Here’s how crypto regulation may significantly stimulate Asian FinTech market

By Puja Sharma

The experts of Tempo France believe that the framework for crypto regulation, recently approved in the EU, can give serious positive momentum to the digital payment market of Asia. In April, the European Parliament approved the world’s first comprehensive package of rules aimed at regulating the crypto-currency industry and assets.

Amongst other points, the platforms will be obliged to inform consumers about the risks. Sales of new tokens will also come under regulation. The European Securities and Markets Authority (ESMA), now has powers to step in and ban or restrict crypto platforms if they are seen to not properly protect investors, or threaten financial stability or market integrity.

The experts believe that the new regulation will positively affect not only the EU digital market but will create a stimulus for crypto and digital assets globally and in Asia especially.

“EURO is the number two global settlement currency and the newly adopted law is going to significantly make for an increase in the circulation of already existing EURO-pegged stablecoins and stimulate the introduction of new ones,” said Alla Zhedik, CEO of Tempo France.

Moreover, the new rules are going to give great momentum to the global digital assets popularity, since the law has brought more protection to asset holders, downsizing “the grey zone”, providing better KYW (Know Your Wallet) and KIT (Know Your Transaction). More and more companies will trust digital assets. The most benefiting companies will be fintech and merchants. With the industry growing, the consumers will be taking advantage of faster transactions, higher transparency and lower costs.

The number of projects bridging traditional and digital finance will be soaring in Asia, and the demand for crypto assets and Euro-pegged stablecoins in particular will be growing too. This might also stimulate new CBDCs (Central Bank Digital Currencies).

“Trust in digital assets and blockchain technologies is a key aspect and the new regulation will boost it,” she said.

The Asian digital payment market is an integral part of the global one. With the volume exceeding $5 trillion per annum, its digital commerce exceeds $1.7 trillion. The Asian countries have very intensive economic ties with the EU. The trade volume exceeded $280bln, with EURO as a main trading currency.

According to Tempo, the European market will feel positive effects in around 6 months, but the Asian FinTech market and eCommerce will see changes in 8 to 10 months. Tempo experts believe that the demand for the services of local FinTech companies will soar by 12 to 15% in 2024. The experts think that Asian financial institutions will be more intensively using technological systems based on blockchain. The import of these technologies, including white label projects, might significantly grow in volume.

“The trust in digital assets and services will be growing and so will the interest in them.” It is expected that next year the volumes of imports of blockchain IT products to Asian countries will grow by up to 17 percent, with EU and US-based companies as the main suppliers.

The growth in the industry will be supported by new developments in remittances technologies too. The local remittances operators will also be in the trend of upgrading their IT platforms, looking at projects bridging traditional and digital finance, to make services faster and cheaper.”

Thus, Tempo expects that in 2024, the market to see significant growth of up to 15% in the volume of the Asian FinTech industry. Next year, the demand for digital assets, including EURO-pegged stablecoins, may see 15 to 20% growth.

“Traditionally, Asian countries – particularly the Philippines and China – welcome innovations. We would not exclude a boom,” Zhedik said. The France-based company, jointly with its partner Cypriot FinTech company Armenotech, recently completed a large-scale project in the Philippines and is planning a further expansion in the region. Tempo said that the firm, together with the partner, is planning to take advantage of the situation by increasing the supply of technological business solutions to the growing Asian market.