Daily Management Review

Asia is getting ready to become new digital Wall Street


08/02/2017


Although one of the most powerful countries in the world continues to exert a great influence both on the financial and technological sectors separately, the leadership in the field of fintech will shift to Asia in the next couple of years.



Erwin Soo
Erwin Soo
Consulting company CB Insights suggests that although North America (mainly the US) still has more venture capital financing transactions for fintech startups than Europe or Asia, the situation will change soon. Thanks to several notable financing rounds, such as $ 1.4 billion investment of SoftBank Group Corp. to Indian payment company Paytm, the lead in the volume of transactions moved to Asia.

Asia hosts headquarters of the world's most expensive financial company-the Chinese p2p-lending platform Lufax and a number of other companies. At the same time, according to CB Insights, a significant part of local start-ups receives financing at an early stage.

More than two-thirds of all venture capital investments in Asia have taken place at the stage of seeding or in the form of attracting a business angel, as well as in the A-round. At that, 52% of these transactions received a similar support in the United States. This means that the region has a powerful pipeline of ideas and start-ups that will attract more money in the coming years, and some of them will become unicorn companies.

Many of them develop projects related to blockchain technologies or crypto-currencies, including digital wallets or distributed registers.

It should also be noted that CB Insights’ data do not take into account huge funds raised during ICOs. According to Autonomous research company, since early 2017, start-ups around the world have attracted $ 1.27 billion through ICOs. It should be noted that tokens during such placements are bought not for ordinary money, but for crypto-currencies, most often bitcoins (Bitcoin) or ethers (ETH / USD). Some part of the investments was made at the expense of funds already circulating in cryptoeconomy, but the growth of the ether and bitcoin relative to the dollar shows that a significant share of the ICR's crypto currency is bought for the usual currency.

The crypto currency boom will be over someday. What will remain is a serious infrastructure firmly embedded in many aspects of the financial industry. Thanks to the measures taken in Singapore to encourage blockchain companies, Asia has become a hub for development of the blockchain business. The leap was also encouraged by loyal approach from the Chinese regulators and founders (at least now) and the existing bitcoin infrastructure. This means that while New York still owns Wall Street and its banks, Asia is creating a new digital Wall Street. The next wave of talents in the field of technology and banking business will go there.

source: bloomberg.com






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