In recent years, cryptocurrencies have evolved into a niche asset class, piquing the interest of stakeholders, including regulators, traditional asset managers, and both institutional and retail investors. With the cryptocurrency market rallying in 2024 and the cryptoeconomy expanding, we spoke with Kunal Chowdhry, CEO of Apollo Singapore Investments Pte Ltd, to discuss the current state of affairs and emerging trends in the market.
Prachi Rajgarhia: Talk to us about the latest developments in the global crypto market and how are other markets reacting to it?
Kunal Chowdhry: The global crypto market has experienced a groundbreaking shift, with Bitcoin soaring to an unprecedented high of over $100,000 earlier this month. This surge is largely credited to President-elect Donald Trump’s unexpectedly pro-crypto stance, which has ignited optimism across the cryptocurrency landscape. Trump’s campaign not only accepted donations in cryptocurrency but also emphasized his vision of making the United States “the crypto capital of the planet.” Further cementing this sentiment, he attended industry events where he pledged to support decentralized finance and foster innovation in the sector.
Adding to the momentum was the unveiling of Trump’s latest entrepreneurial initiative, World Liberty Financial, a decentralized finance (DeFi) money market platform. This venture includes a proprietary cryptocurrency called $WLFI. While specific details remain sparse, the initiative has been embraced by pro-crypto advocates as a strong indicator of the incoming administration’s commitment to digital currencies.
Meanwhile, traditional financial markets have reacted with caution. The Federal Reserve, mindful of inflationary pressures and the uncertainty surrounding Trump’s economic policies, has softened its monetary policy outlook. This approach has introduced heightened volatility in stock markets as investors navigate the implications of a crypto-friendly administration.
The diverging reactions highlight a critical development: cryptocurrencies, once seen as a fringe asset, are now central to broader financial discussions. They are reshaping investor sentiment, influencing policy decisions, and playing an increasingly significant role in global economic stability.
Prachi Rajgarhia: What are some of the headwinds and tailwinds that can impact and propel the adoption of crypto in the Asian market?
Kunal Chowdhry: One of the most significant tailwinds is institutional support in leading financial hubs like Singapore, Hong Kong, and Japan, which are fostering regulatory frameworks that encourage innovation in digital assets through government-led initiatives. Singapore, for instance, has been at the forefront of creating a supportive regulatory environment for digital assets, implementing guidelines and experimental projects to promote the responsible development of tokenized assets. Similarly, Malaysia, Indonesia, and Thailand are making considerable strides in advancing their regulatory frameworks to ensure both innovation and security in the growth of digital assets.
Another major driver is the growing exploration of central bank digital currencies (CBDCs) in countries like India and China, which could boost trust and familiarity with digital assets. Globally, 93% of central banks are actively exploring CBDCs, according to the Bank for International Settlements (BIS). In Asia, China is expected to accelerate the adoption of the digital yuan, integrating it further into domestic and international trade networks. Emerging economies like Sri Lanka are exploring CBDCs to enhance financial inclusion and streamline monetary policies, while nations such as Singapore are likely to refine their pilot programs to solidify their leadership in digital finance.
Despite these promising developments, headwinds persist. Price volatility in cryptocurrencies poses significant risks for retail investors and businesses, creating hesitancy in adopting them for savings or transactions. For example, Bitcoin, which had surged past $100,000, sharply dropped to approximately $92,000 just before Christmas, triggered by a hawkish stance from the Federal Reserve. This stark fluctuation underscores that volatility is—and will likely remain—a defining characteristic of cryptocurrencies as they mature as an asset class.
Adding to these challenges, the International Organization of Securities Commissions (IOSCO) has pointed out issues such as inadequate investor understanding, regulatory gaps, and the increasing prevalence of scams and fraud.
Prachi Rajgarhia: While the case studies for crypto usage for cross border transactions are widespread, can it also create a case for financial inclusion in emerging markets?
Kunal Chowdhry: Cryptocurrencies have the potential to significantly reduce barriers to financial services, particularly in regions with limited infrastructure. By eliminating the need for physical banking infrastructure, cryptocurrencies allow individuals in remote or underserved areas to access financial services via a smartphone and internet connection. In emerging economies, where a large portion of the population remains unbanked, this is a transformative opportunity. According to the World Bank’s Global Findex Database 2021, approximately 1.4 billion people globally remained unbanked, and cryptocurrencies offer an alternative to traditional banking, enabling participation in the digital economy.
Crypto wallets can serve as functional alternatives to bank accounts in regions with large unbanked populations, offering services such as savings, lending, and insurance through decentralized finance (DeFi) platforms. As the cryptoeconomy evolves, an ecosystem of DeFi protocols and fintech firms is creating infrastructure that rivals traditional financial systems. Furthermore, blockchain technology’s transparent and immutable records enhance trust in financial systems, which is critical in areas where corruption undermines confidence in traditional institutions. This trust-building capability underscores the transformative potential of blockchain and crypto for financial inclusion.
Prachi Rajgarhia: With each Asian market addressing the challenges surrounding cryptocurrency’s ownership, regulatory norms and taxation uniquely, what are some of the common themes emerging?
Kunal Chowdhry: Consumer protection stands out as a recurring theme across Asian markets. Many countries are introducing measures to protect retail investors from fraud, scams, and excessive risk exposure. For instance, Singapore has implemented new consumer protection rules for digital asset firms, requiring compliance in two phases by October 2024 and June 2025. These rules aim to deter uninformed retail participation while ensuring that investors make decisions with full awareness of the risks involved. Similarly, Japan mandates that cryptocurrency exchanges register with its Financial Services Agency (FSA) and adhere to strict security protocols to safeguard user funds and data.
A sound regulatory framework prioritizes retail investor protection through clear rules and education about cryptocurrency risks. This includes Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, which reflect a collective effort to harness the potential of cryptocurrencies while mitigating associated risks.
Prachi Rajgarhia: With 2025 just round the corner, how can stakeholders help create an environment of trust and sustainable growth for the entire landscape?
Kunal Chowdhry: Regulators face the challenge of balancing retail investor protection with the need to foster innovation in the crypto space. Flexibility for experimentation is crucial, with initiatives such as regulatory sandboxes paving the way for blockchain innovation. In Singapore, these sandbox programs provide controlled environments where startups and companies can test cutting-edge technologies while adhering to regulatory requirements.
Encouraging institutional entry is another key step. Clearer rules on custody, tokenized assets, and investment funds can enhance institutional participation, bringing liquidity and stability to the market. While the approval of Bitcoin exchange-traded funds (ETFs) is seen as a growth catalyst, the true benefit lies in the regulatory clarity it provides, which can influence taxation and compliance frameworks.
Lastly, combating misinformation and improving financial literacy will be instrumental. Financial literacy, in particular, is crucial for reducing market volatility, as it helps investors make informed decisions and mitigates panic during downturns. Ultimately, the success of Asia’s crypto industry will depend on how effectively it balances fostering innovation with safeguarding investors, creating a robust and inclusive ecosystem for the future.
