What events have influenced the development of blockchain solutions in Asia over the past year

The cheap electricity received from hydropower plants, low labor costs and local chip production have made China a major player in the Bitcoin market. Today, Chinese miners process more than 70% of transactions in this cryptocurrency. However, blockchain technology, which forms its basis, becomes more important than the digital currency itself. And besides China, other Asian countries are actively involved in developing solutions based on a distributed registry. Below we provide an overview of the most important events that influenced the development of blockchain infrastructure in Asia.

Singapore - Asian Fintech Center

Singapore has become the recognized center of blockchain technology. This island nation has long been popular with bankers who work with customers from Asian countries. At the end of October last year, the Central Bank of Singapore concluded an agreement with the government of the Indian state of Andhra Pradesh. The purpose of the agreement was the joint development of Fintech.







IBM has been working with blockchain startups from Singapore since the end of October last year, namely, KYCK !, which helps financial institutions to register their clients faster. The technology giant also interacts with the logistics company FreshTurf. The company FreshTurf is going to optimize using the blockchain for the delivery of goods in Singapore. This collaboration was made possible by the fact that IBM opened IBM Bluemix Garage, a center for working with blockchain startups, in Singapore.

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Banking blockchain consortium R3 from New York began the development of Asia from Singapore. On November 15, 2016, R3 opened its R3 Asia Lab branch, where specialists will be studying the possibilities of using distributed registry technology. The payment operator Senjō Group, which is engaged in investment in fintech, in November 2016 opened its main office in Singapore.



The Singapore blockchain company, BCS Information Systems, together with OCBC Bank, in mid-November last year, created a solution for local and cross-border payments. This allowed them to conduct the first blockchain transaction in South-East Asia between banks of different countries (Malaysia and Singapore). Also in Singapore, technology companies are doing well, which are engaged in the use of the blockchain to account for goods, pay bills, transactions with financial assets, authentication, corporate finance and international payments.

Japan applies blockchain in banking and insurance

At the end of August 2016, the consortium SBI Ripple Asia, which consists of 15 banks planning to use Ripple technology to simplify interbank payments, began work in Japan. This is expected to reduce costs not only for banks, but also for their clients. The figures have already been named: it will be possible to reduce by 10 times the commission for international payments. With Ripple, bank payments can be made in real time, without any delay, as well as on any day, without weekends and holidays. It is expected that the first real payments using the new technology will begin in spring 2017, and the number of Japanese banks entering the consortium will rise to 30. Rakuten, Japan’s largest online trading platform, opened a laboratory to study the blockchain in Irish Dublin at the end of August 2016. The largest bank in Japan, Tokyo-Mitsubishi UFJ, since mid-September 2016, has been working on the introduction of the blockchain together with IBM, based on the Hyperledger project. Japan Insurance Group Sompo Japan Nipponkoa Holdings Inc. At the end of September 2016, she began using the blockchain to create more flexible insurance contracts that quickly respond to natural and climatic disasters. Such contracts are made possible through the use of smart contracts.







In early December 2016, banks such as Mizuho Financial Group Inc. and Sumitomo Mitsui Banking Corporation have chosen to join the blockchain research, which is conducted by the banking group Deloitte Japan. Another Japanese blockchain consortium, the Blockchain Collaborative Consortium (BCCC), according to mid-December 2016, included more than a hundred participants, including world-famous companies: Japan Microsoft, Mitsui Sumotomo Insurance, PwC, Bitbank, ConsenSys and many others.



And even the head of the Central Bank of Japan recognized the potential of the blockchain and fintech. In his opinion, these technologies will be especially useful for residents of developing countries, as they will help them enter into economic activity.

Research on blockchain opportunities in Indonesia and Malaysia

The study of the blockchain begins in Indonesia. The “First Swallow” in this country was launched by the British company Provenance , which in mid-July 2016 created a blockchain-based system for tracking the supply chain for tuna catches from Indonesia. This area has enormous potential, since the sea provides 200 million people living in this region with food every day, and 90% of seafood and fish sold in the United States come from the Asia-Pacific region.







Malaysia is known for Neuroware blockchain-start-up, whose specialization is distributed registry technology for business. These are distributed storage of important data, decentralized identification and authentication, and cryptographic key management. And local banks - Maybank, CIMB, RHB and Ambank actively participate in various fintech events that often take place in neighboring Singapore.

First blockchain solutions in Vietnam, Thailand and Hong Kong

Amilabs from Thailand are also involved in blockchain-based software. Their software is designed to translate into digital ownership of various assets, including physically existing gold. One of the main banks of the Kingdom of Thailand, Kasikornbank , has been cooperating with IBM since the beginning of November 2016, implementing the blockchain . Back in Thailand, startups that specialize in international money transfers via blockchain are successfully operating.







In the Socialist Republic of Vietnam, Bitcoin is banned by the Central Bank. However, from mid-January 2017, thanks to the OKLink platform, it is now possible to make payments via blockchain in Vietnam. A transaction of up to $ 10,000 is transferred to a Vietnamese bank account of one of 27 banks, a mobile wallet or a bank card with a commission of only 0.5%. This service is especially important for Vietnamese citizens working abroad, and there are a lot of them.







An important event for the industry happened in Hong Kong on February 21, 2016. During the round table, the participants agreed and concluded an agreement to support the update of the Bitcoin protocol SegWit . Signatures of representatives AntPool, F2Pool, Bitfinex, BitFury, Bitmain, BTCC, Huobi, OKCoin, as well as the developers of the Bitcoin core appeared under the document.



The Central Bank of Hong Kong in November 2016 in its statement recognized the potential of the blockchain. Also, the Central Bank of Hong Kong, together with the University of Applied Science and Technology of Hong Kong, began a study on the use of distributed registry technology for managing real estate property rights at the end of November 2016.

Indian banks are beginning to actively use blockchain

Commercial banks in India pay attention to the blockchain technology. Since the beginning of December 2016, ICICI Bank has been using a blockchain solution built on the basis of Stellar, which allows for transactions in closed groups. And such Indian banks as Axis Bank and Yes Bank from the beginning of January 2017 are going to offer customers solutions based on Ripple. Perhaps the growth in the adoption of the blockchain will help the adoption of Bitcoin in India, which is still practically banned there.







In mid-January 2017, the Central Bank of India began testing the blockchain technology. The scope of its application will be trade transactions. In research, the Central Bank of India is assisted by commercial banks in the country, a MonetaGo startup from New York, regulators and other financial institutions. According to the research, the Central Bank of India came to the conclusion that automating the processing of trade transactions will help save considerable sums.

China switches to blockchain and develops national digital currency

In late September 2016, IBM decided to transfer to the blockchain operations of the local UnionPay payment system. And this is not the only IBM blockchain initiative in China. In October 2016, a giant network of American supermarkets Walmart began using blockchain to track pork supply chains from China. It became a joint project of Walmart, Tsinghua University in Beijing and IBM.







Chinese bank PSBC, serving half a billion customers, began developing a Hyperledger blockchain-based solution together with IBM in early January 2017. Participants in this initiative say that eliminating the need for multiple customer checks reduces transaction time by as much as 80%, that is, five times. Using the blockchain solves the problem of trust in the system of many participants.



The most ambitious blockchain project appeared in early January 2017 at the People’s Bank of China. It consists in transferring the national currency to a digital basis. The official representative of the People’s Bank of China cited 6 reasons why the country’s centralized digital currency is simply necessary. The new digital currency based on the blockchain will be provided with the national currency and it is designed to gradually oust banknotes and coins. Chinese digital yuan is designed for ease of use through a computer or mobile phone. At the same time, digital money can be just as easily credited to an account at the National or any commercial bank of China for making payments, transactions, and receiving interest on deposits. In the demo mode, the digital yuan system will work in the spring of 2017.

Further prospects of the Asian blockchain

The development of blockchain solutions in Asia is influenced by trends in the entire fintech industry. China is undoubtedly in the lead, both in the number of transactions in digital currency and in the volume of venture capital investments in fintech. In the first 9 months of 2016, fintech companies from the United States raised $ 5.7 billion, while Chinese fintech companies received financing in the amount of $ 9.4 billion. Interestingly, Chinese FINTECH companies are already valued three times as expensive as American FINTECH companies: Chinese startups cost a total of $ 96.4 billion, while American FINTECH companies collectively cost $ 31 billion. The growth of the middle class in the country and the huge number of Internet users make China a very promising market for any online services. If China in 2015 accounted for 40% of global e-commerce, then in the United States only 20%. Thus, it can be assumed that China is gradually becoming an Asian trend setter in the sphere of fintech, and in particular, the blockchain technology.



Investments in Asian fintech increased to $ 10.5 billion in the first 9 months of 2016, more than doubled compared with 2015, when $ 4.3 billion was invested in fintech in Asian countries. At the same time, China accounts for more than 90% of these investments. It is expected that the number of new Fintech companies will grow. There is also growing interest from venture capitalists, among whom are Asian banks and Internet companies. In addition to China, Hong Kong and Singapore also deserve the role of Asian centers that stimulate the introduction of blockchain technology.