japan | Cryptobeyer

Asia is also undergoing the financial revolution. Countries like Singapore, China, Hong Kong, Japan, and South Korea are experiencing a huge interest in cryptocurrencies. What's really happening in Asia?

The Asia-Pacific region is growing rapidly in the crypto economy. Nations like India, Vietnam, the Philippines, Indonesia, Pakistan, and Thailand are highly interested in cryptocurrency. Chainalysis' 2023 Global Crypto Adoption Index ranks these countries among the world's top ten for crypto adoption. In fact, data from Chainalysis also shows that Central & Southern Asia and Oceania (CSAO) are key regions for crypto adoption, with India leading in transaction volume compared to the USA.

The region's influence on the global crypto market remains unmistakable, with forecasts projecting a monumental market volume of €10.15 billion by 2028.

In particular, the banking cryptocurrency XRP has captured the interest of Japanese investors, and has become the second most popular cryptocurrency in the country.

Hong Kong emerges as a standout crypto hub, attracting substantial activity, especially in the over-the-counter (OTC) market. OTC trading refers to the direct buying and selling of digital assets between parties, bypassing traditional exchanges. I suspect people are choosing OTC markets to access unique digital assets.

In 2020, China led global Bitcoin mining and had a thriving crypto market. But in 2021, the government cracked down, declaring most crypto activities illegal. Now I hear rumors that China may be softening its stance on crypto, and Hong Kong could play a role in testing new policies.

What’s more?

I am sure you have heard of the Bitcoin spot ETFs in the USA and I hope you have enjoyed the ride upward in price since their inception. Now I hear that 22 new Bitcoin Spot ETFs are coming to Hong Kong… This will surely increase liquidity and the accessibility for institutions and retail investors in the region and benefit the price of Bitcoin. Glorious days for Bitcoin.

But I hear something and see something different. “We need clear regulations before Asia is completely taking over…” says the US based crypto community. But I see a bigger picture.

Over 1 billion Asians can't access regular banking, meaning no bank accounts, fewer job options, and less involvement in the economy. This is a big issue in countries like Indonesia, where 66% of people don't have bank accounts.

So, what I'm really seeing here is a hopeful global change unfolding in the fourth industrial revolution. Non-democratic countries are being affected by the notion of increased financial equality, and increased access to banking for people. Blockchain technology has the power to empower individuals with more freedom. Oppressive regimes will continue to fight crypto, but the dispersed global network of blockchain technology and their services are clearly difficult to stop and changing society. That’s why it’s called a revolution.

Global pension funds are approaching alarming levels of deficiency. Underfunding, inequality, and regulatory complexities are forcing pension funds to act swiftly. It’s a crisis in the global pension industry, and Japan is considering investing in Bitcoin.

According to the Organization for Economic Cooperation and Development (OECD), pension assets took a substantial hit in 2022, plunging by 14% to USD 51 trillion, only to rebound modestly by 11% in 2023, reaching USD 55.7 trillion. Countries with the largest pension assets include Japan, Norway, and the United States. The Government Pension Investment Fund of Japan (GPIF), standing as the world's largest pension fund, holds assets totaling a staggering $1.4 trillion. However, these countries are facing a myriad of problems.

The deficit in pension funds globally has reached alarming levels, with a $78 trillion shortfall in the 20 largest OECD countries alone.

Remember, the rise in longevity and aging populations worldwide is putting significant strain on retirement systems and pension funds. As people live longer, pension systems are required to pay benefits for extended periods, leading to a gap between retirement savings and income needs. People are seeing the gap and are growing skeptical about the pension system.

Apparently, the pension industry has looser regulations and oversight compared to the banking and insurance sectors, increasing the risks of unethical behavior and other systemic issues. There is also a trend of outsourcing pension responsibilities to insurance firms, which threatens the stability of pension systems in the long term. Moreover, changes in investment strategies, such as reducing stock investments and increasing bond allocations, have impacted overall performance.

Furthermore, unclear valuation methods and dependence on risky assets raise concerns about the performance and sustainability of pension systems. Put differently, they have put too much money in risky assets!

All in all, global investment funds need additional transparency and better governance practices to increase public trust as their pensions are not certain. Governments and pension funds are employing different approaches to address these challenges.

This is where it gets interesting. Japan is known for having a conservative investment approach, but the Government Pension Investment Fund (GPIF) of Japan is now looking into investing in Bitcoin.

Hang on! Yes, Bitcoin.

Is Japan seeing the strength of Bitcoin? Maybe it's eyeing it as a solution to transparency and governance issues. With Bitcoin's transparent and decentralized system, policymakers could step up oversight and accountability in finance. One thing is certain: the fact that Japan is traditionally conservative and is looking towards the future and potentially seeing Bitcoin says a lot.