Crypto-related mania made major headlines in 2021: expect more of the same superlative impact this year, according to one expert.
Last year was a breakthrough year for crypto. Dogecoin and Ethereum prices topped Google search terms globally, while a piece of non-fungible token (NFT) artwork was sold for a record-breaking US$69m to a Singapore buyer.
Notably, Central and South-east Asia emerged as one of the fastest-growing regions for crypto adoption, with transaction activity growing by 706%.
What is up for crypto this year? DigiconAsia.net managed to obtain some predictions. According to Brooks Entwistle, Managing Director (APAC & Middle East and North Africa) Ripple, here are some clues as to how the hype around crypto will likely play out in the next year, how crypto will affect global payments, the progress of crypto regulations in the APAC, and the region’s crypto talent shortage:
- From NFTs to the metaverse, 2021 saw crypto breaking into mainstream consciousness. But as we move past the inflection point, there will be a more focused approach to crypto in 2022, on real-world applications and their tangible business outcomes.
- In 2021, the emergence of multi- central bank digital currencies (CBDC) projects and linkages between national real-time payment systems in the region (such as Singapore’s PayNow with Thailand’s PromptPay) have put the spotlight on ways to address inefficiencies in cross-border payments. Amid growing demand for instant settlements and immediate access to capital, the uptake of On-Demand Liquidity (ODL) services in APAC and the Middle East and North Africa is expected to continue accelerating in 2022.
Remittances will continue to be a key use case, but given the fragmented nature of this landscape, we should expect other applications to come to the fore as well – such as trade flow or treasury management.
- Although there has been great progress in terms of new regulatory frameworks for digital assets, the Asia Pacific region will remain particularly uneven in the immediate future.
“The region is so diverse. Intertwining social, economic, digital and political challenges in each jurisdiction creates unique complexities—which means some markets are going to race ahead while others struggle to come up the curve,” said Entwistle.
However, as more traditional financial institutions join the crypto conversation, this will likely encourage regulators and policymakers to think long-term and lay down some clear rules of the road to allow innovation within crypto to manifest maturely.
- As more start-ups emerge and FIs enter the crypto fray, the talent gap will only grow wider and deeper in 2022. There is a need for more talent to join the industry. “At some point, we will see consolidation and the crypto giants plant their stake in the ground, but not necessarily within the next year. So we are going to be jostling for talent from a small pool of builders and innovators—unless the industry as a whole does more to attract, retain and nurture a new generation of people with the grit to take crypto to the next level,” Entwistle believed.
Here is a recap of other crypto-related trends covered in DigiconAsia.net:
India’s ambition to be a crypto-innovation hub: Is it too far-fetched?
Enjoy the crypto ride, but continual education is a must
In the digital age, the ‘C’ in CSR can also mean ‘Crypto’
The 7 sides of a cryptocurrency future
Your friend made US$50k from crypto overnight? Time to buy a mining rig!
After a two-year ban, is crypto ready to springboard India to unprecedented financial inclusion?
More payment options for NFT speculators in Singapore
Protecting digital assets amidst a regional digital currency race
Central banks are assessing and exploring digital national currencies
DigiconAsia thanks Brooks for his insights