island fintech oct '25 #2

sea's funding reality check, crypto-fiat bridges, indonesia's infra bet

greetings islanders,

hope you’re having a great week! we’re just two weeks out from singapore fintech festival 2025 (nov 12-14), which marks the event’s 10th anniversary. if you’re attending, let me know. would love to connect over coffee and talk all things payments and fintech. happy to also share that island fintech is an official media partner for sff - please use code SFFMPISLAND for 20% off delegate passes!

quick reminder: island fintech is your biweekly dose of high-signal fintech updates from across southeast asia. if you’ve got tips, insights, or want to contribute, just reply to this email. if you haven’t already done so, subscribe below:

dips 🎣

• the funding squeeze is real. southeast asian fintech startups raised just $839 million in the first nine months of 2025—a 39% year-on-year drop and down 56% from 2023 levels. early and seed-stage funding took the biggest hit, falling 66% and 63% respectively. late stage firms attract the majority of venture funds today, and singapore continues to dominate, capturing 84% of all regional fintech funding.
  🏝️if insight: the market’s shifting from “growth at all costs” to “show me profitability.” if you’re pre-revenue and burning cash, this is the hardest fundraising environment in years. but if you’ve got unit economics figured out, you’re suddenly the hottest deal in town. quality over quantity is back.

• thunes (full disclosure: my employer) just launched instant stablecoin payouts across 130+ countries, unifying fiat and digital assets in a single api. this is a major step toward bridging traditional banking rails with crypto infrastructure for faster, cheaper cross-border transfers.
  🏝️if insight: this is what the next wave of cross-border payments looks like… hybrid rails that let you move between fiat and crypto seamlessly. the winners won’t be pure crypto or pure banking - they’ll be the infrastructure players who can do both without friction.

• hashkey exchange is expanding into southeast asia through a partnership with malaysia’s hata, bringing together two licensed digital asset platforms. the mou focuses on building secure frameworks for digital asset services, leveraging regulatory strengths in hong kong and malaysia.
  🏝️if insight: malaysia’s betting hard on becoming a regional crypto hub, and these partnerships show the strategy is working. watch for more hong kong-sea partnerships… regulatory arbitrage between markets is the new competitive advantage.

• indonesia’s digital payments continue their explosive trajectory. the market hit $94.5 billion in 2025 and is expected to double to $194 billion by 2030. cash usage has dropped from 70% to 51% since 2020, with qris now reaching over 30 million merchants. bank indonesia’s bi-fast real-time payment system now connects 135+ banks and payment providers.
  🏝️if insight: qris is quietly becoming the blueprint for regional payment unification. 30 million merchants means this isn’t just e-commerce anymore. it’s street vendors, warungs, and the entire cash economy digitizing. the infrastructure opportunity here is massive.

• vietnam passed its groundbreaking digital technology industry law in june 2025, effective january 2026. it’s the world’s first law of its kind, classifying ai, semiconductors, and digital assets as strategic sectors. the law introduces import-duty exemptions for r&d equipment, tax incentives up to 50%, and recognizes virtual and tokenized assets for the first time.
  🏝️if insight: vietnam is quietly playing the long game while everyone’s fixated on singapore and indonesia. this law creates regulatory clarity that venture capital desperately needs. expect more institutional money flowing into vietnamese tech in 2026.

• italian fintech startups are heading to singapore as part of the italian trade agency’s global startup program. nine fintech companies will spend four weeks (oct 21 - nov 14) in singapore through a partnership with plug and play apac, marking increased european interest in southeast asian expansion.
  🏝️if insight: european fintechs are waking up to sea’s growth potential, but they’ll need to localise fast - what works in rome won’t work in jakarta. the real test is whether these startups can adapt to fragmented markets, different regulatory frameworks, and hyper-local payment preferences.

dives 🐋

deep dive: cb insights’ fintech 100 2025 — decoded for builders (finextra, oct 25) - how fintech shifted from flashy consumer apps to building financial infrastructure, with ai agents, stablecoin maturation, and mega-rounds dominating funding.

asia fintech and payments regulatory update - october 2025 (linklaters, oct 8) - comprehensive regulatory roundup covering hong kong’s virtual asset framework, singapore’s deepfake risks, thailand’s digital asset pilot, and indonesia’s crypto offering regulations.

southeast asia’s fintech slowdown is real — and singapore is winning the long game (asia tech daily, oct 21) - deep analysis of the 39% funding drop, singapore’s 84% market capture, and how early-stage funding collapsed while late-stage players thrive.

fintech global fs regulatory round-up - w/e 17 october 2025 (herbert smith freehills, oct 17) - global fintech regulatory developments including fsb recommendations for cryptoasset activities and service providers.

reassessing southeast asia’s growth outlook amid singapore’s mixed economic signals (ai invest, oct 12) - comprehensive economic analysis examining singapore’s q3 2.9% contraction, regional growth projections, and tech sector valuations hitting $250b.

q1 2025 southeast asia venture capital update (j.p. morgan, oct 21) - quarterly deep dive into southeast asia’s venture capital landscape highlighting regional opportunities and emerging trends.

dbs overtakes petronas to become asean’s most valuable brand in 2025 (brand finance, oct 14) - analysis revealing top 500 asean brands valued at $306.6 billion with dbs taking the crown as the region’s most valuable brand.

🎏 some tweets

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