Cryptocurrencies have been gaining traction in the mainstream for some time, fueled by a mix of controversy, investor interest, and, well, ramblings by influential figures.

Cryptocurrencies are digital or virtual currencies that are protected by cryptography, which is a class of security techniques that encrypts data so that only the sender and receiver can see it.

While not impossible, "hacking" or tampering with cryptography-secured data can be extremely difficult. As a result, cryptocurrencies are nearly hard to forge or double-spend, and are thus regarded as safe.

The nature of the technology that powers cryptocurrencies — blockchain — is primarily responsible for this security feature.

A blockchain is a decentralized database system that keeps data records in a cryptographic format in a highly secure manner. Blockchain data (transactions) made by users are not stored in a single location, unlike traditional databases (like a data server).

They are instead stored across a network on the workstations or systems of the people who create the data. Because the creators store their own data, the system is referred to be "decentralized."

Normal data held on data servers is vulnerable to being read and/or modified by the data server owner, or even lost due to accidents; additionally, keeping track of these events can be challenging.

However, with blockchain, every transaction created and recorded is permanent and secured with a cryptographic ‘lock’, and the transaction is broadcasted to everyone who owns copies of the blockchain. It is immensely difficult to hack into it to change transaction details, hence why blockchain is transparent and trustworthy.

The Popularity of Cryptocurrencies in Asia and Asians are Obsessed with Crypto

Because of their privacy and security features, as well as their high valuations, popular cryptocurrencies such as Bitcoin (BTC) are extremely profitable.

Cryptocurrencies are also frequently decentralized, which means that their transactions cannot be traced or linked to specific individuals, giving their owners privacy.

Importantly, this means that cryptos are virtually impervious to government influence or manipulation.

As a result, they're likely to compete with centralized currencies like fiats produced by central banks.

Cryptocurrencies are so popular in Asia that Mastercard recently teamed up with three of the region's biggest cryptocurrency service providers to offer their own crypto-funded Mastercard payment cards.

Additionally, Asians adore digital payments, which may have been aided by the global Covid-19 pandemic's lockdowns.

According to Rama Sridhar, executive vice president, digital & emerging partnerships and new payment flows at Mastercard Asia Pacific, Asia Pacific has a higher adoption rate of digital (particularly emerging) payments than the rest of the world.

QR code payments, e-wallets, buy-now-pay-later (BNPL), CBDCs (central bank digital currencies), cryptocurrencies, and biometrics are just a few of the new payment options.

Asia also has a large number of cross-border consumers, whether through internet shopping or actual travel. As a result, consumers in this region, as opposed to the West, have a higher expectation of more seamless, global, and interoperable payment frameworks.

Furthermore, traditional investment choices such as accessing shares and stocks are sometimes financially out of reach for many people due to the high initial charges.

And the thing with cryptocurrencies is that they're virtual/digital, borderless, don't require a large initial financial investment, and - most significantly — aren't stymied by bank red tape. You only need a digital wallet to store your cryptocurrencies and a crypto exchange in your region to get started.

Transacting digitally with a bank account, on the other hand, can be a pain because one must first open the account, which takes time, as well as deal with app limitations and service outages, among other complications of banking services.

All of this, understandably, makes it appealing to Asian crypto owners to transact, possess, and/or hold financial assets.

So, what's the bottom line?

If you want to do business in Asia, you need think about taking not just digital payments, but also cryptocurrency – and sooner rather than later.

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