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1. Introduction

Tiger Research served as the official research partner for Malaysia Blockchain Week, the country's leading blockchain event hosted by Lydian Labs. The most notable aspect was the active participation of regulatory authorities, who had previously maintained a conservative stance on the crypto industry, engaging in constructive discussions for industry development.

Government involvement signals Malaysia's crypto ecosystem moving toward institutional acceptance. The event connected diverse industry participants and expanded government-private sector communication channels. Tiger Research conducted interviews with officials, experts, and local teams during the event. These conversations provided on-ground insights that strengthen this report's analysis.

2. Malaysia Crypto Market: Three Key Words You Need to Know

Malaysia's crypto market has three key features: Southeast Asia's melting pot, a breeding ground for global champions, and the world's Islamic finance center.

Malaysia is multilingual, with populations fluent in Malay, English, Chinese, and Tamil. This diversity creates natural East-West cultural integration. Malaysia also holds a strategic location. From Kuala Lumpur, major Southeast Asian cities like Ho Chi Minh, Bangkok, and Jakarta are within two hours by air. This accessibility enables collaboration across diverse cultures and accelerates business expansion.

These conditions foster globally-minded talent. Beyond language skills, people naturally develop cross-cultural understanding. Despite Malaysia's small market size, major crypto projects originated here. Etherscan, Jupiter, Virtuals Protocol, and CoinGecko all started in Malaysia and now have global reach.

Malaysia's Islamic finance integration creates unique opportunities. Malaysia runs the world's largest Islamic finance center, making Shariah compliance mandatory for crypto businesses. This requirement generates innovation rather than constraints. Malaysia first recognized cryptocurrency as Shariah-compliant, launched Shariah Bitcoin funds, and enabled crypto zakat payments. These developments connect crypto to the global Islamic finance market, projected to reach $10 trillion by 2030.

3. Malaysia's Crypto Regulation Evolution

Phase 1: Establishing Digital Asset Regulatory Framework (2019-2020)

Malaysia was among the Asian countries that quickly established regulatory frameworks for digital assets. In 2019, the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 classified digital assets into Digital Currency and Digital Token categories. Assets meeting specific criteria became securities under Securities Commission Malaysia (SC) oversight.

The SC revised its Recognized Markets guidelines, requiring Digital Asset Exchanges (DAX) to register as Recognized Market Operators (RMO). Exchanges had to meet strict requirements: minimum paid-up capital of RM5 million (approximately $1.25 million), stringent governance standards, and local incorporation. These measures strengthened exchange stability and investor protection.

Regulated Entity Types:

• DAX (Digital Asset Exchange) Operator: Provides cryptocurrency spot trading services through order book or broker models

• IEO (Initial Exchange Offering) Operator: Manages token issuance and investor recruitment platforms in regulated environments

• Digital Asset Custodians (DAC): Offers cryptocurrency custody and management services for institutional and retail investors

In 2020, Malaysia published detailed operational guidelines that strengthened the regulatory foundation. These guidelines classified IEO and DAC as separate business categories, each requiring RMO registration. This created tailored regulatory standards for each business type based on their specific characteristics.

As of 2025, 12 companies operate as digital asset RMOs: 6 cryptocurrency exchanges, 4 custody service providers, and 2 IEO platforms.

Phase 2: Strengthening Enforcement and Blocking Foreign Exchanges for Investor Protection (2021-2024)

After establishing the regulatory framework, the SC strengthened enforcement through active market control. Rather than stopping at rule-making, the SC actively blocked illegal elements to enhance regulatory ecosystem credibility and safety.

The SC pursued two core objectives: maintain regulatory consistency by blocking unregistered foreign exchanges operating illegally in Malaysia, and prevent investor harm from unauthorized platforms. The SC created an 'Investor Alert List' to warn users in advance. This list included global exchanges like Binance and Bybit. The SC repeatedly emphasized that trading on these platforms receives no protection under Malaysian law.

From 2021, the SC shifted from passive measures to direct, forceful enforcement. In July 2021, the SC ordered Binance to cease services to Malaysian users within 14 days and close all channels including its website. After 2022, as the crypto market faced global crises including FTX's bankruptcy and Terra Luna's collapse, Malaysia intensified its regulatory approach. The SC noted these incidents occurred in unregulated environments and applied similar measures to unauthorized exchanges like Huobi and Bybit.

These measures went beyond formal sanctions. Regulators implemented comprehensive blocking and market exit strategies. The SC collaborated with ISPs to block target exchanges' websites and requested Google Play Store and Apple App Store to remove exchange apps. Simultaneously, the central bank and tax authorities instructed local banks to prohibit deposit and withdrawal services with unauthorized platforms. Authorities also strengthened sanctions against individual investors. Confirmed use of P2P trading or unauthorized exchanges resulted in bank account freezes, financial product restrictions, and early recall of auto and mortgage loans.

Phase 3: Post-Trump Malaysia's Rapid Transformation (2025-Present)

Malaysia's crypto market has evolved rapidly following Trump's election. Prime Minister Anwar Ibrahim initiated cryptocurrency discussions with former Thai Prime Minister Thaksin in January, then held talks with Binance founder Changpeng Zhao (CZ) in April about developing Malaysia as a digital asset hub. These moves demonstrate Malaysia's intent to lead regional digital finance policy as the ASEAN chair. Malaysia's Web3 market has grown rapidly compared to last year, marking a turning point since Trump's election.

The government's political commitment quickly translated into concrete policy changes. Prime Minister Anwar directly launched the "Digital Asset Innovation Hub" in June 2025 as the first major outcome. Bank Negara Malaysia (BNM) leads this regulatory sandbox. The sandbox will serve as a safe testing environment. It will actively encourage digital asset experimentation and innovation. Digital Minister Gobind Singh Deo also announced the establishment of the "Digital Asset and Blockchain Working Committee" at a blockchain industry roundtable hosted by the Malaysian Digital Economy Corporation (MDEC), demonstrating the government's systematic approach.

Technical infrastructure development has accelerated alongside policy foundation building. Science, Technology and Innovation Minister Chang Lih Kang announced the official launch of Malaysia Blockchain Infrastructure (MBI) at Malaysia Blockchain Week 2025's opening ceremony. The government agency Malaysian Institute of Microelectronics Systems (MIMOS) and local mainnet project Zetrix developed this infrastructure through collaboration. The project explores practical blockchain applications from enhancing government transparency to halal certification and improving trade and supply chain efficiency.

The most notable change is the SC's regulatory relaxation. The SC is shifting from its strict approval-based review model toward significant deregulation through a Consultation paper released in June 2025. As of July 2025, only 23 cryptocurrencies that passed the SC's rigorous review can list on local exchanges. Under the new regulatory framework, exchanges can make independent listing decisions without SC pre-approval, provided they meet specified criteria.

However, Malaysian regulators aren't pursuing simple deregulation. Authorities are strengthening operational requirements like increased exchange paid-up capital and introducing self-regulatory models, while maintaining conservative positions on high-risk cryptocurrencies including privacy coins, meme coins, and stablecoins. This approach seeks balance between market autonomy and stability.

These policy changes demonstrate Malaysia's strategic intent to compete with Singapore and Hong Kong as a major Asia-Pacific Web3 hub. Combined with the Trump administration's pro-crypto policies, Malaysia is positioning itself as a key bridge connecting Western capital with Asian markets.

4. Key Sector Analysis of Malaysia's Crypto Market

4.1. Centralized Exchange

Malaysia operates six recognized local crypto exchanges. Luno dominates with over 90% of local trading volume, creating a winner-takes-all structure similar to other Asian countries like Korea and Thailand. However, newcomer Hata, which launched last year, shows rapid growth and appears to inject new energy into the market. Sinegy also ranks as a major player, providing crypto trading services for corporate and institutional investors.

Local exchanges maintain limited actual influence. Despite regulatory efforts to block unauthorized exchanges like Binance, many investors continue actively using global platforms through workarounds. An estimated 40-60% of Malaysia's total spot crypto trading volume occurs on global exchanges like Binance and Bybit.

Additionally, Malaysia's small crypto market size creates challenges for local operators. While Luno holds over 90% local market share, trading volumes remain limited. Luno's daily trading volume shows approximately a 200-fold gap compared to Korea's Upbit. According to BNM's 2024 annual report, cumulative net deposit outflows from banks to local registered DAX represent less than 1% of total banking system deposits as of end-2024 and around 0.4% of the market capitalisation of securities listed on Bursa Malaysia.

Investors prefer global exchanges due to local platforms' structural limitations. The SC's direct involvement in crypto listings requires strict approval processes. This limits tradeable cryptocurrencies to just 23 options. Low liquidity makes large-scale trading difficult. The absence of margin trading or derivatives reduces investor appeal.

Under these constraints, local exchanges pursue survival strategies by operating parallel brokerage businesses. They provide OTC trading and stablecoin on/off-ramp services outside the exchange. This particularly targets wealthy family offices and digital nomads for additional revenue. This business model emerged naturally from restrictions on major stablecoins like USDT and USDC on local exchanges. Insufficient liquidity for large transactions also contributed to this development.

Malaysia's crypto tax policy significantly influences exchange selection. Crypto profits are classified as income tax rather than capital gains tax. The government taxes only withdrawn amounts. For example, someone holds 10 BTC but withdraws only 1 BTC locally. Tax applies only to the withdrawn amount. Airdrops, staking, and DeFi earnings also face income tax. The government monitors crypto activities by sharing trading data from local exchanges. Authorities impose additional investigations and sanctions for non-reporting. This tracking system appears to be a major factor that deters investors from using local exchanges.

4.2. Stablecoin

Malaysian regulators take a conservative stance on stablecoins. Dollar-based stablecoins like USDC and USDT remain unlisted on local exchanges. While BNM hasn't issued explicit statements on this matter, this cautious approach likely stems from policy priorities. The 1998 Asian financial crisis shaped these priorities when rapid capital outflows caused severe economic disruption. This experience heightened vigilance around local currency stability and foreign exchange management.

The SC's recent consultation paper suggests this cautious approach continues. Authorities clearly identify stablecoins as vulnerable to market price volatility and potentially harmful to local financial system stability. Rather than view them as simple payment tools, regulators view stablecoins as potential macroeconomic risk factors.

Despite regulatory caution, private sector stablecoin experiments continue. Blox develops 'MYRC,' a ringgit-pegged stablecoin. MYRC operates as a fiat-collateralized stablecoin. The token pegs 1:1 to the Malaysian ringgit on the Arbitrum and Ethereum blockchain. Users can mint MYRC through local bank account deposits via the Blox platform. They can redeem it similarly. MYRC currently undergoes beta testing. The project has achieved approximately $700,000 market capitalization with limited but active trading.

However, regulatory overlap creates project delays. Malaysia's dual oversight between the SC and BNM creates unclear responsibilities and standards. Blox has pursued this project for three years and engaged with regulators. The company remains without final approval due to uncertain regulatory positions. The absence of consistent stablecoin regulatory frameworks represents the core approval delay factor.

Signs of change emerge. Prime Minister Anwar recently announced consideration of regulatory sandboxes through the 'Digital Asset Innovation Hub.' This initiative includes ringgit-based stablecoin experiments. This central bank-led sandbox will provide fintech and digital asset companies with controlled environments. Companies can test new technologies and services in these environments.

Given persistent government concerns about capital controls, initial focus will likely target local financial ecosystem applications rather than cross-border payments. Potential use cases include 24-hour payment infrastructure. This extends beyond traditional 9-hour banking systems. Escrow services can use conditional payment functions. Recent social issues like fitness center closures affect prepaid refunds. Uncertain home renovation contract fulfillment creates opportunities. 'Programmable money' pilot implementations can address everyday financial problems.

4.3. NFT Community

Malaysia's NFT market remains in decline. Many participants who entered during the NFT boom at high prices experienced losses and exited the market. This follows patterns seen in other countries. While some holders of global projects like BAYC, Azuki, and Milady exist, activities remain mostly small-scale hobby gatherings. Malaysia lacks notable locally-grown NFT projects.

The Pudgy Penguins local community stands out as an exception in this environment. The community has built an independent ecosystem in Malaysia that goes beyond simple NFT holder networks. An open operational approach and welcoming culture drive this success. The community welcomes anyone to participate freely regardless of NFT ownership. Entry barriers remain low for newcomers.

Community members naturally connect with people from diverse backgrounds. They form meaningful relationships in a pure fun and positive atmosphere that extends beyond simple information exchange. The community regularly hosts various offline events like wine tastings, go-karting, and pickleball. Members maintain monthly gatherings even during bear markets. The community also actively engages with external communities. Members participate in other community events and collaborate through networking and referrals when requested.

The community is preparing 'MY PENGU ACADEMY,' an onboarding education program for Web3 beginners. This initiative aims to expand the community and diversify participation.

Meanwhile, local exchange Hata listed Penguin-related memecoin $PENGU on its global platform (offshore-only version). Some Malaysian community members trade this through workarounds. Given local restrictions on memecoin trading, this structure likely provides another motivation for community participation.

Malaysia's NFT market operates more on community-based activities than trading. Pudgy Penguins ranks as the most organized and scalable example among these communities. In smaller market environments, offline networks become increasingly important. Pudgy Penguins' operational approach demonstrates significant insights for this context.

4.4. Islamic Finance

Malaysia has established itself as Asia's largest Islamic finance center. The country holds the global #1 position in the sukuk (Islamic bond) market with unmatched status. This foundation stems from a population that is over 60% Muslim. Islamic finance comprises approximately 47% of the entire financial system as of 2024.

This characteristic influences the cryptocurrency industry. Malaysia became the world's first country to officially recognize cryptocurrency as Shariah-compliant assets. The country has approved 15 digital assets as Shariah-compliant. Bitcoin receives this approval. All digital asset recognized market operators in Malaysia must maintain Shariah compliance. Local exchanges Luno and Hata both follow these requirements.

Malaysian regulators interpret cryptocurrency as potentially more Shariah-compliant than traditional finance. Traditional banking systems provide loans based on deposits and collect interest. This potentially violates Shariah's prohibition on riba (interest). Cryptocurrency operates on structures that involve compensation for actual work like network maintenance and transaction verification. Bitcoin mining is considered legitimate compensation for computing-based verification work. Ethereum staking rewards contributions to network validation. These differ fundamentally from interest income.

Various Islamic finance-based crypto products have emerged. Halogen Capital operates as the world's first Shariah-compliant crypto mutual fund manager. The company manages approximately $75 million in assets. The company offers Shariah Bitcoin funds, Ethereum funds, and other products.

Nawa Finance operates as a Shariah-compliant DeFi protocol. The company partners with Solv Protocol to provide Bitcoin DeFi products. These products meet Shariah standards. These products received Shariah certification from Amanie Advisors. Amanie Advisors is officially registered as Shariah advisors with the SC. The products provide safe and transparent halal revenue structures. Nawa Finance has surpassed $50 million in Total Value Locked (TVL). The company demonstrates notable achievements in Shariah-compliant DeFi.

Sharlife shows innovation in Islamic charity systems. The platform enables cryptocurrency payments for zakat (Islamic obligatory charity). Sharlife collaborates with the Federal Territory Islamic Religious Council (MAIWP) to build digital charity systems.

Practical constraints exist. Cryptocurrency remains unrecognized as official payment methods in Malaysia. This limits real-world applications. The federal system creates nationwide institutionalization challenges.

Malaysia's global expansion potential remains highly valued. Expertise accumulated in Islamic finance and experience represent competitive assets in overseas markets. Malaysia develops Shariah-compliant crypto products with this expertise. Malaysia previously expanded sukuk market institutions and product models to the Middle East and Southeast Asia. This expansion was based on local success. This suggests similar expansion paths for cryptocurrency. Major Muslim countries like Saudi Arabia and Indonesia may adopt Malaysia's Shariah-compliant digital asset model. Malaysia has sufficient potential to lead global digital transformation in this sector.

4.5. Mainnet Environment

Malaysia's blockchain mainnet environment remains limited. Among global mainnets, Solana Superteam stands as virtually the only active presence in Malaysia. Superteam collaborates with various Malaysian Solana-based projects—such as Jupiter and Meteora—and focuses on supporting local builders and founders to expand the ecosystem. The organization actively runs community-centered activities including hackathons to achieve this goal. Ethereum communities like Ethereum KL also operate locally, but conduct limited activities.

IOTA stands as an exception. The project participated as an official sponsor of Malaysia Blockchain Week 2025 (MYBW 2025). IOTA conducts active marketing activities locally. The company obtained Shariah compliance certification from Cambridge IFA. Since then, IOTA has strengthened branding that targets the Islamic finance market. The company accelerates its Malaysia market strategy.

Meanwhile, the Malaysian government focuses strategically on its own blockchain infrastructure development rather than simply adopts global public chains. The government concentrates on creation of a regulatory-friendly and controllable local-centered blockchain ecosystem. They develop this through the national blockchain infrastructure 'MBI' with local mainnet project Zetrix. This shows a policy direction. The government aims to establish stable and sustainable blockchain infrastructure under national leadership rather than depend on external chains.

4.6. Bitcoin Mining

Malaysia ranks among the top 10 global bitcoin mining countries by hashrate. Large-scale mining facilities concentrate in Borneo's Sarawak and Sabah regions. These facilities base operations on extensive hydroelectric infrastructure. These regions have excess power supply relative to demand. Bitcoin mining actively utilizes surplus electricity.

Large hydroelectric plants in Sarawak produce electricity that exceeds regional demand. This surplus power will be exported to Singapore and other countries in the future. Pending the completion of submarine cable infrastructure, the mining industry utilizes this power as a priority. Local governments collaborate with mining companies. Cheap electricity drives rapid mining industry growth. This provides a stable alternative to the volatile global mining environment. China's mining ban created this instability.

However, illegal mining poses serious problems. According to Malaysia's blockchain association ACCESS, state utility company Tenaga Nasional Berhad (TNB) reported approximately RM441 million (USD 100 million) in power losses from illegal mining. Power theft cases occur frequently. Some cases have led to fires. Recent incidents include identity theft for fraudulent power contracts. Authorities have intensified crackdowns in response. They seized 985 illegal mining devices.

Malaysia's mining industry shows growth potential based on abundant renewable energy and institutional acceptance. The industry simultaneously faces social costs and regulatory issues from illegal mining. This demonstrates that Malaysia emerges as a global bitcoin mining hub while carrying challenges that require resolution.

5. Malaysia's Crypto Market: Opportunities and Challenges

5.1. Challenge Factors

Malaysia comprises multilingual populations that speak various languages. This can provide communication advantages. However, projects face complexity when they enter the market. They must tailor strategies according to different target groups. This creates entry barriers.

For example, Chinese Malaysians and non-Chinese Malaysians show distinct differences. They use different languages, community channels, and investment preferences. Shariah law influences the Malay majority. They show relatively passive attitudes toward financial investment. Chinese Malaysians actively engage in local and international stock investments. They also actively use derivatives on global crypto exchanges and on-chain trading platforms like Hyperliquid. The market segments clearly. Single approach strategies cannot address this structure effectively.

Malaysia's Web3 industry faces limitations in its developer talent foundation. Malaysia has many capable entrepreneurs. However, the developer pool remains relatively limited compared to neighboring countries like Vietnam and Indonesia. Excellent talents often move to Singapore and other external locations. They establish companies or continue careers outside Malaysia. This creates structural problems. Malaysia struggles to accumulate talent within its internal ecosystem. Malaysia produces global-level talent. However, the local Web3 ecosystem itself faces structural constraints. These constraints hinder activation. This acts as an important challenge factor for local market development.

5.2. Opportunity Factors

Despite these challenges, Malaysia's crypto market retains notable potential. The market shows particular strengths in talent-based networks. Projects like Coingecko and Etherscan originated in Malaysia and gained global influence. Malaysian talents also play key roles in various global projects including Meteora, Drift, and Pendle. These individuals form close networks throughout the global crypto industry. They create environments where they can share opportunities and collaborate.

These networks show potential to serve as foundations for Malaysia's local ecosystem development. Recently, talents who built careers overseas have increasingly returned to Malaysia. Low living costs and stable living conditions drive this trend. These returnees inject new vitality into the ecosystem through connections with local communities. Knowledge sharing and collaboration opportunities with the next generation also expand.

Major universities including Asia Pacific University (APU), Sunway University, and Taylor's University actively conduct blockchain-related academic activities. This ensures continued influx of next-generation Web3 talent. If government-level policy support aligns with these trends, Malaysia's Web3 ecosystem can grow at a faster pace.

Malaysia serves as an Islamic finance center. The market is evaluated as having unique opportunities in Shariah-based digital assets. Islamic finance currently occupies a small portion of the crypto market. However, related demand shows signs of gradual expansion. Binance's recent launch of Shariah-compliant products demonstrates this trend. Malaysia has institutionalized various Shariah products in traditional finance. The country possesses both institutional foundations and practical experience to extend this trend to digital assets. This makes Malaysia particularly noteworthy.

This foundation does not limit itself to the local ecosystem. Global demand for Shariah compliance exists. Potential markets center particularly around the Middle East region. Connection possibilities with these markets suggest favorable positioning. Malaysia can develop as a global Islamic digital asset hub in the future.

🐯 More from Tiger Research

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Key Leaders Insights

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Key Takeaways

• Vietnam’s young, tech-savvy, and mobile-first population combined with one of the highest global crypto adoption rates, makes it a natural leader for early Web3 adoption and innovation in Southeast Asia.

• Vietnam’s regulatory stance is shifting from ambiguity to active development, with sandboxes and formal licensing frameworks underway, potentially turning Vietnam into a regulated crypto hub in 2025–2026.

• Vietnam's crypto market is overwhelmingly retail-driven, with high trading volumes and robust P2P infrastructure, while institutional participation remains dormant but poised to grow with regulatory clarity.

• Vietnam lacks a native exchange, but regulatory momentum may soon enable both local and foreign CEXs to operate under formal frameworks, reshaping the market landscape.

• ​​Vietnam has produced globally respected DeFi projects like Pendle and Kyber, proving local builders can lead on innovation, though broader user education and trust are still evolving.

• The emergence of a nationally backed Layer-1 and strong private sector support signals Vietnam’s ambition to develop sovereign Web3 infrastructure.

• After a boom-and-bust cycle, Vietnam’s GameFi space is maturing with a focus on quality, long-term gameplay, and infrastructure, no longer driven by short-term speculation alone.

• Vietnamese teams excel in wallet development, showing technical agility and early-mover instincts, but must now compete with global giants on trust, UX, and ecosystem alignment.

• Vietnam has the largest tech talent pool in Southeast Asia; with stronger blockchain education, its developer base could scale into one of the region’s most capable Web3 workforces.

• Vietnam’s crypto community is not just a support base — it is the market. Success depends on community trust, localization, and long-term engagement, not just paid marketing

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1. Vietnam’s Economic Landscape and Evolution into Web3

Vietnam is one of Southeast Asia’s fastest-growing digital economies — young, mobile-first, and increasingly tech-driven. With a population of 101 million, a median age under 33, and internet penetration of nearly 80%, the country is well-positioned to adopt emerging technologies early.

Its GDP growth consistently ranked among the highest in the region pre-COVID (6–7% annually), and a growing middle class is driving rapid digitization across sectors.

Crypto adoption in Vietnam is among the highest globally. According to Chainalysis and other industry reports, Vietnam has repeatedly ranked in top 5 in crypto adoption worldwide — driven not by institutional flows, but by a vibrant, retail-first user base.

As of 2024, an estimated of 21.2 million Vietnamese adults have owned or used crypto assets. Annual transaction volumes surpass $100 billion, placing Vietnam consistently in the top global rankings for retail crypto activity.

This adoption is deeply linked to broader digital trends. Vietnam’s digital economy is projected to reach $45 billion by 2025, fueled by mobile-first financial services. Building on this digital foundation, Vietnam's high mobile adoption rates and large population position the country as a key player globally.

Vietnam’s Web3 journey began with early blockchain infrastructure projects like TomoChain and Kyber Network in 2017–2018.

But the real inflection point came in 2021, when Sky Mavis launched Axie Infinity and its custom Ronin sidechain. The play-to-earn boom that followed put Vietnam on the global map, attracting millions of users and catalyzing venture capital investment into the local ecosystem.

Since then, Vietnam has emerged as a unique player in Web3, not just for its user base, but for its builder base.

Despite a lack of regulatory clarity, local teams have launched DeFi, GameFi, wallet, and infrastructure projects used globally. The convergence of a tech-savvy population, strong economic fundamentals, and early Web3 wins has positioned Vietnam as a leading crypto market in Southeast Asia, and one of the few where adoption is both wide and deep.

2. Regulatory Landscape and Policy Development

Vietnam’s regulatory stance on crypto has historically been cautious. While ownership and trading of crypto assets are allowed, cryptocurrencies are not recognized as legal tender, and using them for payments has been banned since 2017.

This created a regulatory “grey zone” — crypto trading remains widespread but unregulated. However, this stance is now evolving. The government has begun moving toward formal oversight frameworks, with signs of regulatory development and pilot initiatives emerging since 2021.

Several ministries have become actively involved in shaping regulations for crypto. Notably, the Ministry of Finance has introduced a regulatory sandbox, and other agencies are clarifying their roles and mandates to address digital asset use, investor protection, legal classification, and fraud prevention.

For businesses, this creates a short-term challenge but a long-term opportunity. Until the sandbox is live and licensing schemes are formalized, companies still operate in legal limbo. There are no official licenses, no tax clarity, and lingering uncertainty.

However, firms that engage early, follow global compliance standards, and work with regulators could gain first-mover advantages once formal regulation is in place.

Taxation is expected to follow licensing. Vietnam currently lacks a crypto tax framework, but the MoF has signaled that once exchanges are legalized, capital gains or transaction-based taxes will be introduced. P2P trading has made enforcement difficult, but licensed exchanges will make compliance easier to enforce.

In summary, Vietnam’s regulatory outlook is shifting from passive restriction to structured experimentation. The 2025–2026 period will be critical. If pilot programs succeed, Vietnam could emerge as a regulated crypto hub in Southeast Asia, offering clarity for businesses and protections for users while still supporting innovation.

3. Cryptocurrency Trading Landscape

3.1. Retail vs. Institutional Trading

Despite high global adoption rankings, Vietnam still lacks a licensed domestic crypto exchange due to regulatory uncertainty. Trading activity is almost entirely retail-driven, and it mostly happens on global centralized exchanges.

Around 17 million Vietnamese users trade on platforms like Binance, Bybit, MEXC, BingX, and HTX. In 2023, Vietnamese users ranked fourth globally on Binance by monthly trading volume, reaching over $20 billion in a single month.

Retail traders here are known for being fast-moving and risk-tolerant. Many actively trade spot, futures, and margin products, often chasing short-term opportunities and high-return campaigns.

In contrast, institutional activity in Vietnam is nearly absent. Regulatory ambiguity has kept banks, asset managers, and corporates out of the market. No licensed crypto funds, ETFs, or formal investment products are available locally.

Still, interest from the institutional side is growing quietly. Several firms are researching crypto-linked products while waiting for clearer legal frameworks. When formal regulation arrives, institutional participation could reshape the market by bringing more liquidity and a professional trading infrastructure.

3.2. P2P Trading

Because Vietnamese users can’t trade crypto directly through local bank accounts — due to the lack of licensed exchanges or fiat onramps — peer-to-peer (P2P) trading has become essential infrastructure. Platforms like Binance P2P allow users to buy and sell stablecoins using VND via local bank transfers.

These platforms offer escrow protection and host hundreds of verified merchants. The process is fast, widely trusted, and supported by major exchanges like Binance, Bybit, and OKX, all of which have localized P2P features for Vietnam.

In addition, whales users also directly operate P2P channels. These traders often work through group chats or private deals, using the same P2P rails for larger transactions. Some also supply liquidity to other P2P participants.

Risks still exist. Fraud is an issue in informal trading groups, and some banks have flagged or frozen accounts tied to crypto transfers or money laundering. Authorities have also started tracking large fiat-to-stablecoin flows more closely.

A licensed exchange would help reduce these frictions. But even with regulation, P2P is likely to remain a core channel for Vietnamese users entering and exiting the crypto market.

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4. Sector Deep-Dives: Vietnam’s Crypto & Blockchain Ecosystem

Vietnam’s crypto ecosystem is broad and fast-evolving, with local players active across nearly every part of the value chain. From Layer-1 infrastructure and DeFi protocols to gamefi, wallets, Vietnamese builders are not just following global trends — they’re helping shape them.

This section provides a focused look into key sectors where Vietnamese teams are making meaningful contributions, offering both local context and global relevance.

4.1. Centralized Exchanges

Vietnam doesn’t have a local centralized exchange (CEX) due to regulatory uncertainty. Because of that, the CEX landscape is fully dominated by global platforms. New players like Coinstore have entered the market as well, but breaking into this space remains a challenge due to entrenched user loyalty and competition.

Binance, Bybit, MEXC, BingX, Bitget, and HTX lead the market. These exchanges have gained traction in Vietnam through localization strategies. They have added Vietnamese-language interfaces, built VND-based P2P trading, hired local teams, sponsored events, and tailored marketing to Vietnamese users.

Futures and spot products are especially popular here. Vietnamese users are among the most active globally on these platforms.

Looking ahead, two developments could reshape Vietnam’s exchange landscape. First is the emergence of a local, fully Vietnamese-run exchange — something the market has lacked due to regulatory ambiguity. A native CEX could cater more closely to local needs, integrate more deeply with domestic payment systems, and build long-term brand trust.

Second, the regulatory environment is shifting. In March 2025, the Ministry of Finance proposed a sandbox program for digital asset exchanges. If implemented, this could allow both foreign and local platforms to operate legally under a formal framework. Exchanges like OKX, BingX, or Bybit are paying close attention and preparing for that shift.

Together, these moves could push Vietnam’s exchange market from a gray zone into a more regulated and mature ecosystem — one that supports both global platforms and local innovation.

4.2. Decentralized Finance (DeFi)

Vietnam is one of the most active DeFi user markets in Asia, and most of the activity comes from a large retail user base seeking high-yield opportunities across global DeFi platforms.

Vietnam has produced a few standout projects. For instance, Kyber Network was one of the first major DeFi protocols globally, co-founded by Vietnamese engineers in 2017. It played a foundational role in Ethereum’s early DeFi ecosystem.

A more recent example is Pendle Finance, co-founded by a Vietnamese developer. Pendle created a secondary market for tokenized yield, letting users trade future yield from assets. The protocol surpassed $250M in TVL in 2024 and is now considered one of the most innovative fixed-income platforms in DeFi.

These successes demonstrate that Vietnam has the capability to build protocols at a global standard. Projects like Kyber and Pendle show what's possible when Vietnamese builders aim beyond the local market and focus on long-term innovation.

However, these are still exceptions. The market has seen too many short-term projects or slow rugs that have eroded trust, both locally and abroad. In that context, the success of serious builders offers a rare but important signal: Vietnam can create globally competitive DeFi infrastructure when the vision is right.

On the user side, while Vietnam is known for its active and risk-tolerant retail base, the number of users who truly understand and navigate DeFi in depth remains relatively small. Advanced DeFi strategies or complex protocol mechanics are still barriers for many. Yet the core motivations — high risk, high reward, and a constant drive to earn — make Vietnam an ideal market for DeFi growth.

Among all Web3 verticals, DeFi remains the sector with the strongest potential to elevate Vietnam’s presence on the global stage, both through homegrown protocols and a highly engaged user base.

4.3. Infrastructure & Layer‑1

Vietnam’s blockchain infrastructure sector has produced technically sound Layer-1 projects that gained early global attention. However, few have managed to sustain developer ecosystems or drive long-term usage at scale.

In the early years, projects like TomoChain and KardiaChain marked Vietnam’s first foray into Layer-1 development. These networks demonstrated technical feasibility and laid foundational know-how, but adoption remained modest and has since been surpassed by newer, more specialized initiatives. TomoChain has since rebranded to Viction, though its ecosystem remains relatively quiet.

A defining example of Vietnam’s Layer-1 capabilities is Ronin Network, built by Sky Mavis to support Axie Infinity. Ronin was designed as a high-throughput Ethereum sidechain to accommodate millions of daily transactions, proving that Vietnamese teams can deliver infrastructure at a global scale.

While originally gaming-focused, Ronin operates as a standalone L1 with wide recognition in the Web3 ecosystem.

A major shift came in early 2025, when One Mount Group — a leading Vietnamese tech conglomerate — committed $200–500 million to building a national Layer-1 blockchain. This chain is being designed for real-world use cases such as digital identity, financial infrastructure, and supply chain management. It reflects a strategic push from Vietnam’s corporate sector to own and control core blockchain infrastructure domestically, rather than relying on external protocols.

One Mount Group’s CEO Nguyen Thi Diu (centre) receives a commemorative medal from Party General Secretary To Lam

Vietnam is also entering the DePIN space. The most visible project here is U2U Chain, a DAG-based Layer-1 developed by a Vietnamese team. Unlike traditional blockchains, DAGs (Directed Acyclic Graphs) organize transactions in a graph structure rather than a single chain, enabling higher throughput and scalability.

In November 2024, U2U Network successfully closed funding rounds, raising a total of $13.8 million from prominent investors including KuCoin Ventures, Chain Capital, and JDI Ventures. This significant financial milestone propels U2U Network further in its mission to provide a comprehensive solution for DePIN.

To conclude, while Vietnam has not yet produced a dominant general-purpose Layer-1 beyond Ronin, the country’s users are already active across major ecosystems like Ethereum, Solana, and Sui. This makes it challenging for new Layer-1s to gain meaningful traction, especially when there’s limited financial upside or token incentives for early users.

In addition, with Vietnam’s first nationally backed Layer-1 now in development, there is renewed hope that a credible, purpose-built Vietnamese blockchain platform can emerge — one that aligns with the country’s digital transformation agenda and has true domestic adoption potential.

4.4. GameFi

GameFi is the most visible Web3 success story Vietnam has produced to date, but it has also become one of the most saturated and challenging sectors.

The 2021 play-to-earn boom put Vietnam on the global map, with Axie Infinity reaching over 2.8 million daily users at its peak and showing how Vietnamese teams could build global-scale products and infrastructure. Axie’s success attracted major VC funding and set the precedent for Web3 gaming worldwide.

Vietnamese VCs played a pivotal role in the GameFi boom and felt both the highs and lows. Many local funds generated outsized returns by investing early in projects like Thetan Arena, earning credibility and capital.

In the aftermath of that success, however, the space was quickly flooded with low-quality, short-term GameFi projects — many of which were created with the sole purpose of listing tokens and exiting. Dozens of copycat games launched in Vietnam with weak gameplay, unsustainable token models, and little to no post-launch development.

And VCs are not an exception, some of those same VCs were burned due to investment in poor projects. This created a lasting perception problem for “Vietnamese Web3 games” among both local users and international investors.

On the bright side, later projects like Sipher and Heroes of Mavia represent a shift toward higher-quality game design and long-term strategies. In parallel, former guilds like Ancient8 are transitioning into infrastructure builders, offering rollup stacks and dev tooling specifically for game developers. This “guild-to-infra” movement reflects a maturing mindset: enabling the next generation of GameFi rather than chasing the last.

Despite the downtrend of GameFi, the potential of Vietnam’s retail user base in gaming remains strong. Vietnam has one of the largest and most engaged gaming communities in Southeast Asia, especially on mobile.

For companies and developers looking to enter Vietnam’s GameFi space today, the bar is significantly higher. After a full cycle of GameFi hype and disillusionment, Vietnamese users have significantly raised their standards. Gameplay experience and financial models are now scrutinized more carefully, leaving little room for low-quality, short-term products. The market has shifted from speculative excitement to a more discerning, value-driven mindset which demands both engaging games and sustainable economies.

4.5. Wallets

Wallets are one of the few Web3 product categories where Vietnamese teams have consistently launched competitive products.

Notable examples include Coin98 Wallet, SubWallet, and Holdstation, each reflecting a different strategy within Vietnam’s wallet-building scene. Coin98 has grown into a multi-chain super app, combining wallet functionality with a broad suite of DeFi tools. SubWallet takes an ecosystem-focused approach, building specifically for Polkadot and cultivating a niche among developers and users. Holdstation, meanwhile, positions itself as the “better version of MetaMask” of emerging chains like zkSync or Berachain, gaining early momentum by focusing on on-chain derivatives and smooth user UX.

Vietnam's enthusiasm for building wallets reflects two key traits of the local builder mindset: 1) speed in capturing early infrastructure gaps and 2) a strong instinct for distribution-first products. Wallets serve as a direct access point to users and ecosystems, making them a natural fit for teams focused on scale and adoption. Vietnamese builders have consistently moved fast, often launching wallets or integrations in emerging ecosystems like Berachain or zkSync before they became widely popular. This early-mover advantage reflects both technical agility and a deep understanding of how user acquisition drives ecosystem relevance.

That said, competition in Vietnam is intensifying. Global wallets like MetaMask and Rabby dominate in the EVM space, Phantom leads on Solana, and CEX-backed wallets like OKX Wallet, Binance Web3 Wallet, and Bybit Wallet are rapidly expanding with exchange-native user funnels. The wallets landscape here competes not only on UX, but on trust, feature completeness, and ecosystem alignment.

Despite the challenges, wallets remain one of Vietnam’s strongest Web3 product categories — and a clear example of how local teams identify early narratives and build around them with speed. However, the nature of this category remains vulnerable — wallets that tie themselves too closely to a single ecosystem risk stagnate or decline if that ecosystem loses relevance.

4.6. Developer Ecosystem

Vietnam is home to the largest pool of tech talent in Southeast Asia, with over 560,000 IT professionals and 50,000–60,000 new graduates each year. The majority of developers are under 35 — young, adaptable, and increasingly engaged with emerging technologies like blockchain.

Despite the lack of formal blockchain training in most universities, many Vietnamese developers have become proficient through self-learning and community support. Platforms like YouTube, GitHub, and local bootcamps have filled the gap.

While RMIT Vietnam offers blockchain-related electives, more technical education is still needed across the board. VBI Academy, a grassroots initiative, has been one of the few offering free, hands-on blockchain development programs to train smart contract developers locally.

Developers can often be found through community hubs like Open Guild (Polkadot), SolanaSuperteam (Solana), or at meet-ups and even hackathon events. Local Facebook groups and Discord servers also play a growing role in connecting builders with projects.

Vietnamese developers have contributed to protocols across the Web3 spectrum, and with successes seen in different sector, there is little doubt about the quality of local talent. What’s missing is a stronger educational foundation. With proper training and structured programs, Vietnam’s developer base could scale into one of the most capable in the region.

As the government rolls out its digital transformation initiatives, the ecosystem is becoming more conducive to long-term developer growth. Vietnam is well-positioned to become a regional hub not just for using blockchain, but for building it.

5. Community landscape

The Vietnamese crypto community isn’t just an audience — it’s the engine. This community plays a central role in how products gain traction, narratives spread, and reputations are built.

Vietnam’s Web3 growth has never been institution-led. It’s grassroots, social, and hyper-reactive. According to Kyros Ventures, 76% of Vietnamese crypto holders make decisions based on referrals — often from Telegram groups, Twitter threads, or conversations with friends.

Trust comes from community proof, not credentials. Projects are expected to earn their place, not buy it. Many local teams learned this firsthand: community support can generate powerful early momentum, but once sentiment turns, no amount of paid promotion can reverse it. In Vietnam, the same crowd that builds you can also break you.

This influence stems from a cultural alignment with speculation and early-stage opportunity. Vietnamese users are active, agile, and willing to move fast. Profit is a major motivator, but so is recognition, reputation, and the collective excitement of being early. This has created one of the most engaged and retail-driven crypto communities in the world.

Crypto communities in Vietnam tend to organize around four core types:

• Trading-focused groups, especially for spot and futures trading. (Ex: TCCL, Margin ATM, Pho Tai Chinh)

• Airdrop-hunting groups, which monitor new campaigns and coordinate airdrop strategies. (Ex: HC Gem Alerts, Airdrop Hidden Gems)

• News and education-focused groups, which curate updates, share research, and explain complex ideas. (Ex: Upside, 5 Phut Crypto, Coin68, ThuanCapital, Bigcoin)

• All-rounder communities, which combine all of the above and often serve as the main point of contact for retail users entering the space. (Ex: HC Capital, Tradecoinvietnam, Nghien Crypto)

Telegram is the beating heart of this ecosystem, where sentiment shifts, drops trends, and new projects either take off or get buried. But that dependence came into sharp focus when Telegram was banned nationwide. While most users quickly resumed activity through VPNs and proxies, the disruption exposed the fragility of relying on a single platform. During that time, some groups have started branching out to Discord as alternatives.

As for Twitter (X), once a secondary platform, it is now gaining ground, especially as monetization tools push more local KOLs to build public personas. But influence here is layered and informal. Relationships matter, and surface-level KOL campaigns can backfire without community context. Promotion alone doesn’t work; trust must be earned, maintained, and defended.

Two behaviors dominate day-to-day crypto life in Vietnam: airdrops and trading. Many treat airdrop participation as a structured routine — tracking new campaigns, sharing strategies, and coordinating entries across wallets. Simultaneously, futures and CEX trading drive constant discussion, with users actively pursuing volatility and rewards. For a large segment of the market, these activities are the reason to stay engaged. They reflect Vietnam’s high risk appetite, speed, and hunger for asymmetric upside.

But the community is maturing. Past bull cycles have produced both winners and harsh lessons. Today’s users are more discerning — skeptical of hype, quick to detect red flags, and increasingly focused on project fundamentals. Many KOLs have adapted, shifting from blind promotion to content that prioritizes education, due diligence, and sustainable engagement.

For global projects entering Vietnam, it’s critical to understand: the community is not a marketing lever — it is the market. Builders need to localize messaging, show up in native channels, and offer Vietnamese-language support. Superficial outreach won't cut it. Projects that invest in long-term trust, show real value, and build relationships will find not just users, but partners.

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TL;DR

• Key Region for Web3 Projects: With 1.4 billion people (median age 28), 9.75 million developers, over 1,200 projects, and $3 billion in investments, India offers optimal conditions for generating the necessary scale for Web3 ecosystem growth

• Regulatory Uncertainty as the Primary Obstacle: Government regulatory challenges including 30% fixed tax rates, 1% withholding tax, absence of dedicated regulatory bodies, and complex jurisdictional issues present significant barriers to market growth

• Phased Approach Strategy Required: Successful market entry necessitates a strategic progression from Web3-friendly user onboarding (local language support, regional marketing) to builder targeting (partnerships with local investors) and finally expanding cooperative relationships with government and enterprises

1. Why You Need to Understand the Indian Market

New Web3 projects continue to launch at a rapid pace, but what they chase above all is numbers—a proxy for real users, builders, and investors in their ecosystem. Yet many projects struggle to generate meaningful traction. In a crowded field, verifiable metrics stand out as the clearest signal to attract attention. Asia—particularly India—has emerged as a key region where projects can achieve real scale, not inflated stats.

India’s first advantage is its youthful population. With a median age of around 28, India is younger than Indonesia (30) and Vietnam (32), giving it a broader base of early adopters eager to embrace new technologies.

The second advantage is scale. With a population exceeding 1.4 billion—and only about 8% currently holding cryptocurrency—India offers massive untapped potential for Web3 adoption.

Third is its world-class development talent. India boasts top-tier engineering universities and an estimated 9.75 million developers. Projects like Polygon already showcase the country’s strong capabilities in Web3 innovation.

India is one of the most promising regions for generating the critical "numbers" that Web3 projects seek today. Many projects have already entered the market in pursuit of meaningful results. However, like any region, India presents both opportunities and challenges. A well-informed approach is essential—and for that, the India market report by Hashed Emergent, a Web3 VC firm based in India and focused on emerging markets, offers valuable insights.

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2. Key Summaries from Hashed Emergent Report

2.1. Web3 Ecosystem

India has built a robust Web3 ecosystem, with over 1,200 projects spanning various sectors. Indian Web3 startups have raised more than $3 billion in total funding to date, with 2024 showing particularly strong momentum—securing $564 million, more than double the investment volume of 2023.

By sector, infrastructure has attracted the most investment, followed by finance. In contrast, funding for entertainment-related projects has declined significantly. Notably, Indian founders based overseas have played a key role in advancing infrastructure projects, contributing to globally recognized platforms such as EigenLayer, Sentient, and Avail, all of which have drawn substantial investor interest.

Emerging areas like DePIN (Decentralized Physical Infrastructure Networks) and BaaS (Blockchain as a Service) have recently gained traction, reflecting investor interest in applying decentralization across a wider range of industries.

Investment is also increasingly targeting technologies relevant to the AI era, including AI-based infrastructure, middleware, and data tooling. Within India, leading VCs such as Hashed Emergent and Polygon are actively supporting and investing in the local Web3 landscape.

2.2. Consumer and Enterprise Adoption

India’s cryptocurrency investment market has shown a clear resurgence since 2023. The country ranked first in Chainalysis’ Global Crypto Adoption Index, scoring highly in both centralized exchange (CEX) and decentralized finance (DeFi) activity.

Retail investor portfolios are composed of approximately 45% blue-chip cryptocurrencies with established stability. Interestingly, memecoin trading volume grew fivefold compared to other crypto assets—pointing to a shift in retail investor preferences.

By age group, those aged 27 to 40 dominate token investments, supported by higher income levels and stronger market awareness. Investors in their 40s recorded the highest average investment per user—three times that of other age groups. Meanwhile, Gen Z represents 35% of all crypto investors, contributing significantly to the market’s continued growth.

India's Web3 gaming market has grown by securing a user base centered on Generation Z. Particularly, 50% of gamers are under 25 years old, demonstrating how younger demographics quickly adapt to new gaming paradigms. The average revenue per user (ARPU) for Web3 games reached $220, significantly higher than the $120 for Web2 games.

India’s Web3 gaming market has expanded rapidly, driven by a user base largely composed of Generation Z. Notably, 50% of gamers are under the age of 25, reflecting how younger demographics are quick to embrace new gaming models.

The average revenue per user (ARPU) for Web3 games stands at $220—significantly higher than the $120 ARPU for traditional Web2 games. In addition, the paying user ratio in Web3 games is 64%, with high-spending users accounting for 11%. Both figures exceed those of Web2 games (56% and 8%, respectively), indicating a stronger revenue structure.

Moreover, 38% of traditional gamers in India have already experienced Web3 gaming, and among them, 60% continue to engage—highlighting strong user retention.

The Indian government has taken proactive steps to support blockchain adoption through the National Blockchain Framework, which aims to improve the safety and transparency of public services. Key initiatives under this framework include:

• Vishvasya: A Blockchain-as-a-Service platform;

• NBFLite: A sandbox environment designed for startups and universities to accelerate blockchain research;

• Praamaanik: A tool for verifying mobile app authenticity;

• National Blockchain Portal: A centralized hub for blockchain resources and initiatives.

In parallel, the Reserve Bank of India (RBI) is leading a Central Bank Digital Currency (CBDC) pilot, which has already onboarded 5 million users in collaboration with 16 banks. The pilot is testing blockchain-based payment methods.

2.3. Developer Ecosystem

India has established itself as a global hub for Web3 entrepreneurs and developers, now accounting for 12% of the world’s cryptocurrency developer base—the largest share globally.

According to a survey of over 500 developers, India's Web3 ecosystem is rapidly growing through young talent, entrepreneurial energy, and expanding global exposure. An ecosystem supporting growth has formed through university partnerships and flexible working models.

However, challenges remain. Despite growing international engagement, 51% of surveyed developers stated that their salaries still fall short of global standards.

Hackathons and developer communities have played a crucial role in shaping India’s Web3 landscape. These platforms offer hands-on experience, mentorship, funding access, and opportunities for global visibility. As participation continues to rise, they are paving the way for the next generation of Web3 developers.

2.4. Regulations, Tax and Policy

India’s Web3 industry is undergoing a period of transition, marked by rapidly evolving regulations and shifting tax policies. While regulatory initiatives aim to enhance transparency and investor protection, stringent measures and high tax burdens are currently limiting market growth—highlighting the need for more balanced policy development.

Since 2023, the Indian government has significantly strengthened anti-money laundering (AML) regulations for virtual assets. All Virtual Asset Service Providers (VASPs) are now required to register under AML laws, implement customer identification procedures, maintain transaction records, and appoint dedicated AML officers.

Regulatory enforcement intensified further in late 2024, when the government took the unprecedented step of blocking access to foreign cryptocurrency exchanges that failed to comply with local laws. This move clearly established regulatory compliance as a non-negotiable requirement for market entry.

Tax policy is also undergoing major reform. The 2025 Finance Bill introduced a mandatory reporting framework aligned with the OECD’s Crypto Asset Reporting Framework, requiring disclosure of crypto transactions and user information. At the same time, India plans to broaden the legal definition of virtual digital assets to encompass a wider category of “crypto assets.”

However, the existing tax structure remains a significant hurdle. Cryptocurrency investment profits are taxed at a flat rate of 30%, with no allowance for cost deductions, while each transaction is subject to a 1% withholding tax. These policies place considerable pressure on market liquidity.

Structural issues also persist. The absence of a dedicated Web3 regulatory authority has resulted in fragmented oversight, with overlapping responsibilities among multiple government agencies. This has led to ongoing ambiguity in the classification of virtual assets and the treatment of decentralized protocols. As a result, many Web3 companies face barriers to accessing basic financial infrastructure, including bank accounts and payment services. In addition, some exchanges restrict cryptocurrency withdrawals, limiting users’ ability to self-custody assets.

To enable sustainable growth in India’s Web3 industry, key priorities include the establishment of a Web3-specific regulatory framework, reduction of tax burdens, improved access to financial services, and the development of reasonable policies for non-custodial services such as self-custody.

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3. India at the Cusp of a Breakthrough

Overall, India has built a relatively mature Web3 ecosystem, with established industries and a broad user base. However, the core challenge remains regulatory uncertainty. While macro-level fundamentals are generally favorable, a comprehensive and coherent regulatory framework—essential for long-term ecosystem development—has yet to be established. Despite the government's active role in promoting blockchain initiatives, the lack of a dedicated regulatory body and overlapping jurisdiction among agencies continue to create ambiguity, particularly from the perspective of foreign stakeholders.

In a changing global regulatory environment, this confusion significantly reduces market attractiveness. This acts as the greatest barrier to market entry for investors and companies, necessitating prompt resolution. Fortunately, various industry leaders including Hashed Emergent continue dialogue with regulatory authorities, and these efforts are likely to become the starting point for change.

Given the current landscape, entering the Indian market requires a phased approach:

1. Focus on high-adaptability users
Indian users are generally well-versed in Web3 and exist in large numbers. Effective user onboarding can yield strong early results. To succeed, companies should invest in local language documentation and work with local personnel or marketing agencies that understand the nuances of India’s digital culture and business environment.

2. Engage the builder community
The next phase should target builders. At this stage, direct collaboration with ecosystem investors like Hashed Emergent becomes essential. Local agencies often lack the technical depth or resources needed to support this group effectively.

3. Establish strategic partnerships with government and enterprises
Despite ongoing regulatory challenges, the Indian government has achieved tangible progress through initiatives such as the National Blockchain Framework. Strategic cooperation with public institutions and major enterprises can help secure an influential position in the market and potentially shape future policy direction.

🐯 More from Tiger Research

Read more reports related to this research.

• [Special Report] Hong Kong Web3 Market Analysis: From Asian Financial Hub to Web3 Hub

• [Special Report] Tiger Research Asia Insights: 2024 Review & 2025 Outlook

• [Special Report] Korea Web3 Market Guide

Disclaimer

This report has been prepared based on materials believed to be reliable. However, we do not expressly or impliedly warrant the accuracy, completeness, and suitability of the information. We disclaim any liability for any losses arising from the use of this report or its contents. The conclusions and recommendations in this report are based on information available at the time of preparation and are subject to change without notice. All projects, estimates, forecasts, objectives, opinions, and views expressed in this report are subject to change without notice and may differ from or be contrary to the opinions of others or other organizations.

This document is for informational purposes only and should not be considered legal, business, investment, or tax advice. Any references to securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or an offer to provide investment advisory services. This material is not directed at investors or potential investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn't harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research's reports, it is mandatory to 1) clearly state 'Tiger Research' as the source, 2) include the Tiger Research logo. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.