Asian Countries in It to Win It When It Comes to Being the Next Crypto Hub

The race is on to see which Asian country will take the title of being the next crypto hotspot. With big money being invested in growing their FinTech sectors, the competition is definitely heating up.


The cryptocurrency industry is a lucrative one. In its heyday, it had a market cap of just over $800 billion. While perhaps nowhere near its December 2017 peaks, it is still worth over $200 billion.

A big part of this industry is blockchain technology. With its inherent characteristics like traceability and immutability, it is a viable addition to the businesses of most sectors.

Cryptocurrencies

Technology Growth Breeds Competition

As the world continues its digital journey, more and more people will be introduced to the Internet and to smartphones, opening up that financial inclusivity door to everyone that has access to this technology. It stands to reason, then, that companies would want to invest in cryptocurrencies and blockchain.

Countries also want a piece of the action, working hard to be seen as crypto-friendly and aggressive adopters. Well-established locations like Zug in Switzerland are seeing competition from all over the world like Malta and now a host of Asian countries.

The Philippines Eyeing That Crypto Prize

Nikkei Asian Review recently reported that the Philippines is one such country. The Cagayan Special Economic Zone and Freeport seem to be well on its way to attaining that increasingly coveted blockchain- and crypto-hub status. The project will be working with a minimum of 25 technology companies to make this virtual dream a reality.

Raul Lambino, chief executive of the Cagayan Economic Zone Authority (CEZA) previously said:

The overwhelming interest from offshore companies in financial technology solutions and cryptocurrency trading that want to locate at the Cagayan Special Economic Zone has surpassed all our expectations.

Lambino also said that the initiative would aid the local economy in another way – job creation, 10,000 jobs in fact. A blockchain academy is also on the cards which will be another way to encourage growth within the industry and to provide fresh talent as well.

One way to entice more industry professionals is by making operating in the country easier, which usually leads to disregarding previous bans, easing regulations and even developing more investor-focused guidelines. To assist with this, the Philippine Securities and Exchange Commission has given the go-ahead for ICOs to happen in the country.

Lito Villanueva, the chairman of FintechAlliance, added:

With these startups come huge investments in their portfolio. Surely, each country would want to take a piece of the action. Taking blockchain and FinTech players in with enabling regulations and potential investment incentives would surely make the game more exciting.

Wild Wild East

Wild Wild East

This excitement has clearly fostered a sense of competition as South Korea has already made plans to focus on the growth and adoption of blockchain technology in the country. Jeju Governor Won Hee-ryong has previously said:

Blockchain is an opportunity for Korea to take the lead in global internet platform [development].

The country’s government will be walking the talk by investing approximately $4.4 billion on a range of initiatives incorporating blockchain as well as big data analytics.

Thailand is also in the game. While initially banning ICOs, the country developed a framework for them including a licensing process. These new regulations have subsequently resulted in interest from more than 50 projects, with three companies submitting their ICO applications for approval.

Then there is Japan, where Bitcoin is seen as legal tender. This gives them a definite advantage over their Asian counterparts but depending on future regulations in the country, this could change.

The industry is unpredictable but one of the ways for countries to come out on top is by making it easier and more lucrative for crypto businesses to invest in their FinTech sectors.

Which country do you think will be the next ‘Crypto Valley’? Let us know in the comments below!


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Japan: Finance Giant SBI Makes New Investment in LastRoots Crypto Exchange, Will Aid License Acquisition

Japanese financial services giant SBI Holdings announced in a press release Monday, August 20, that it had made a second investment in troubled cryptocurrency exchange LastRoots.

SBI, which last month opened its own cryptocurrency exchange after gaining regulatory licensing, without disclosing the amount of the investment, which follows its initial cash injection in December 2017.

“We are preparing to strengthen our in-house team to register the virtual currency exchange business,” the company explained in the release about its plans for LastRoots.

One of the exchanges singled out by regulators for improvement following Coincheck’s $530 million hack in January this year, LastRoots has had to make drastic changes to its business model in accordance with strict regulatory requirements under Japan’s new licensing scheme.

SBI will assist in the endeavor, it says, sending its own executives to bring practices up to scratch and bring the platform in line with regulation.

Its staff will “strengthen the management system… support the cryptocurrency exchange business registration [process] and business growth,” the release explains.

Last week, Japan’s Financial Services Agency (FSA), which oversees the exchange improvement and licensing process, published the results of its on-site inspections, which have been occurring for the past several months.

From now on, registrations of new exchange operators will once more be possible, local news outlets claimed, the FSA adding that these will nonetheless be subject to increased scrutiny from the outset.

How a Tokyo FOMO Family Invested in Bitcoin and Lost

Economics

There’s an issue, in Japan, with certain high income families being unable to save money. Here’s the story of a Japanese household of four, living in the Tokyo Bay area, in a high-end tower apartment, repaying multiple loans and having unnecessary spending. Every month the household was using up their entire revenue and they couldn’t pay the tuition for their daughters’ private school and high schools. That’s when bitcoin came into their lives.

Also read: The Psychology of the Cryptocurrency FOMO-FUD Cycle Has Been Weaponized

Tokyo Bay 60 Million Yen ‘Tawaman’ Tower Mansion Tribe is Collapsing

“How can we overcome paying our daughters’ schools and the family’s big expenses?” the family asks Mitsuaki Yokoyama, a financial planner. “I started investing in crypto with 100,000 yen around the end of November last year, then the price rose by 2.5 times in just a month. So I got all excited and I invested 1 million yen more, but the price crashed so badly this year, and when I finally woke up from my daydream, I found out I had lost half of all my important savings,” Masao Ikeuchi, a 42-year old company employee living in Tokyo said. With his spouse, Naoko, (a pseudonym), 42, he went to consult a financial planner. As the couple heard a husband’s colleague saying there was a way to make money very easily, they decided to jump into bitcoin. They had a great start, but soon made losses to the point of no return. “What the hell on earth happened?” the couple questioned.

How a Tokyo FOMO Family Invested in Bitcoin and Lost

The Ikeuchi family lives in a high-rise tower apartment in the Tokyo Bay area with their two daughters, one attending a second grade junior high school, the other a fifth grade elementary school, and with two cats. They enjoy the wealthy life of the so-called “Tawaman tribe”, an abbreviation for “tower mansion” used to refer to people in Japan who purchase newly built properties, mostly 3LDK (3 rooms plus a dining room-kitchen area) at about 60 million yen ($550,000).

Their take-home monthly salary is about 420,000 yen ($3,800) for the husband, about 310,000 yen ($2,800) for the wife – a total of about 730,000 yen ($6,600). In Japan, the family is considered as a privileged high-income household.

The couple earns a 15 million yen ($135,000) annual income, but they can’t pay their daughters’ tuition fees. They bought their flat eight years ago using most of their savings as a down payment of 10 million yen ($90,000), and they had been spending a lot monthly – about 710,000 yen ($6,400), so they could save only about 17,000 yen a month ($153). As of last autumn, their savings amounted to only 2.4 million yen ($21,500) and they started to get worried that they couldn’t pay their children’s school tuitions. What they needed was a way to make money somehow easily.

Bitcoin, “Easy Money”

This is why the couple sought to increase their money by making “easy investments” so they could acquire an average amount of over 1 million yen ($9,000) per year to pay the school fees and tuitions. What made Mister Ikeuchi decide to invest in bitcoin was a colleague at work who told him, “You should try Bitcoin, personally, my investment increased by 1.5 times.”

The attraction of easy money persuaded Masao Ikeuchi to read a bunch of books on cryptocurrency and understand the basics, before he purchased 100,000 yen ($900) worth of bitcoin for the first time, just for a try. He did very well at first, the 100,000 yen ($900) worth of bitcoin that he bought by the end of November 2017 rising to 260,000 yen ($2,350) in just one month. Mister Ikeuchi got so excited he purchased bitcoins for another 1 million yen ($9,000). However, the price fell to a third during the crash this year. The family man panicked and repeatedly failed to recover the losses. He even picked up on FX or individual stocks and by the time he understood what was going on he realized that the 1.1 million yen ($9,900) he had invested into bitcoin had decreased to 300,000 yen ($2,700).

He FOMO-ed

How a Japanese FOMO Family Invested in Bitcoin and LostMister Ikeuchi was caught by fear of missing out (FOMO) and the desire to get rich quickly. Due to prolonged low interest rates, deposits did not increase his savings. Moreover, the media constantly reports on success stories of investors who earned big money with bitcoin or FX. It was understandable that people like Mister Ikeuchi wished to try it for themselves.

“Investments rarely work if you jump into a nice story. If it worked for the first time, it’s often just the beginner’s luck. As far as I know, most things do not last for long,” Mitsuaki Yokoyama, the financial planner told President Online. Mr. Ikeuchi jumped to investment and failed to accumulate more than he had invested. The first thing to do in order to increase your savings is to review all living expenses, the experts says. “Regarding investments, people shouldn’t avoid making any. After reducing household expenditures, people should consider a long-term investment with small risks,” he finished.

Mr. Ikeuchi seems to have misunderstood how to make good use of his money. However, due to this failure, he should be primely positioned to improve his investment strategies, enabling him to invest more intelligently next time. 

What do you think of investors who FOMO into cryptocurrency with the desire to get rich quick? Let us know in the comments section below.


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