Cryptocurrency adoption in South and Central Asia is experiencing a significant surge, driven by real-world use cases, according to blockchain intelligence firm Chainalysis.
Emerging Use Cases
In a recent webinar discussing the Chainalysis 2023 Geography of Cryptocurrency report, Chengyi Ong, head of APAC policy at Chainalysis, highlighted the growing use of digital assets in countries like India and Vietnam.
“Crypto adoption is outpacing other regions in countries like India and Vietnam,” Ong stated.
Ong emphasized that the adoption trend in the region is primarily fueled by tangible use cases such as blockchain-based gaming, remittances, and protection against currency volatility.
Commercial Applications
During the webinar, Kim Grauer, research director at Chainalysis, showcased examples of widely-used commercial applications that have attracted users to the world of crypto.
Grauer noted the popularity of cricket-themed non-fungible tokens (NFTs) in India and the success of the Axie Infinity blockchain game developed by Vietnamese studio Sky Mavis.
“These innovative use cases bring in a new cohort of users who become native to crypto, driving further adoption,” Grauer explained.
The success of these use cases illustrates the increasing adoption of cryptocurrencies in the region.
Geo of Cryptocurrency Report
Chainalysis’ 2023 Geography of Cryptocurrency report revealed an overall decrease in global crypto adoption since its peak in Q2 2021. However, the report highlighted an exception for low-to-middle-income (LMI) countries, including Pakistan and India.
“LMIs, accounting for 40% of the world’s population, have returned to pre-FTX levels of adoption,” the report stated.
The collapse of the FTX cryptocurrency exchange in November 2022 had a profound impact on the industry, resulting in a $2 trillion market loss and reduced adoption worldwide. High-income nations responded with increased regulatory scrutiny, further dampening adoption.
Nevertheless, the report sees the increased adoption in LMIs as extremely promising, especially alongside growing institutional interest in crypto in high-income countries.
“We could see a combination of bottom-up and top-down cryptocurrency adoption in the near future if these trends hold, as digital assets fulfill the unique needs of participants in both segments,” the report argues.
About Chainalysis
Chainalysis, founded in 2014 by Michael Gronager, a former executive at Kraken cryptocurrency exchange, is a New York-based blockchain analysis firm. The company is backed by major players in finance, including investment banks Blackstone and Bank of New York Mellon, and was valued at $8.6 billion in its most recent funding round in 2022.
Despite recent layoffs, Chainalysis remains a prominent player in the field. The company measures crypto adoption using a comparative metric that accounts for national income levels and population size.
India ranked the highest in the adoption index, followed by Nigeria, with eight Asia Pacific countries making up the top 20.
