# Southeast Asia’s Local Chains Thrive Amid Regulations, Language, and Cultural Nuances

Southeast Asia is witnessing a surge in local blockchain chains, tailored to the regulatory, linguistic, and cultural specifics of each nation. Unlike global Layer 1 blockchains like Ethereum and Solana, these local chains are designed with an eye on policy goals, local financial infrastructure, and regulatory compatibility.

Local chains fall into three categories: government-supported chains aligned with national policies, privately-led chains developed to meet market demands, and dependent chains that leverage global blockchains due to a lack of local infrastructure. Each type exhibits distinct differences in development authorities, strategic direction, and regulatory integration.

Local chains that prioritize compatibility with local regulations and practical usability are gaining competitive edges, and this trend is expected to intensify.

# Introduction

Southeast Asia is one of the regions with the highest concentration of Web3 users. Notably, Vietnam, Thailand, and the Philippines consistently rank high in global cryptocurrency adoption indices. These nations showcase the unique evolution of local blockchain projects, which cater to specific regulatory, linguistic, and cultural needs, optimizing the user experience in ways that global mainnets often cannot. This report examines the current state of local blockchains in Southeast Asia, emphasizing their differentiation strategies within the competitive global Web3 industry.

# Diverse Development Approaches in Southeast Asia’s Infrastructure

Southeast Asia, often viewed as a single regional market, reveals significant differences when examining its blockchain infrastructure development by country. Various entities, including governments, financial institutions, and private companies, have actively engaged in developing Layer 1 blockchains, leading to diverse trajectories based on each country’s regulatory challenges and policy priorities.

Emerging “local chains” fundamentally differ from global giants like Ethereum or Solana. While global chains prioritize universality and scalability, local chains are designed to align with national legal frameworks, financial systems, and technological environments. Governance and operational structures are also designed to meet regulatory conditions and policy objectives. Analogously, global chains are akin to AWS’s universal cloud infrastructure, while local chains resemble localized infrastructures like South Korea’s Naver Cloud or Vietnam’s VNG Cloud, designed to comply with local regulations and industry demands.

General characteristics of local chains include:

– **Local-first Strategy**: Is the chain designed around national policy goals?
– **Compliance with Local Regulations**: Does the chain structurally incorporate local regulatory requirements (KYC, AML, data localization)?
– **Integration with Local Infrastructure**: Does the chain technologically link with local banking, identity verification, and payment infrastructures?
– **Local Establishment and Operation**: Is the chain established and operated locally?

Not all chains meet all four criteria, but their degree of alignment with these factors can classify them as local chains. Conversely, global chain-based projects merely targeting or serving a specific nation don’t fall under this definition.

## Vietnam: Convergence of Private-led Innovation and National Strategy

Vietnam exemplifies how private-led technology development can synergize with government policy advancement. While regulations are still evolving, increasing discussions are fostering a structure where public and private sectors grow concurrently.

Early industry leaders like Viction and KardiaChain led Vietnam’s Layer 1 ecosystem, focusing on retail-centric use cases and developer-friendly environments, striving for market foundation without government support. The inception of 1Matrix in May 2025 marked a new turning point. Developed by the major Vietnamese conglomerate One Mount Group, this Layer 1 blockchain aims to drive national digital transformation, data sovereignty, and cross-industry system integration. Unlike previous chains, 1Matrix emphasizes direct linkage with administrative and public services, reflecting the policy-driven model.

This aligns with Prime Minister’s Decision No. 1236, promoting the development of domestically made platforms like “Make in Vietnam” blockchain networks. Developed under this policy framework, 1Matrix showcases a model combining private technological capabilities with national digital strategy.

## Indonesia: Startup-led Experimental Local Chain Development

In Indonesia, local chains prove that startup-driven experiments and practical demand can fuel development without national support. Vexanium, a Layer 1 chain spearheaded by local startups, serves a range of applications within Indonesia’s economic ecosystem, including digital payments and loyalty programs for small businesses. Its cost efficiency and flexible deployment aim to bridge financial accessibility gaps for small enterprises using blockchain technology.

Mandala Chain, a hybrid Layer 1 chain based on Polkadot, supports both public and private blockchains. It caters to both private companies and public institutions, addressing sectors like digital identity verification, supply chain management, and medical data processing.

These examples illustrate that a Layer 1 ecosystem can expand based on practical problem solving and local development capabilities, independent of direct government support.

## Philippines: High Web3 Adoption with Absence of Local Chains

The Philippines has actively employed blockchain technology since the early days in areas like Web3 gaming and decentralized finance (DeFi). Platforms like Yield Guild Games (YGG) have rapidly expanded, forming communities of over a million users and acting as pivotal points for the play-to-earn market. Despite a strong user base, the country remains reliant on global public chains like Ethereum, Ronin, and Binance Smart Chain, with no independent Layer 1 chain development occurring domestically.

Blockchain adoption cases in the Philippines are limited and experimental. Projects like UnionBank’s Project i2i, a permissioned Ethereum network connecting rural banks, and PHPX, a multi-bank issued stablecoin on Hedera, reflect these constraints. The central bank’s CBDC pilot project, Agila, also operates on a closed network. All these examples leverage external technologies and are restricted to specific purposes.

While the Philippines’ blockchain ecosystem has naturally evolved around a digital-friendly user base and private demand, it lacks a national technology strategy or local infrastructure development. This dependence on external infrastructure might pose long-term limitations in regulation enforcement, data localization, and public sector integration, revealing potential constraints in policy alignment and technological independence.

## Thailand: Exchange-led Local Chain Development

In Thailand, an exchange-led model illustrates rapid growth of a Layer 1 chain within regulatory frameworks. Bitkub, the largest digital asset exchange in Thailand, initiated Bitkub Chain, which finds applications across various fields, from NFT and loyalty programs to fintech-related services and public sector pilot projects. As of 2024, the chain recorded over 5 billion cumulative transactions and more than 2 million active wallets.

Bitkub Chain operates BTB (Bitkub Thai Baht), a stablecoin pegged 1:1 with the Thai baht, experimenting with on-chain payments and financial services. Instead of developing a state-led chain, the Thai government supports private-led infrastructure development through exchange licenses and sandbox programs, indicating a balanced approach that combines private-sector expertise with government regulatory support.

## Cambodia: Central Bank-led Digital Payment Infrastructure

Cambodia’s central bank spearheads its digital payment system through a Layer 1 blockchain. Bakong, designed by the National Bank of Cambodia based on Hyperledger Iroha, is a permissioned chain supporting interbank settlement, retail payments, and QR-based wallet integration. The network operates centrally with nodes limited to authorized financial institutions.

As of early 2025, Bakong had over 30 million registered accounts, with cumulative transaction volume reaching around $105 billion, surpassing Cambodia’s GDP. The platform supports both the Cambodian riel (KHR) and the US dollar (USD), with participation from over 20 financial institutions.

Designed to enhance financial inclusivity, reduce cash and foreign currency dependence, and strengthen currency flow management, Bakong incorporates KYC and AML requirements and includes cross-border payment capabilities. It serves as a pilot CBDC model operating as a digital payment infrastructure aligned with policy objectives.

# Evolving Local Infrastructure in Southeast Asia

The development of local blockchains in Southeast Asia varies significantly based on national regulatory environments and economic contexts. Diverse government perspectives and blockchain utilization goals lead to technical structures and operational methodologies that exhibit marked differences across countries.

These development patterns can be broadly categorized into three models:

1. **Government-supported model**: Exemplified by Cambodia’s Bakong and Vietnam’s 1Matrix, these chains are closely aligned with national policy goals. Bakong is directly managed by the central bank, while 1Matrix, though privately developed, aligns with national digital strategies. They employ permissioned network structures integrating closely with legal tender systems to meet KYC and AML requirements, focusing on reducing foreign currency dependence and securing data sovereignty.

2. **Privately-led model**: Chains like Thailand’s Bitkub Chain and Vietnam’s early chains (e.g., Viction, KardiaChain) are developed by private companies to capitalize on market opportunities. These chains focus on commercial applications like loyalty programs and fintech services, securing legal operational bases through regulatory cooperation, and leveraging agile experimentation and flexible scalability.

3. **Global infrastructure-dependent model**: In countries like the Philippines, which lack native Layer 1 infrastructure, applications are developed on existing public chains like Ethereum, BNB Chain, and Solana. This model allows rapid development and deployment but offers limited control over regulatory compliance and data sovereignty.

These strategies don’t converge into a single direction but rather unfold uniquely based on each country’s specific conditions. Blockchain development’s structure and progression are shaped by the developing entities, core functionalities, and how they integrate with existing regulatory frameworks.

# Conclusion

Southeast Asia’s local chains are not merely blockchains developed in specific countries but practical infrastructures tailored to each country’s regulations, technology, and economic environment. The aforementioned case studies of Vietnam, Indonesia, the Philippines, Thailand, and Cambodia show that local chains are developed in various ways through government, companies, and startups, with their utilization goals closely linked to regional contexts.

This trend transcends blockchain technology alone. Despite Google’s dominance in the global search market, localized platforms like South Korea’s Naver or China’s Baidu capture their markets by tailoring to regional language, content, and regulatory responsiveness. Similarly, global chains expand rapidly based on universality and liquidity but have inherent limitations in organically connecting with national regulatory and public service systems.

Conversely, local chains create practical value by being designed to fit national policy goals, financial infrastructures, and user characteristics, ensuring regulatory compliance and functional utility. Thus, the core question isn’t which protocol dominates the global market but which infrastructure operates effectively and creates value under unique national conditions.

In emerging markets, sustainable chains are more likely those that prove operable and sustainable within the local context and regulatory environment, rather than those merely excelling technically. The future of local chains hinges on addressing practical issues and harmonizing with regulatory frameworks rather than purely on technological superiority.

(Note: This article is based on the comprehensive report by global Web3 research institution TigerResearch, available on their official site).