Original Article Title: Robinhood and Coinbase's Asia Playbook

Original Article Authors: Chi Anh, Ryan Yoon, Yoon Lee, Tiger Research

Original Article Translation: Deep Tide TechFlow

Executive Summary

· Western Centralized Exchanges (CEX) Targeting the Asian Market: Companies like Robinhood and Coinbase are expanding into Asia, leveraging regulatory-friendly hubs and localized strategies to tap into the market.

· Regional Platforms Maintain Strong Positions: Local exchanges, with their strong market presence, continue to hold a competitive advantage, making it challenging for Western exchanges to dominate the Asian market.

· Key to Success Lies in Localization: Success hinges on partnerships with financial institutions, compliance with regulatory requirements, and the launch of customized products and services that align with local user behavior.

1. Exploring East-West Dynamics in the Crypto Market

Asia holds a dominant position in the global crypto space, with its strengths evident in three key areas:

1) Leading trading volumes, 2) Widespread retail adoption, 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 have saturated their domestic markets are increasingly turning their attention to Asia, seeing it as the next frontier for expansion. For example, Robinhood plans to establish its headquarters in Singapore, while Coinbase is entering the Southeast Asian market through localized stablecoins, highlighting the strategic importance of Asia.

However, this market is far from vacant. Local Centralized Exchanges (CEX) in various countries already have high user penetration, and global exchanges like Binance are also widely 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, discussing the strategic moves of Western and regional participants, the challenges they face, and the collaborative opportunities emerging in this rapidly developing ecosystem.

2. Entering the Asian Market: Strategies for Western Participants

2.1 Robinhood's "Compliance-First" Strategy

Robinhood's expansion into Singapore marks a strategic move in the rapidly growing digital asset market in Asia. The company, by announcing a $2 billion acquisition of the European digital asset exchange Bitstamp, gained regulatory approval and integrated into Singapore's crypto-friendly framework. Bitstamp has received the Monetary Authority of Singapore's (MAS) in-principle approval, providing Robinhood with a significant regulatory advantage and streamlining its market entry process.

According to Bloomberg, Robinhood plans to launch crypto products in Singapore by 2025 through the newly established entity. Despite the acquisition of Bitstamp not being finalized yet, its obtained in-principle approval from the MAS has laid a solid foundation for Robinhood's compliance strategy.

Robinhood's emphasis on regulatory compliance stands in stark contrast to 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 into Singapore is part of its broader international growth strategy. The company has already launched crypto trading in Europe and introduced stock options trading in the UK. With an expanded licensing scope, Robinhood is working towards offering comprehensive services in multiple regions, including both digital and traditional finance.

The choice of Singapore as a regional base is not coincidental— the country boasts a transparent regulatory framework, highly concentrated institutional capital, and a growing crypto user base. These factors make Singapore an ideal springboard for Robinhood to test and expand its Asian crypto business.

This strategic foothold reflects a broader trend among Western Centralized Exchange Platforms (CEXs): entering the Asian market through regulatory hubs like Singapore and then gradually expanding to more complex markets. With increasing regulatory clarity across the region, Robinhood expects to expand its services from Singapore to other markets and leverage this as a launchpad for larger-scale growth.

2.2 Coinbase's Stablecoin and Infrastructure Strategy

Coinbase is strategically expanding into the Southeast Asian market through a stablecoin-centric approach. Thailand and the Philippines are advancing stablecoin projects pegged to their local currencies, aligning closely with Coinbase's strategic direction. Thailand is testing stablecoins through the Phuket Sandbox Initiative, while the Philippine central bank has approved a stablecoin pilot project pegged to the Philippine peso, demonstrating local regulators' open stance towards these innovations.

Source: X(@TxnSheng)

To further drive this trend, SCB 10X recently introduced a Base-based Ruby Wallet. This wallet is built on Fireblocks' Wallet-As-A-Service infrastructure, supporting the Thai Baht ($THBX) and USD stablecoins. This initiative enhances local infrastructure development in line with Coinbase's overall goals, particularly in promoting Base and the use of the Thai Baht stablecoin.

In addition, Coinbase will integrate Transak into its wallet in 2022, enabling users to purchase cryptocurrency using local currency and payment systems. This reflects Coinbase's broader market entry strategy: rather than directly expanding its exchange platform business, it focuses on wallet services and Base, aligning with government-led digital currency initiatives. This strategy contrasts sharply with Robinhood's direct trading platform expansion strategy.

Through these strategic partnerships, Coinbase is gradually embedding itself in Asia's evolving digital economy. This approach illustrates Western companies' efforts to compete in the region's market by building infrastructure rather than directly competing with regional dominant trading platforms.

These two cases demonstrate different market entry approaches: Robinhood prioritizes regulatory compliance and attracting institutional investors, while Coinbase focuses on financial infrastructure and stablecoin utility. Both strategies have growth potential, but their success will depend on these companies' adaptability in Asia's complex regulatory and competitive environment.

3. Market Dynamics: Regional Dominance and Western New Players

Asia's diverse regulatory environment has led to local exchange platforms' dominance in some regions, while providing opportunities for global Centralized Exchange Platforms (CEXs) to develop in other areas. For Western CEXs looking to expand into Asia, understanding these different market structures is crucial.

(Note: AI was used for translation on the original image, so there may be some textual errors)

3.1 Dominance of Local Exchange Platforms

South Korea is a typical example of a market dominated by local exchange platforms, with its strict regulatory framework enabling platforms like Upbit and Bithumb to thrive. These platforms have an advantage by adhering to strict compliance measures (including the "travel rule" requirement and financial reporting obligations). These regulations have set a high barrier to entry, making it difficult for Western CEXs to enter the Korean market without significant licensing and compliance investments.

Similarly, Japan is a highly regulated market where local exchange platforms such as BitFlyer and Coincheck continue to hold a dominant position. The Japanese Financial Services Agency (FSA) enforces strict licensing requirements to ensure that only highly compliant entities can operate. Foreign exchange platforms like KuCoin and Bybit have received regulatory warnings, further highlighting the barriers Western companies face when entering the Japanese market.

On the other hand, Binance successfully entered the Thai market through a strategic partnership with the major Thai conglomerate Gulf Energy. The two parties established a joint venture and launched a regulated digital asset exchange. This partnership enabled Binance to obtain approval from the Thai Securities and Exchange Commission (SEC), ensuring compliance and leveraging Gulf Energy's extensive business network in Thailand.

By partnering with influential local companies, Western exchange platforms can find a compliant and scalable path to enter restricted markets. This approach not only reduces regulatory friction but also benefits from existing business network support. Rather than directly competing with local dominant players, Western exchange platforms may be able to achieve greater success by establishing local partnerships, focusing on institutional services, or providing specialized financial products that meet regional needs.

3.2 Dominance of Global Exchange Platforms

Countries like Vietnam present a significantly different market landscape. Due to the lack of clear regulation for cryptocurrency exchange platforms, the development of local platforms is limited. Even with existing local exchange platforms, high tax rates have driven investors to seek alternatives on global exchange platforms.

In this regulatory vacuum, global exchange platforms such as Binance, OKX, and Bybit have significantly expanded their influence. These platforms have gained market share by offering low fee policies and peer-to-peer (P2P) services, successfully meeting user demands, especially in areas where local exchange platforms struggle to meet requirements.

As part of their market entry strategy, global trading platforms have actively embraced 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 have effectively increased market penetration by establishing direct communication channels with local users.

However, many platforms often operate in legal grey areas lacking clear regulatory frameworks. Nevertheless, with tightening regulations on a global scale, the necessity of complying with local legal requirements has significantly increased. This shift is prompting global trading platforms to make major operational adjustments.

Several notable cases further highlight this trend. For example, in January 2024, the Indian financial enforcement agency requested the blocking of IP addresses of nine foreign exchanges, including Binance, until Binance pledged to comply with regulations before restoring access. In November 2023, the Philippine Securities and Exchange Commission warned Binance for unauthorized operations and in March 2024 formally instructed the blocking of Binance's website and app IP addresses. These actions clearly demonstrate the increasingly stringent regulatory oversight.

In response, global trading platforms are gradually moving away from operating in legal grey areas and instead adjusting their business to comply with clear legal frameworks. Compliance is no longer optional but a key foundation for building sustainable, long-term operations. As the cryptocurrency industry continues to mature, this trend is expected to intensify further.

4. Market Penetration Strategy

OKX Billboard in Vietnam Source: OKX

To succeed in Asia's crypto market, deep localization is required—not just simple language translation. Trading platforms must integrate local currencies, stay abreast of regional asset trends, and connect with local payment systems.

In Vietnam, peer-to-peer (P2P) services supporting the Vietnamese Dong (VND) and strategic outdoor advertising campaigns have helped centralized exchange platforms (CEX) establish a strong market foothold. Similarly, hosting events aligned with local festivities can also enhance brand awareness and market visibility.

Understanding user behavior is another key factor. In economies with high remittance demand (such as 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 facilitate easier fiat-to-crypto conversions. These tailored financial products address localization needs, driving adoption among retail users.

Lastly, establishing strategic partnerships with local financial institutions is crucial for building trust and expanding reach. For example, in Thailand, cooperation with banks has facilitated the establishment of fiat on-ramps, lowering the entry barrier for retail investors.

To effectively compete in Asia's complex and rapidly evolving crypto market, Western CEXs must prioritize regulatory compliance, ecosystem collaboration, and localized innovation.

5. Future Outlook: Collaboration Over Competition

Instead of attempting to replace incumbents in the market, Western CEXs may find greater success through a collaboration strategy. They can choose to partner with local exchanges rather than compete directly—positioning themselves as compliance allies or infrastructure providers and coordinating with regulatory authorities.

Today, Asia is both a massive opportunity and a significant challenge. To succeed in this market, expansion of operational scale is not enough; a profound understanding of regional market dynamics, user behavior, and ever-evolving regulatory frameworks is also crucial.

Cryptocurrency regulation is rapidly evolving in various countries, particularly in Asia, where the pace of change is especially swift. Western exchanges looking to expand must adopt a "compliance-first, collaboration-driven" strategy. The most critical lesson for any CEX planning to enter the Asian market is this: it is not a market to conquer but one to integrate into.

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