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Chainalysis sees global crypto adoption dominated by emerging markets

Despite “Crypto Winter,” Global Crypto Adoption Has Slowed Down Less Than Expected, Chainalysis disclosure today as part of its annual index. Even with the bear market and the rapid decline of major cryptocurrencies, as well as recent collapse of several well-known projects such as the algorithmic stablecoin TerraUSD and the lending company C, adoption is still well above pre-market 2019 levels.

The blockchain intelligence firm’s report ranks 154 countries by key transaction metrics measured through centralized exchanges, DeFi protocols, and peer-to-peer trading volume, analyzing what Chainalysis calls what Chainalysis calls adoption base — where people are putting most of their money into crypto.

The results show that global adoption is distributed, from Southeast Asia to Eastern Europe to Latin America, with the US also increasing year over year.

According to Kim Grauer, research director at Chainalysis, although this year’s index doesn’t show significant changes from 2021, it conveys the different ways people are using cryptocurrencies.

“When we talk about adoption around the world, we should think about use cases in different regions with different socioeconomic factors,” she said. Luck.

Asia

For the second year in a row, Vietnam topped the list, with the Philippines rising to second, from 15th place. Grauer said the popularity in Southeast Asia can largely be attributed to blockchain-based games to earn money. The most prominent example is Vietnam’s own Axie Infinity, a game that attracts players with lucrative NFTs rewards and leads to the formation of “guilds” or organizations that will pay startup costs when play in exchange for player rewards. .

Axie Infinity had a spectacular collapse this year after cybercriminals hacked it for over $600 million, but players – especially in developing markets – have turned to playing the game for money as a source of income. Even as users are running away from Axie, many more money-playing titles are on the way, with more developers based in Southeast Asia.

India, in fourth place, has a different story. According to Grauer, much of the adoption is driven by NFT markets, such as Tiger Global and Sequoia-backed FanCraze, launched in early 2022 to sell cricket based NFT.

Grauer said that while many investors may have shied away from more traditional crypto assets like Bitcoin during the bear market, they have turned to an asset built around their favorite pastime. This makes it more accessible.

“India is a prime example of newcomers growing because of use cases powered by DeFi,” said Grauer.

China also ranks in the top 10 – a surprise in 2021 for the country Cryptocurrency banshows that the ban has not been effective.

Latin America

Latin America remains a diverse region in terms of use cases and economic contexts, but Chainalysis research indicates that adoption remains on the same general trend. Unlike Southeast Asia or India, where more people are turning to apps like NFTs and games, adoption in Latin America is driven by more traditional crypto assets offered through exchanges. exchanges and financial technology platforms.

Argentina, which ranked 13th, suffered from severe inflation, as well as restrictive banking regulations. For many people, cryptocurrencies provide access to the global financial system, with inherent risks often more than by their country’s weak currency.

Brazil, Latin America’s largest country and seventh globally, is home to some of the most innovative fintech services in the region, including e-commerce giant Mercado Livre, which has launched a whole cryptocurrency exchange and it private token through the popular payment engine Mercado Pago. Another example is Nubank, Brazil’s largest digital bank, obtain 1 million users on its cryptocurrency trading platform just a month after launching this summer.

United States and high-income countries

Although the US has risen in the rankings this year, Gauer cautions that the gains have been relative — in fact, there is evidence of a decline in adoption, with 16% of Americans saying they have invested, traded or use cryptocurrencies from two consecutive Pew Research polls, In November 2021 and August 2022.

Despite the high level of institutional investment in the United States, adoption has yet to establish a foothold in the public mind, which is true in other high-income countries. From the top 20 countries in the global index, 10 lower middle-income countries and eight upper-middle income countries, with just two high-income countries: the United States and the United Kingdom. With financial systems in high-income countries more stable, fewer people consider risky assets.

“[These countries] Gauer added that that killer app will appear to attract more people.

In other places

Ukraine ranks third, although not necessarily due to the large volume of crypto donations move into the country after the Russian invasion. Grauer said Ukraine has always been a tech-savvy country with a high density of startups.

Nigeria and Kenya also ranked in the top 20, likely due to the high level of online payment innovation in both countries, including mobile banking service M-Pesa in Kenya. Like the other countries on the list, Nigeria also deals with a lot regulatory uncertainty and unstable economythis can push people towards cryptocurrencies.

Overall, the story is like last year— Global cryptocurrency adoption is being driven by emerging markets.

“We find that a lot of people don’t have the same level of access to investments,” Grauer said, explaining that they turned to crypto services instead. “We see that a lot in places like India and Vietnam, where there are young, tech-savvy populations who are starting to have disposable income.”

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