Fresh off the Singapore TOKEN2049 event, we review an interview with Diederik Van Wersch, Regional Director of the Association of Southeast Asian Nations (ASEAN) and Hong Kong, at Chainalysis.
At Chainalysis, Diederik is responsible for driving strategic initiatives that help government agencies, cryptocurrency businesses, and financial institutions investigate illicit activity, comply with regulations, mitigate risk, and drive growth while navigating the evolving blockchain economy.
Chainalysis is a blockchain data platform, making it easy to connect the movement of digital assets to real-world services. Organizations can track illicit activity, manage risk exposure, and develop innovative market solutions with Chainalysis’ intelligent customer insights. Their mission is to build trust in blockchains, blending safety and security with an unwavering commitment to growth and innovation
Institutional adoption of cryptocurrencies
Following up on previous interviews with Coinbase and M2, who noted that more users were buying and holding instead of constantly trading assets, we checked with Diederik to see whether he observed similar trends, especially in institutional adoption.
Diederik referred to a report where they investigated adoption trends across the world.
“So previously, what we saw last year was lower-income countries saw higher rates of adoption. Now it’s all across different income brackets from the wealthiest down to the most lower income.”
This coincided with observations from Coinbase and M2 on growing adoption rates.
On institutional adoption, Diederik saw Bitcoin ETF as a major driver, which attracted a whole new class of investors.
Diederik went further to compare crypto prices which were higher than last year, with on-chain data they were collecting.
“… interestingly, if we look at on-chain data, if we look at the transaction volumes, we’re blowing past the all-time highs we saw at the peak of the last bull market.”
He then emphasized the importance of exploring metrics other than the price when exploring adoption rates.
Crypto adoption in Singapore
We then asked Diederik about the exciting developments he had observed in recent reports.
Diederik began by looking at Singapore, the host of the TOKEN2049 event. In Singapore, cryptocurrency payments were up across the board.
“In Singapore, payments are up across the board. Grab, which is kind of like Uber slash Deliveroo, has started to accept payments in crypto. Now, why do I find this interesting? Why does this bode well for an industry?
See, Singapore already has a very sophisticated payment infrastructure for fiat with PayNow and PayLah!. It’s not the kind of thing that, in your day-to-day, you have a lot of friction when it comes to making transactions. But still, people are flocking towards crypto. People are still finding value in cryptocurrency for transactions.”
In Indonesia, Diederik pointed out that adoption had grown 200% in the last year, with 60% of the transactions related to DeFi.
“There are countries that may not be top of mind when it comes to cryptocurrency adoption but, now we see them realizing the true value of this technology. And as they start to enter into it, that can really pull this entire industry out.”
Chainalysis on cryptocurrency adoption vs purchasing power
The Chainalysis adoption report showed that India topped the list for crypto adoption. The list also comprised other wealthy countries, such as South Korea and the United States.
“We also see countries like Cambodia, Vietnam, the Philippines, Indonesia and even Thailand in the top 20 of the Global Adoption Index. We also see countries that have experienced rapid and mild inflation, such as Nigeria coming up as well.”
China had high adoption despite a ban on crypto exchanges in 2021. Globally they noted a significant increase in transactions and investments from lower-income members.
Cryptocurrencies adoption and price analysis
Diederik also noted that making price predictions is tough. However, he expects to see more institutional adoption, especially following the approval of Bitcoin ETFs in the U.S. and Hong Kong.
“The approval of Bitcoin ETFs is arguably one of the main reasons that Bitcoin managed to break past an all-time high in March, which has never happened before. We saw it in the U. S., and similarly in Hong Kong as we continue to see more financial institutions entering the space en masse.”
On regulation, he noted that countries globally were starting to adopt cryptocurrencies.
“Even India, where regulations have not been crypto-friendly in the slightest — where a 1 percent tax has been imposed on every transaction and nine offshore exchanges have been kicked out of the country — yet users remained confident to enter the cryptocurrency sector.”
To summarize the analysis, Diederik pointed out that cryptocurrencies are here to stay, and regulators would be better off accepting this fact and coming up with comprehensive regulations that can protect them and allow the industry to flourish rather than fighting against it. Cryptocurrencies are here to stay, and more financial institutions will be involved.
