Big movements for crypto expected in Asia in 2025: Asia Express

China's digital yuan is back in the spotlight

China's central bank's digital currency was once one of the industry's hottest topics, but 2024 turned out to be a relatively quiet year for the digital yuan.

Still, Winston Ma, an adjunct law professor at New York University and former managing director of China's sovereign wealth fund, predicts a big push for the digital yuan's overseas expansion in 2025.

China in 2010 By 2024, she had extended the digital yuan to Hong Kong's retail sector, but her efforts were smaller and slower than in previous years. This slowdown coincided with the investigation of Yao Qian, the first director of the China Digital Currency Institute.

Yao, who is credited with leading the early development of the digital yuan, was cited for “violations of discipline and law” in April 2024. In November, he was removed from office for allegedly accepting cryptocurrency bribes. While Yao was unable to lead the project at the time of his ouster, the scandal raised concerns about the integrity of the digital yuan.

Despite these obstacles, China remains committed to its digital finance ambitions. At its third plenary meeting, with President Xi Jinping in attendance, the Chinese Communist Party's Central Committee announced plans to focus on internationalizing the currency, including promoting the digital yuan.

Then in November, Shanghai, China's financial center and most populous city, announced plans to boost digital finance, including improving the acceptance of the digital yuan.

Ma said the expansion of the digital yuan could face opposition from the US.

“[This] This could be a year where China's CBCC overseas expansion efforts, especially with the BRICS countries, will encounter challenges. [Donald Trump]As he recently tweeted about defending the hegemony of the US dollar,” says Ma.

China Tests Retail Cross-Border Yuan Payments with Singapore It is part of the mBridge project, a massive cross-border trial with the central banks of Thailand, the United Arab Emirates, Hong Kong and Saudi Arabia.

The Bank for International Settlements, often referred to as the central bank of central banks, The 2024 mBridge project was shelved amid investigations into whether it could be used by BRICS governments to evade international sanctions. According to BIS General Manager Agustin Carstens, the exit was not due to political reasons but due to the maturity of the project.

It is too early to expect a South Korean institutional wave.

South Korea It has established itself as a key cryptocurrency market in 2024, with its winnings leading the world in fiat trading pairs.

But the most surprising thing about South Korea's crypto trading volume is that it is primarily driven by retail investors, as corporations are banned from participating in the market.

This is because Korean investors must go through local exchanges that have official partnerships with licensed banks to access fiat-to-crypto services. The investor must open an account with a real name at the bank, which acts as a gateway to the crypto markets, thus linking the user's crypto activity to their legal identity.

Although not prohibited by law, banks are reluctant to issue these accounts to companies due to local anti-money laundering guidelines. Crypto ETFs are further restricted as they are prohibited by the country's Capital Markets Act.

“As only retail investment is allowed, institutional development lags far behind other developed countries. However, the level of interest and adoption among retail investors is extremely high compared to other developed countries,” said Ki Young Joo, CEO of CryptoQuant.

Institutions are waiting on the sidelines to get a piece of the Bitcoin pie, which is estimated to exceed $100,000 for the first time in 2024. The country's top financial regulatory body has launched a crypto committee and one of its first missions is to review licenses. Corporate crypto investors and crypto ETFs.

Towards the end of the year, a local news outlet reported, citing unnamed sources, that the Financial Services Commission will unveil a roadmap for the gradual introduction of institutional crypto accounts by 2025, starting with universities and local governments.

The FSC denied the option was on the table, but dismissed the report, saying the agency had not finalized its decision.

Ki expects South Korea's institutional adoption to happen after the country's crypto tax laws go into effect. This year, South Korean lawmakers agreed to extend the implementation of the 20% crypto tax to 2027, the third two-year delay.

“There seems to be a big gap between the speed of foreign institutional adoption and the speed felt at home. You can expect Korean institutional investors to come in before 2027,” says Kee.

Proceed to the Asian Crypto Heavyweight Championship

Although they are vying to become a financial hub, Singapore's regulatory framework focuses more on consumer protection and market stability than on retail crypto speculation. Think crypto with parental guidance.

In fact, crypto service providers are banned from promoting their services in public spaces, even by third parties or influencers.

And although retail participation is not prohibited, regulatory attention is focused on an enabling ecosystem for institutions.

By 2024, Singapore has awarded control nodes to key industry players such as Gemini, OKX and HashKey.

Vince Yang, CEO of Singapore-based blockchain infrastructure firm Zlink, has made significant strides in the field of tokenized assets.

In November, the Monetary Authority of Singapore issued a new framework to promote asset tokens.

“In 2025, we can expect more momentum in areas like RWA and DeFi,” Yang says, adding that retail adoption of blockchain technology is also expected.

“Singapore's government and private sector collaborations are creating an environment for innovation and creating an unprecedented level of growth in institutional and retail adoption of digital technologies.”

Singapore's regional rival, Hong Kong, once took a similar approach by closing off retail trading, but lifted the restrictions in 2023. And in 2024, the city set the stage for further institutional access by hoarding tax breaks for wealthy crypto investors and opening bitcoin and ether ETFs. .

“Hong Kong's bold return as a global digital asset hub will be marked by regulatory transparency and institutional focus this year, with an independent economic or regulatory role at the gateway to mainland China,” said Hong Kong resident Justin D'Anetan. Kong-based market analyst.

D'Anethan added that the licensing system that now allows exchanges to serve the retail sector is a clear sign that Hong Kong is reclaiming its role as a bridge between East and West in crypto innovation by facilitating institutional access to Bitcoin and Ether ETFs.

More licenses are expected to be issued by 2025, signaling the city's desire to attract rivals such as the US, Singapore and Dubai with crypto expertise and companies. In the year By 2025, Hong Kong could dominate Asia's crypto capital, token assets, blockchain finance and deep institutional adoption.

Innovations shaping DeFi, GameFi and more

In the year In 2024, Asia shook the blockchain world with big projects, and in 2025, their continued development is expected to make the technology faster and more widespread, solving the industry's fragmentation issues and taking advantage of the renewed GameFi speed.

“Very enthusiastic communities and users in Asia are willing to jump in and use new technology, to experiment and see what can be done with it. In 2024, we see the Diffie, GameFi and MEME landscape continuing to evolve as a result of Layer-2 developments.” From massively increasing volume and reducing transaction costs to machine learning and artificial intelligence that are already smart. Terence Lamb, co-founder of Taiko Labs, who is contributing to the improvement of contract models.

Decentralized finance has seen significant progress, with Taiko introducing the first Ethereum-based package, issuing a decentralized order of Ethereum validators, and enhancing the network's scalability and compatibility with DeFi applications.

Singapore-based project Web3Auth has developed tools to simplify wallet management for non-users, enhancing accessibility and usability. It has started exploring off-chain abstraction solutions to address the increasingly fragmented blockchain ecosystem.

Meanwhile, India-based Deepin project Huddle01, which improves video call latency and quality through arbitrage-based decentralized nodes, is onboarding more users in a partnership with FanTV, which claims to have just shy of a million users on Sui.

GameFi was once the hub of Accie Infinity, with games like Pixel drawing large communities in the Philippines, while Japan's Oasis continues to onboard major game studios to launch their next titles on the blockchain.

“For the next year, we expect founders and builders in the region to focus more on improving the user experience, such as sub-second faster transaction times, more fundamental breakthroughs in crypto tech to make it easier for more people to use it as needed. It will increase in the market,” says Lam. .

John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed as an editor to crypto media outlet Forkast and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.