This article analyzes the strategies of Western cryptocurrency exchanges expanding into the Asian market, their localization strategies, and the competitive landscape with regional competitors.
Authors: Chi Anh, Ryan Yoon, and Yoon Lee
Translated by: Deep Tide TechFlow
Summary
Western centralized exchanges (CEX) target the Asian market: Companies like Robinhood and Coinbase are expanding into Asia, leveraging regulatory-friendly hubs and localization strategies to tap into the market.
Regional platforms maintain strong positions: Local exchanges continue to hold competitive advantages due to their strong market presence, posing significant challenges for Western exchanges vying for dominance in the Asian market.
The key to success lies in localization: Success hinges on collaboration with financial institutions, compliance with regulatory requirements, and the launch of customized products and services that align with local user behaviors.
1. Exploring East-West Dynamics in the Crypto Market
Asia dominates the global cryptocurrency landscape, with advantages in three areas: 1) leading trading volumes, 2) widespread retail market adoption, and 3) active institutional innovation. The region's vibrant economies and strong retail participation make it a core force in the global crypto ecosystem.
As a result, many Western exchanges that are nearing saturation in their domestic markets are increasingly looking to Asia as the next frontier for expansion. For example, Robinhood plans to establish its headquarters in Singapore, while Coinbase is entering the Southeast Asian market with localized stablecoins, highlighting the strategic importance of Asia.
However, this market is far from empty. Local centralized exchanges (CEX) in various countries already have very high user penetration, and global exchanges like Binance are also very popular. These factors indicate that Western newcomers will face significant competitive pressure.
This report delves into the evolving competitive landscape of the Asian crypto market, exploring the strategic moves of Western and regional players, the challenges they face, and the emerging collaboration opportunities in this rapidly developing ecosystem.
2. How Western Players Enter the Asian Market
2.1 Robinhood's "Compliance First" Strategy
Robinhood's entry into Singapore marks a strategic move in the rapidly growing digital asset market in Asia. The company announced its acquisition of the European digital asset exchange Bitstamp for 200 million USD, thereby gaining regulatory approval and integrating into Singapore's crypto-friendly framework. Bitstamp has received in-principle approval from the Monetary Authority of Singapore (MAS), providing Robinhood with significant regulatory advantages and streamlining its market entry process.
According to Bloomberg, Robinhood plans to launch crypto products in Singapore in 2025 through a newly established entity. Although the acquisition of Bitstamp has not yet been completed, the in-principle approval from the MAS lays a solid foundation for Robinhood's compliance strategy.
By prioritizing regulatory compliance, Robinhood contrasts sharply with offshore platforms operating in legal gray areas. The company aims to attract compliance-focused retail traders and institutional investors by ensuring compliance and providing a secure trading environment.
Robinhood's expansion in Singapore is part of its broader international growth strategy. The company has already launched crypto trading in Europe and initiated stock options trading in the UK. As its licensing scope expands, Robinhood is working to offer comprehensive services that include both digital and traditional finance across multiple regions.
Choosing Singapore as a regional base is no coincidence— the country has a transparent regulatory framework, highly concentrated institutional capital, and a growing crypto user base. These factors make Singapore an ideal launchpad for Robinhood to test and expand its crypto business in Asia.
This strategic foothold reflects a broader trend among Western centralized exchanges (CEX): entering the Asian market through regulatory hubs like Singapore and then gradually expanding into more complex markets. As regulatory clarity continues to improve across the region, Robinhood is expected to extend its service offerings from Singapore to other markets, using it as a springboard for larger-scale growth.
2.2 Coinbase's Stablecoin and Infrastructure Strategy
Coinbase is expanding into the Southeast Asian market with a stablecoin-centric strategy. Thailand and the Philippines are promoting stablecoin projects pegged to local currencies, which aligns closely with Coinbase's strategic direction. Thailand is testing stablecoins through the Phuket Sandbox Initiative, while the Philippine central bank has approved a pilot project for a stablecoin pegged to the Philippine peso, indicating local regulators' openness to these innovations.
Source: X(@TxnSheng)
To promote this trend, SCB 10X recently launched a Ruby Wallet based on Base. This wallet is built on Fireblocks' "wallet-as-a-service" infrastructure and supports Thai baht ($THBX) and USD stablecoins. This initiative supports the development of local infrastructure that aligns with Coinbase's overall goals, particularly in promoting the use of Base and Thai baht stablecoins.
Additionally, Coinbase integrated Transak into its wallet in 2022, allowing users to purchase cryptocurrencies using local currencies and payment systems. This reflects Coinbase's broader market entry strategy: focusing on wallet services and Base rather than directly expanding exchange operations, aligning with government-led digital currency initiatives. This strategy sharply contrasts with Robinhood's direct exchange expansion approach.
Through these strategic partnerships, Coinbase is gradually embedding itself in Asia's evolving digital economy. This approach illustrates Western companies' efforts to build infrastructure rather than compete directly with regionally dominant exchanges.
These two cases showcase different market entry approaches: Robinhood prioritizes regulatory compliance and attracting institutional investors, while Coinbase focuses on financial infrastructure and the practicality of stablecoins. Both strategies have growth potential, but their success will depend on how these companies navigate the complex regulatory and competitive landscape in Asia.
3. Market Dynamics: Regional Powerhouses vs. Western New Entrants
Asia's diverse regulatory environment has led to the dominance of local exchanges in certain regions while providing opportunities for global centralized exchanges (CEX) to develop in others. For Western CEXs looking to expand in Asia, understanding these different market structures is crucial.
(Note: The original image was translated using AI, which may result in some textual inaccuracies.)
3.1 Local Exchanges Dominate the Market
South Korea is a prime example of a market dominated by local exchanges, where a strict regulatory framework has allowed local platforms like Upbit and Bithumb to thrive. These platforms gain an advantage by adhering to stringent compliance measures, including the "travel rule" requirements and financial reporting obligations. These regulations create high entry barriers, making it difficult for Western CEXs to enter the South Korean market without significant licensing and compliance investments.
Japan is also a highly regulated market, where local exchanges like BitFlyer and Coincheck continue to dominate. The Financial Services Agency (FSA) of Japan enforces strict licensing requirements, ensuring that only highly compliant entities can operate. Foreign exchanges like KuCoin and Bybit have received regulatory warnings, further highlighting the obstacles Western companies face when entering the Japanese market.
On the other hand, Binance successfully entered the Thai market through a strategic partnership with Gulf Energy, a major corporate group in Thailand. The two parties established a joint venture to launch a regulated digital asset exchange. This collaboration allowed Binance to obtain approval from the Thai Securities and Exchange Commission (SEC), ensuring compliance while leveraging Gulf Energy's extensive business network in Thailand.
By aligning with influential local companies, Western exchanges can find compliant and scalable pathways to enter restrictive markets. This approach not only reduces regulatory friction but also benefits from existing business network support. Rather than directly competing with local strong players, Western exchanges might achieve greater success by establishing local partnerships, focusing on institutional services, or offering specialized financial products that meet regional demands.
3.2 Global Exchanges Dominate the Market
Countries like Vietnam present a starkly different market landscape. Due to the lack of clear regulations for cryptocurrency exchanges, the development of local trading platforms is limited. Even when local exchanges exist, high tax rates drive investors to seek alternatives from global exchanges.
In this regulatory vacuum, global exchanges like Binance, OKX, and Bybit have significantly expanded their influence. These platforms have successfully met user demands by offering low fee policies and peer-to-peer (P2P) services, particularly in areas where local exchanges struggle to compete.
As a market entry strategy, global exchanges actively adopt grassroots marketing tactics to quickly attract users. These strategies include launching localized Telegram communities, providing referral reward programs, and enhancing local language support. These initiatives effectively improve market penetration by establishing direct communication channels with local users.
However, many platforms often operate in legal gray areas due to the lack of a clear regulatory framework. As global regulations tighten, the necessity to comply with local legal requirements has significantly increased. This shift is prompting global exchanges to make substantial operational adjustments.
Some notable cases further highlight this trend. For example, in January 2024, India's financial enforcement agency requested the blocking of IP addresses for nine foreign exchanges, including Binance, until Binance committed to regulatory compliance. In November 2023, the Philippine Securities and Exchange Commission issued a warning to Binance for unauthorized operations and formally instructed the blocking of Binance's website and app IP addresses in March 2024. These actions clearly indicate the increasing stringency of regulatory oversight.
In response, global exchanges are gradually abandoning their operations in legal gray areas and adjusting their businesses to fit clear legal frameworks. Compliance is no longer optional; it is a key foundation for building sustainable, long-term operations. As the cryptocurrency industry continues to mature, this trend is expected to intensify.
4. Market Penetration Strategies
Billboard of OKX in Vietnam Source: OKX
To succeed in the Asian crypto market, deep localization is essential—not just simple language translation. Exchanges must integrate local currencies, keep up with regional asset trends, and connect with local payment systems.
In Vietnam, P2P services supporting the Vietnamese dong (VND) and strategic outdoor advertising campaigns have helped centralized exchanges (CEX) establish a strong market foothold. Similarly, hosting events that align with local festivals can enhance brand recognition and market visibility.
Understanding user behavior is another key factor. In economies with high remittance demand (like the Philippines), platforms like Coins.ph have attracted a large user base by offering cryptocurrency-based remittance solutions. Coinbase has also adopted a similar strategy by introducing stablecoins pegged to the Thai baht and Philippine peso to improve the convenience of converting between fiat and cryptocurrencies. These tailored financial products address localization needs and drive retail user adoption.
Finally, establishing strategic partnerships with local financial institutions is crucial for building trust and expanding reach. For example, in Thailand, collaboration with banks has facilitated the establishment of fiat deposit channels, lowering the entry barriers for retail investors.
To effectively compete in Asia's complex and rapidly changing crypto market, Western CEXs must prioritize regulatory compliance, ecosystem collaboration, and localized innovation.
5. Future Outlook: Cooperation Over Competition
Rather than attempting to replace the dominant players in the market, Western CEXs may achieve greater success through cooperative strategies. They can choose to partner with local exchanges instead of competing directly—positioning themselves as compliant allies or infrastructure providers, coordinating with regulatory bodies.
Today's Asia presents both a tremendous opportunity and a significant challenge. To succeed in this market, it is essential not only to scale operations but also to have a profound understanding of regional market dynamics, user behavior, and the ever-evolving regulatory framework.
Cryptocurrency regulation is rapidly evolving across countries, especially in Asia, where changes are particularly swift. Western exchanges looking to expand must adopt a "compliance-first, cooperation-driven" strategy. The most important lesson for any CEX planning to enter the Asian market is that this is not a market to conquer, but one to integrate into.
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