Countries in Central and Southern Asia and Oceania Lead in Crypto Adoption
Cryptocurrency adoption has expanded beyond its niche origins, but it remains uneven across different regions. According to Chainalysis’ Global Crypto Adoption Index (CGCAI), countries in the Central and Southern Asia and Oceania (CSAO) region are leading the way in grassroots adoption. India, in particular, ranks highly for digital asset use at the grassroots level.
Focus on Grassroots Adoption
The CGCAI focuses on grassroots adoption by examining countries where people allocate a significant portion of their wealth to cryptocurrency. This approach contrasts with ranking countries based on transactional volume, which would favor wealthy nations and provide an inaccurate picture of global digital asset adoption.
CSAO Region Dominates
According to Chainalysis’ methodology, six out of the top ten ranked countries in the CGCAI are located in the CSAO region. India takes the top spot overall, ranking first across all metrics except for peer-to-peer exchange volume. Vietnam and the Philippines are also notable entries from this region.
Lower Grassroots Demand in Developed Countries
In contrast to developed countries like the US, the UK, Japan, and Canada, which have lower grassroots cryptocurrency demand, underdeveloped countries show a stronger pull towards cryptocurrency usage. Factors such as poor financial infrastructure and low trust in authorities contribute to this trend.
Reasons for Underdeveloped Country Adoption
Poor financial rails, volatility of local currencies, low trust in governments, and the role of cryptocurrency in cross-border remittances are some of the factors that make digital assets more appealing in underdeveloped countries.
Global Adoption on the Slide
Since the Q4 2021 market top, global cryptocurrency grassroots adoption has been declining. The Global Index fell from approximately 0.90 to a local bottom of 0.15 by Q4 2022. Although there has been some recovery since then, grassroots adoption remains weak under current bearish conditions.
Different Adoption Trends in Income Classifications
Lower-middle-income countries have shown the strongest recovery in grassroots adoption, while upper-middle-income countries continue to lag behind.
Challenges of Turning Grassroots Demand into Adoption
Despite India’s top ranking in grassroots crypto adoption, the country’s lawmakers remain skeptical about cryptocurrency. This highlights the challenges faced by the digital asset industry in turning grassroots demand into mature adoption without supportive regulation, even in democracies.
Hot Take: Crypto Adoption Varied Across Regions, with Underdeveloped Countries Leading the Way
The latest data from Chainalysis’ Global Crypto Adoption Index shows that countries in Central and Southern Asia and Oceania are at the forefront of grassroots cryptocurrency adoption. This is in contrast to developed countries like the US and UK, where grassroots demand for digital assets is lower. Factors such as poor financial infrastructure and low trust in authorities make underdeveloped countries more inclined towards cryptocurrency usage. However, overall global adoption has been on the decline since late 2021. Despite India’s high ranking in grassroots adoption, regulatory challenges hinder its progress. It remains to be seen how the landscape of cryptocurrency adoption will evolve in different regions.
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