Big moves expected for Asian cryptocurrencies in 2025: Asia Express

China’s digital yuan will gain attention again

China’s central bank digital currency was once one of the industry’s hottest topics, but 2024 has been a relatively quiet year for the digital yuan.

Nonetheless, Winston Ma, an adjunct professor of law at New York University and former managing director of China’s sovereign wealth fund, predicts that the digital yuan will see a strong push for overseas expansion in 2025.

China expanded the digital yuan to Hong Kong’s retail sector in 2024, but efforts have been slower and less aggressive than before. This slowdown was consistent with research by Yao Qian, the founding director of the People’s Bank of China’s Digital Currency Research Institute.

Yao, who is credited with leading the early development of the digital yuan, was investigated for “violation of discipline and law” in April 2024. Last November, he was dismissed from his position after being accused of accepting cryptocurrency bribes. Although Yao was no longer leading the project at the time of his dismissal, the scandal raised concerns about the integrity of the digital yuan.

Despite these setbacks, China remains committed to its digital finance ambitions. At China’s most prestigious third plenary session, attended by President Xi Jinping, the Central Committee of the Communist Party of China announced plans to refocus on the internationalization of the country’s currency, including the development of a digital yuan.

Then in November, Shanghai, China’s financial hub and most populous city, announced plans to boost digital finance, including improving acceptance of the digital yuan.

Jack Ma said the expansion of the digital yuan could meet resistance from the United States.

Ma said, “(This could be) a year in which China’s CBDC overseas expansion efforts, especially to BRICS countries, will face challenges (as Donald Trump said in a recent tweet about defending the US dollar’s ​​hegemony) “He said.

China has tested retail cross-border digital yuan payments with Singapore. It is also part of the mBridge project, a large-scale cross-border experiment with central banks in Thailand, the United Arab Emirates, Hong Kong and Saudi Arabia.

The Bank of International Settlements, often referred to as the central bank of central banks, withdrew from the project in 2024 amid an ongoing investigation into whether BRICS countries could use mBridge to evade international sanctions. BIS general manager Agustín Carstens insists that the withdrawal was not due to political reasons but to the maturity of the project.

It is too early to expect an institutional wave in Korea.

South Korea has established itself as a major cryptocurrency market in 2024, with the Korean Won leading the world in fiat trading pairs.

However, what is interesting about cryptocurrency trading volume in South Korea is that it is mainly driven by individual investors, as corporations are effectively prohibited from participating in the market.

This is because in order for Korean investors to use fiat-cryptocurrency services, they must access a local exchange that has an official partnership with a licensed bank. Investors must open a real-name account with a bank that serves as an entry point into the cryptocurrency market, linking the user’s cryptocurrency activity to their legal identity.

Although not prohibited by law, banks are reluctant to offer these accounts to businesses due to local anti-money laundering guidelines. Cryptocurrency ETFs are further hedged as they are prohibited by national capital market laws.

“Only retail investment is allowed, so institutional growth lags significantly behind other developed countries. However, the level of interest and adoption among retail investors is overwhelmingly high compared to other developed countries,” says Joo Ki-young, CEO of CryptoQuant.

Institutions are sitting on the sidelines hoping to get a slice of the Bitcoin pie, which will be worth more than $100,000 per piece in 2024 for the first time. The country’s top financial watchdog has launched a cryptocurrency committee, and one of its first tasks will be to evaluate the licensing of cryptocurrencies. Corporate cryptocurrency investors and cryptocurrency ETFs.

Ahead of the end of the year, local media, citing anonymous sources, reported that the Financial Services Commission would announce a roadmap to gradually introduce institutional cryptocurrency accounts, starting with universities and local governments in 2025.

The FSC denied the report, saying the agency had not yet made a decision, but did not deny options were on the table.

Ki expects institutional adoption in South Korea to occur once the country’s cryptocurrency taxation regulations come into effect. This year, South Korean lawmakers agreed to delay implementation of the 20% cryptocurrency tax until 2027, the third two-year delay.

“There appears to be a significant gap between the perception of the speed of institutional introduction overseas and the actual speed experienced domestically. Korean institutional investors can expect to enter as early as 2027,” Ki said.

Head-to-head competition for the Asian Cryptocurrency Heavyweight Championship

Although Singapore is vying to become a financial hub, its regulatory framework emphasizes consumer protection and market stability over retail cryptocurrency speculation. Consider cryptocurrencies with parental guidance.

In fact, cryptocurrency service providers are also prohibited from promoting their services in public places, including to third parties or influencers.

Although retail participation is not prohibited, the regulatory focus is on an ecosystem that favors institutions.

In 2024, Singapore granted regulatory approval to major industry players such as Gemini, OKX, and HashKey.

Vince Yang, CEO of zkLink, a Singapore-based blockchain infrastructure company, said significant progress has also been made in the area of ​​tokenized assets.

Last November, the Monetary Authority of Singapore unveiled a new framework to advance asset tokenization.

“We can expect much greater momentum in areas like RWA and DeFi in 2025,” Yang said, adding that retail adoption of blockchain technology is also expected.

“Singapore’s collaboration between government and the private sector is creating a conducive environment for innovation and setting the stage for incredible growth in the adoption of blockchain technology by institutions and retail.”

Singapore’s regional rival Hong Kong once took a similar approach of blocking retail access, but lifted restrictions in 2023. And in 2024, Dorsey is considering tax breaks for wealthy cryptocurrency investors and launching Bitcoin and Ethereum ETFs, setting the stage for additional institutional access. .

“Hong Kong’s bold return as a global digital asset hub this year has been defined by regulatory clarity and institutional focus, along with its unique role as an independent economic or regulatory jurisdiction to the gateway to mainland China,” says Justin d’Anethan. Hong Kong-based market analyst.

D’Anethan said the licensing regime that now allows exchanges to serve the retail sector is a clear sign that Hong Kong is reclaiming its role as a bridge between East and West for cryptocurrency innovation, with Bitcoin and Ether ETFs streamlining institutional access. He added that it was a signal. .

“The additional licenses, expected to be issued in 2025, demonstrate the city’s intention to surpass competitors such as the United States, Singapore and Dubai in attracting cryptocurrency talent and businesses. By 2025, Hong Kong can establish itself as Asia’s cryptocurrency hub, driving tokenized assets, blockchain finance, and institutional adoption.”

Innovations Reshaping DeFi, GameFi and More

Asia shook up the blockchain world in 2024 with ambitious projects, and its continued development in 2025 is expected to address industry fragmentation and leverage revived GameFi momentum while making the technology faster and more scalable.

“Across Asia, the most passionate communities and users are willing to dive into new technologies, try them out, try them out, and see what they can do. In 2024, we will see the DeFi, GameFi, and MEME landscapes continue to advance, from layer 2 developments that significantly improve throughput and reduce transaction costs, to machine learning and artificial intelligence that are already contributing to improving smart contract models.” says jointly Terence Lam. Founder of Taiko Labs.

Decentralized finance has made significant strides, with Taiko introducing the first foundational rollup to Ethereum, leveraging Ethereum validators for decentralized sequencing, and improving network scalability and compatibility with DeFi applications.

Singapore-based project Web3Auth has developed tools to simplify wallet management and improve accessibility and usability for non-crypto primary users. We have also begun exploring chain abstraction solutions to address the growing fragmentation of the blockchain ecosystem.

Meanwhile, Huddle01, an India-based DePIN project that improves video call latency and quality through Arbitrum-based decentralized nodes, has been onboarding more users through its partnership with video streaming platform FanTV, which claims to have onboarded one million users to Sui .

GameFi has also seen a resurgence in the Philippines, once the epicenter of Axie Infinity, with games like Pixels attracting large communities, while Japan’s Oasys continues to engage major gaming studios to launch their next titles on the blockchain.

“In the coming years, we look forward to helping founders and builders in the region make more fundamental and groundbreaking innovations in crypto technology, making it easier for more people to use it, further improving the user experience, such as fast transaction times of less than 1 second. We expect a lot of attention. The market is growing,” says Lam.

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He contributed as an editor to Forkast, a cryptocurrency media outlet, and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.