Blockchain in Asia: Singapore’s Project Ubin

Fundamentally, blockchain is a digital database. To store transactional records, it employs cryptographically linked networks of peer-to-peer nodes, or blocks. The owner’s digital signature serves as both a validation and fraud prevention mechanism for every transaction in this ledger. It also serves to authenticate the transaction.

In actuality, as new information is received, it is added to a new block. Once the block has been filled with data and is attached to the block before it, the data is chained together in chronological order. Put another way, this technology makes it possible to distribute and record digital information, but not to alter it. It alters the function of banks, governments and businesses by making financial transactions more economical, safe and efficient than present practices.

Blockchain has numerous benefits, including facilitating financial transactions. This would be especially true for countries in Asia, because the region already has an outstanding digital proclivity, with a high internet penetration rate of 88 percent (even up to 93 percent in more mature economies like South Korea and Singapore). The continent is also known for having one of the fastest internet networks around the world. Therefore, a digital-friendly environment, paired with the high availability of high-speed internet is more likely to be open to the development of blockchain and cryptocurrencies.

Asia is currently the third largest cryptocurrency market in our index this year, receiving $932 billion in value from July 2021 to June 2022. However, particular to this region is the fact that it sees most of its crypto activity happen on centralized services – CBDC development .

Not surprisingly, Southeast Asian governments have supported this nascent technology. Countries like China, Japan, South Korea, Indonesia, Vietnam, Thailand and Singapore have started or have already developed their own central cryptocurrency. Singapore, for instance, launched Project Ubin, a five-year project of practical experimentation on blockchain technology with the industry and understanding how it could be applied to payments and settlements. It includes the launch of their own centralized token, to be used for clearing and settlement of payments and securities.

This expansion of De-Fi financial infrastructure has so far resulted in improved liquidity and a boost in overall efficiency in transactions in the country. Although still on a trial phase, the initial success of project Ubin is also an indication that governments are more receptive to digital tokens and will resort to these tools more often. Cryptocurrencies are now an important commodity and they seem to be the way of the future. Therefore, the level of burgeoning CBDC-related activity in Asia is a positive step in the right direction and the region is seemingly placing itself atop the cryptocurrency and blockchain movement.