFC tags’ authenticity, and Papyrus, which generates digital tokens of real-world assets to build a trail of ownership in just four easy steps. After signing up, it’s possible to create a blockchain certificate of the physical product, add images and detail, maintain the certification by scanning with the LuxTag app, then generate a QR code or NFC link to connect the physical and digital asset. The integration of blockchain has excellent application in the fightback against fake goods in trade.

DiMuto

DiMuto expresses itself as: “a trade technology service championing Collaborative Commerce. They achieve end-to-end supply chain visibility for global corporations. It guarantees the traceability and trackability of company documents, goods. In addition, it supports each transaction on its platform.

The Singapore-based startup, established in 2018, gives a 360 trade service for a comprehensive supply chain solution with 4 T trade visibility: traceability, transparency, trackability, and trust.

Triterras Fintech

Established in 2018 in Singapore, Triterras Fintech intends to help choose the nearly $1.5 trillion funding gap in SME business finance. International trade finance is a complicated process, and banks manage to deny several SME loan requests as they are not cost-effective. Triterras recognized an opportunity to connect lenders with commodity traders and, in 2019, originated their blockchain-enabled global trade and finance program, Kratos. 

Kratos encourages transparency, protection, and efficiency throughout the trading method and highlights the advantages of fully digitalizing trade. It aids in decreasing paperwork, risk, deception, and human error and has 24/7 accessibility with traceability timestamped transaction history. The program also serves to reduce overhead costs leading to improved profitability. As of August 2020, Kratos has facilitated 4,800 transactions and above $8.7 billion in transaction quantity.

ShuttleOne

Currently serving in Thailand, Malaysia, Singapore, Indonesia, and China, ShuttleOne is creating a “DeFi” solution to digitize lending and remittance movement for SMEs. DeFi, a portmanteau of ‘decentralized finance,’ relates to building an extensive, global financial system in the blockchain space with other complex utility cases, like digital lending, financing, and risk management. 

So far, ShuttleOne has assisted more than 4,000 ASEAN SMEs, enabling its customers to make remittances and loan deals. Its program also offers end-to-end loan documentation using blockchain to increase loan processing while concentrating on mobile integration. In addition, combining SMEs with licensed money service providers wishes to promote international remittance assistance in real-time.

HARA

The name HARA originates from the Bahasa word meaning soil nutrients—very fitting for a company concentrated on getting agricultural data from rural areas. HARA, based in Indonesia, declares that its mission is to “support inclusive, sustainable growth and provide to the economic prosperity of people in agricultural communities through the switch of valuable data.” They have created an ecosystem that rewards and combines rural farmers with banks and insurance firms by yielding data. 

These field representatives, or “Agripreneurs,” use the gamified app to provide data and compensate HARA Token redeemable for various products and services. The ecosystem’s four main elements are data providers, data qualifiers, data buyers, and value-added assistance that all share and profit from utilizing the platform. 

As of February 2020, HARA has combined over 31,300 farmers in 741 villages across Indonesia and expedited $13.5 billion in microloans. In addition, it holds to expand into other international markets in the future.

These are merely a sampling of the several blockchain startups beginning in Southeast Asia. With the market stretching to grow, we anticipate seeing many others follow their orders in the subsequent years. Each startup has a particular focus that encourages them to find a unique niche in the ever-diversifying blockchain business. The technology’s potential applications to improve citizens’ lives are many—from expanded insurance and low-cost remittance services to peer-to-peer networks that could make it easier to preserve and borrow money.

Wrap Up

In the long run, though, blockchain’s most notable legacy could be improved economic and social efficiency, which will only assist in fueling the livelihoods of average Southeast Asians.

There is no doubt that the alliance of blockchain technology into methods like funds transfers will help boost efficiency, decrease risks and drive down overall costs in the financial ecosystem—all of which will, in turn, allows consumers.