Asia and Africa Are Hubs for Crypto Innovation

Key Takeaways

• Asia’s crypto innovation can provide solutions to Africa’s financial inclusion challenges.
• Africa’s real-world crypto adoption highlights the continent’s potential for impactful use cases.
• Collaboration between Asia and Africa can drive meaningful financial transformation globally.

The rise of crypto has opened new avenues for building a fair and inclusive global financial system. One of the most compelling opportunities today is the potential for collaboration between Asia and Africa. Each region brings unique strengths: Asia as a center for crypto innovation and Africa as a continent where the real-world utility of digital currencies can have a big impact. 

As someone who has engaged deeply in crypto across both continents, I’ve seen how innovation can be leveraged to address systemic challenges. Partnerships between these regions can unlock a new way forward for financial systems that have long been exclusionary. It might shift attention away from some of the more frivolous projects in the space, but then it could make a real difference for billions of people. 

Asia — A Hub for Crypto Innovation and Investment

Asia has long been established as a leader in crypto and blockchain. For years, China was the center of Bitcoin mining operations. Most of the world’s largest exchanges have a history in the region, and places like Japan have been at the forefront of bitcoin regulation for years now.

Cities like Hong Kong and Singapore have emerged as global hubs for crypto innovation, housing some of the biggest projects and companies in the space. These cities are not just launchpads for new projects but critical integration points between a matured banking infrastructure, strong rule of law, capital, and digital assets.

According to a Chainalysis Report published last month, five of the 50 highest adopters of digital assets globally are in Eastern Asia. In order of adoption size, these are South Korea, China, Japan, Hong Kong, and Taiwan. Hong Kong stands out as an important crypto hub in Greater China. It has experienced the largest year-over-year growth in Eastern Asia at 85.6%, with the city now ranking 30th on Chainalysis’ Global Crypto Adoption Index .

Asia is also home to a significant flow of venture capital into blockchain projects. As shown in a recent report by Galaxy , while more than 40% of all deals closed in Q2 2024 involved a company headquartered in the U.S., Singapore and Hong Kong accounted for 8.7% and 2.78%, respectively.

 In terms of the total share of VC capital over the same period, the U.S. pulled in 53% and Singapore 4,6%. As I recently pointed out , Africa’s share of global blockchain venture funding only accounted for 0.6% during the first half of 2024.

One of the key advantages in Asia is its well-established banking infrastructure, which increasingly integrates with crypto. Jurisdictions like Japan, South Korea, and Hong Kong have embraced crypto-friendly regulations, enabling their banking systems to interface with digital currencies. This means that users and institutions can move between traditional banking and crypto with relative ease.

The impact of this infrastructure cannot be overstated. It allows for greater liquidity, better market access, and enhanced trust in the system. For regions like Africa, where financial services are not as accessible, connecting to these systems and adopting similar frameworks could have transformative effects and create true value for the projects involved.

Africa — A Growing Force in Crypto Utility and Stablecoins

In Africa, crypto isn’t just about trading or speculation. It has real-world applications that address systemic problems. From reducing remittance costs and payments to offering a hedge against inflation, crypto provides financial tools that are often unavailable through traditional means.

According to the most recent 2024 Global Crypto Adoption Index by Chainalsysis, Nigeria ranks as the second-biggest crypto adopter in the world. Stablecoin and DeFi adoption rates are reported to be on the rise across Sub-Saharan Africa as a whole. In contrast to such use-case-driven growth, developments in North America and Western Europe around the Bitcoin ETFs have largely triggered growth in institutional-sized transfers and corporate uptake. 

Stablecoins are playing a particularly important role in Africa. By offering digital currencies pegged to more stable fiat currencies like the U.S. dollar, stablecoins provide a reliable way to store and transfer value. This is especially important in regions with high inflation or where national currencies are subject to extreme volatility.

Africa’s role in the global crypto economy is often underestimated. While the continent faces significant economic challenges, it is also a source of innovation and real-world adoption, especially when it comes to financial technology. The relationship between Asia and Africa should not be viewed through the lens of aid, charity, or familiar debt traps. Instead, it is productive of mutually beneficial partnerships, where both regions have much to offer.

Empowering Institutions, Communities, and Individuals

There’s a need to move past the mistaken view of Africa as a passive participant in the global economy. Given the continent’s vast natural resources, with the right infrastructure and investment, African countries can lead in the application of crypto technologies that solve practical problems and thrive in global trade. Asia’s expertise in crypto innovation and large pools of investment capital can be key enablers of that process.

Africa-Asia partnerships can open up new avenues for trade and commerce and provide real value to people in both regions. The tools and systems being developed in Asia have the potential to directly address financial exclusion in Africa, and African markets provide the perfect backdrop against which these technologies can take root and flourish. 

Stablecoins, not memecoins, will bridge these two regions, offering the stability, security, and growth potential both markets need.