Asian Countries Vie to Set Up Crypto Valleys

The race to establish cryptocurrency hubs in Asia is gathering pace, with several countries easing regulations and unveiling projects to lure financial technology companies. Japan is ahead of the game for now, but opportunities to catch up are also growing fast.

The Cagayan Special Economic Zone and Freeport in northern Philippines is building the “Crypto Valley of Asia,” a $100 million blockchain hub that aims to mimic Zug in Switzerland, the birthplace of Ethereum that is now home to almost 200 blockchain companies, Nikkei reported.

The Cagayan Economic Zone Authority has secured commitments from at least 25 tech companies to help set up the project, which will include an internet data center, self-sustaining power production infrastructure and a “blockchain academy” training facility. Raul Lambino, the CEZA chief executive, said the project would generate 10,000 local jobs.

“The overwhelming interest from offshore companies in financial technology solutions and crypto currency trading that want to locate at the CSEZ has surpassed all our expectations,” Lambino said in July.

Lito Villanueva, chairman of industry group FintechAlliance, said the influx of digital startups had led to competition among Asian countries to create blockchain and financial technology hubs.

The Philippine Securities and Exchange Commission is set to allow international coin offerings in the country. “With these startups come huge investments in their portfolio. Surely, each country would want to take a piece of the action,” Villanueva said.

South Korea has similar aspirations. Jeju Governor Won Hee-ryong has expressed a desire for the island to become a hub for the blockchain industry, according to reports in the Korea JoongAng Daily.

The South Korean government plans to invest roughly five trillion won ($4.4 billion) next year on eight pilot projects and the development of a platform economy built on big data analytics.

Thailand is also stepping up efforts to entice fintech companies to invest in the country. In July, the country’s Securities and Exchange Commission implemented regulations on digital token offerings, allowing issuers of cryptocurrencies like bitcoin and Ethereum to offer up to 300,000 baht ($9,050) to retail investors.

Japan is ahead of its counterparts in Southeast Asia when it comes to developing the cryptocurrency business.

Market research company Frost & Sullivan predicts the fintech industry is growing by as much as 72.5% from 2015 to 2020 to reach $72 billion.