Ethereum

Cryptocurrency

2024

Bitcoin

Stablecoins and cryptocurrencies are starting to replace fiat currencies in some Eastern Asian countries, highlighting their significance in emerging economies.
Eastern Asia emerged as the sixth-largest crypto economy in 2024, accounting for over 8.9% of global cryptocurrency value received between June 2024 and July 2023, according to a Sept. 17 <a data-ct-non-breakable="null" href="https://www.chainalysis.com/blog/eastern-asia-crypto-adoption-2024/#:~:text=Eastern%20Asia%20is%20the%20sixth,during%20the%20same%20time%20period." rel="noopener noreferrer nofollow" target="null" text="null" title="null">report</a> by Chainalysis.
The growing adoption of crypto and stablecoins is partly driven by countries with constant fiat currency devaluation and high inflationary rates, according to Maruf Yusupov, the co-founder of Deenar, a digital stablecoin backed by physical gold.
Yusupov wrote in a statement shared with Cointelegraph:
<blockquote>
 "In most emerging markets, stablecoins are gradually replacing fiat because of lower barriers to entry, low cost, and ease of use. If the current adoption trend is sustained, the asset might fuel lower patronage to traditional banks as we have it today.”
</blockquote>
<figure><img alt="Stablecoins and crypto are threatening fiat money dominance in Eastern Asia" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921e91-86d4-7827-861b-d0da72d5e4a5">
 <figcaption style="text-align: center;">
 Cryptocurrency value received in Eastern Asia. Source: Chainalysis
 </figcaption>
</figure>
Stablecoins are emerging as a cheaper and faster alternative to traditional bank transfers, especially for cross-border transactions, which can be expensive for emerging economies. On average, remittance fees cost an average of 7.34% of the transfers during 2024, if they involved a bank account transfer, according to <a data-ct-non-breakable="null" href="https://www.statista.com/statistics/962701/costs-of-remittances-by-payment-type/#:~:text=Remitting%20towards%20any%20country%20in,involved%20a%20bank%20account%20transfer." rel="noopener noreferrer nofollow" target="null" text="null" title="null">Statista</a>.
Eastern Asia received over $400 billion in onchain value between June 2024 and July 2023.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tether-transparency-business-structure-118b-ftx-concern" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Investors claim Tether’s $118B reserves may face audit and liquidity risks</a>
<h2 id="eastern-asian-crypto-activity-is-driven-by-institutional-and-professional-investors">Eastern Asian crypto activity is driven by institutional and professional investors</h2>
Most of the cryptocurrency activity in the East Asian region is likely led by institutional and professional investors.
Most of the increased activity was driven by institutions, based on the large average digital asset transfer size, according to the Chainalysis report, that wrote:
<blockquote>
 “Notably, Eastern Asia accounts for the largest share of professional-sized transfers compared to any other region studied in this report.”
</blockquote>
<figure><img alt="Stablecoins and crypto are threatening fiat money dominance in Eastern Asia" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921e92-28c0-7b1c-ae1a-3f4afbe5cacd">
 <figcaption style="text-align: center;">
 Regional transaction value by transfer size. Source: Chainalysis
 </figcaption>
</figure>
However, institutional investors mainly used <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/what-are-decentralized-exchanges-and-how-do-dexs-work" rel="noopener noreferrer nofollow" target="null" text="null" title="null">decentralized exchanges (DEXs)</a> and other <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/defi-a-comprehensive-guide-to-decentralized-finance" rel="noopener noreferrer nofollow" target="null" text="null" title="null">decentralized finance (DeFi)</a> services, while professional investors continued opting for <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/centralized-vs-decentralized-crypto-exchanges" rel="noopener noreferrer nofollow" target="null" text="null" title="null">centralized exchanges (CEXs)</a>.
<figure><img alt="Stablecoins and crypto are threatening fiat money dominance in Eastern Asia" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921e92-6c2f-7013-b7ce-9d3142f684ca">
 <figcaption style="text-align: center;">
 Transfer volume by transfer size and type of service. Source: Chainalysis
 </figcaption>
</figure>
The report attributes this to DEXs typically offering “more arbitrage opportunities than CEXs,” due to their diverse asset coverage.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-contrarian-bet-2025-bitwise-exec" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Ethereum is a 'contrarian bet' into 2025, says Bitwise exec&nbsp;</a>
<h2 id="hong-kong-s-crypto-hub-ambitions-are-becoming-a-reality">Hong Kong’s crypto hub ambitions are becoming a reality</h2>
Hong Kong’s efforts to become a global cryptocurrency hub are starting to pan out based on the increased digital asset activity in the region.
In terms of cryptocurrency adoption, Hong Kong experienced over 85.6% growth, making it the largest year-over-year growth among Eastern Asian countries, followed by South Korea.
<figure><img alt="Stablecoins and crypto are threatening fiat money dominance in Eastern Asia" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921e92-cb72-709c-a5c0-0f83e3697798">
 <figcaption style="text-align: center;">
 Crypto adoption, the highest growing countries. Source: Chainalysis
 </figcaption>
</figure>
Stablecoins have been an important part of this significant increase, accounting for over 40% of the total value received in Hong Kong.
However, the growing stablecoin usage will invite more regulatory oversight, added Yusupov:
<blockquote>
 “Central Banks will do what they can to limit the impact of stablecoins on fiat dominance. Also, new scam models might arise due to the growth in stablecoin usage globally. While innovators are fixated on the revolutionary tendencies of stablecoins, preparation for headwinds must go hand in hand."
</blockquote>
The growing activity could be attributed to regulatory developments. In July 2024, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/hong-kong-unveils-new-stablecoin-licensing-regime" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Hong Kong’s regulators</a> unveiled the first proposal for a new stablecoin licensing regime for fiat-backed stablecoin issuers.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/china-tether-laundering-bhutan-bitcoin-holdings-increase-asia-express/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Chinese Tether laundromat, Bhutan enjoys recent Bitcoin boost: Asia Express</a>

Stablecoins and crypto are threatening fiat money dominance in Eastern Asia

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Cointelegraph

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