Use, trading, and legal framework for cryptocurrencies are on a sharp rise in Asia, indicating that much wider adoption of digital assets may be right around the corner.
In Japan, Recruit Lifestyle is partnering with Coincheck in order to bring digital currency to much wider merchant use. Through the streamlined AirRegi point of sale system, merchants can easily accept Bitcoin payments. This integration will bring 260,000+ new merchants on board to accept Bitcoin. In keeping with this trend, trading volume has risen across Asia for all cryptocurrencies. Over the last 24 hours, the top two exchanges have been Korea’s BitHumb and China’s OkCoin.cn, representing over $700 million in trading volume between the two of them.
Asian governments warming up to digital currencies
A key first step with the growth of cryptocurrencies in the region is an increasingly friendly stance from government. Japan has led the way in this regard, both recognizing Bitcoin as a legal form of payment and eliminating consumption tax on Bitcoin sales. South Korea is also making strides in this direction, with pending legislation to legalize and regulate cryptocurrencies. In Thailand, the Deputy Prime Minister recently ordered the Bank of Thailand to ease its restrictions which may be hindering the development of fintech, and to study digital currencies.
Mass adoption could be rough on blockchain networks
While the prospect of wide use is good for the spread of digital currencies, it does come with its challenges, namely scaling. Because of cryptocurrency’s distributed, decentralized nature, coupled by the amount of data made necessary by a permanent public ledger, scaling transaction capacity to support the level of activity seen on major card processor networks can be tricky. Currently Bitcoin can only handle 7 transactions per second, and while Dash is significantly higher at around 28 per second (and improved by the fact that InstantSend can make any transaction confirm instantly), those levels are still small relative to the potential consumer market. To address this, Dash has unveiled a long-term scaling roadmap that will allow the coin to scale to 400mb blocks and support thousands of transactions per second.
Businesses that accepted Bitcoin during the 2014-2016 years may have gotten burned when the network ground to a halt and fees rose exponentially. With cryptocurrency on the rise, but without a clear winner in terms of preferred coin for regular transactions, many merchants accept several different cryptocurrencies instead. When mass levels of use are achieved, this allows customers to simply use coins on less-congested networks, and diffuses the user load across several coins. Additionally, a multi-currency platform allows the cheapest, fastest, and easiest to use to rise to the top, as well as the network which can handle the most users to gain a clear competitive advantage.