Overview
The surge in cryptocurrency use around the world is largely driven by people wanting better access to financial services, more control over their money, and new avenues for investment. It’s a more straightforward, affordable alternative to traditional banking, knocking down barriers like hefty fees and tedious paperwork.
Chainalysis, in its fourth yearly report, sheds light on how and where grassroots cryptocurrencies are being adopted globally. Rather than focusing on countries with the most transactions, which are typically wealthier and larger nations, the report aims to spotlight places where everyday folks are using crypto the most. This gives a better understanding of the global crypto landscape, illustrating how digital currencies are weaving into people’s financial routines across the globe.
Interestingly, the region of “Central & Southern Asia and Oceania” stands out in the report, boasting six countries in the top 10 list.
Crypto Exchange platforms are playing a big part in this shift, making it easy to buy, sell, and use cryptocurrencies for a variety of needs, slowly making them a part of people’s daily lives.
Table of Contents (click to expand)
The 2023 Global Crypto Adoption Index further emphasizes this trend: in countries with unstable currencies, economic conditions, or restricted regulations, there’s a marked increase in grassroots crypto adoption. People turn to these digital assets as a safeguard against inflation and to mitigate the uncertainties prevalent in their markets. Check the top 10 countries out:
1. India
India has become a big player in the cryptocurrency market, even with tough tax rules. The country is now the second-largest crypto market globally thanks to its widespread use at a grassroots level as indicated by the Global Crypto Adoption Index. This ascension is seen across various cryptocurrency activities, placing India in the top ten for many categories.
However, local crypto exchanges face challenges due to a 1% tax on transactions, which isn’t always followed by international exchanges. This makes foreign platforms more attractive to Indian users. Yet, despite these hurdles, the strong demand for cryptocurrency in India shows that crypto has a solid place in the country and will continue to grow as long as people are interested.
2. Nigeria
Nigeria, facing economic troubles and job losses, has seen a rise in cryptocurrency use, making it a big player in Africa’s crypto scene. When the country tried to change its currency to fight inflation, people felt more financial uncertainty, pushing them towards digital currencies like Bitcoin.
As Nigeria’s money lost value, interest in cryptocurrencies grew. Also, when the global crypto market had ups and downs, Nigerians joined in, hoping to profit from price changes. Besides Bitcoin, people are also getting interested in other digital currencies, especially during market crashes, showing a growing curiosity and reliance on crypto in trying times.
3. Vietnam
The cryptocurrency market in Vietnam is showing promising potential. In 2023, the revenue from this market is projected to hit $109.4 million. Moreover, the user base is anticipated to expand significantly, reaching 12.37 million by 2027. Vietnam has also made it to the list of top five countries with the highest trading volume on Binance, one of the leading global cryptocurrency exchanges.
The country’s Prime Minister called upon the State Bank of Vietnam (SBV) to undertake a cryptocurrency pilot project running from 2021 through 2023, highlighting the government’s interest in exploring the digital currency realm.
Furthermore, there are plans to set up a comprehensive digital financial platform by 2030, which is expected to bolster economic growth, macroeconomic stability, and financial security. This ambitious vision requires Vietnam to establish a favorable regulatory framework for cryptocurrencies, thereby transforming itself into a crypto hub.
4. United States
North America holds a big share in the global cryptocurrency market even with some hurdles over the last year. From July 2022 to June 2023, it had about $1.2 trillion in cryptocurrency transactions, making up nearly a quarter of all such transactions worldwide. However, some bad events like a major crypto platform failing and issues with banks led to fewer crypto activities, especially among big investors. One notable change was the decreased use of stablecoins, a type of cryptocurrency tied to real-world money like the US dollar, from February to June 2023.
On the other hand, the US is facing challenges in keeping a close watch on the stablecoin market as more activities are moving to services outside US control. Even though stablecoins are highly used, less oversight could be risky. US lawmakers are looking into new rules to make the crypto market safer and support its growth. There’s also been a drop in the use of decentralized finance (DeFi) services, which let people trade and manage assets. New laws and a proactive approach from regulators are seen as key to bringing back growth and ensuring safety in the crypto market in North America.
5. Ukraine
Despite the ongoing war between Russia and Ukraine, some positive changes have emerged. In Ukraine, people have become more interested in crypto, especially as many moved to other parts of Europe, where crypto rules are better. Also, a Ukrainian crypto company called Kuna moved to Lithuania and expanded its business there.
Even with less money, people in Eastern Europe are still using crypto for things like saving, donating, or sending money back home. As Ukraine gets more connected with Europe, it’s expected that people will use crypto more, especially if better rules are put in place to protect users.
6. Philippines
The play-to-earn game Axie Infinity became a hit in the Philippines, helping many people get familiar with cryptocurrencies during the tough economic times of the COVID-19 pandemic. This craze introduced many to digital wallets, setting the stage for more people to use cryptocurrencies. Now, as the hype around Axie Infinity cools down, there’s a push for more organized ways to grow crypto use in the Philippines.
The government and big companies are stepping up, with special zones for crypto companies and new crypto projects launching. The blend of government support, company projects, and a young tech-savvy population could help the Philippines become a notable player in the Asian crypto and blockchain field.
7. Indonesia
Indonesia climbed to the 7th spot in the 2023 global crypto adoption index, reflecting the nation’s growing crypto interest, particularly among lower-middle-income groups. The regulatory environment is becoming more crypto-friendly, with a notable switch in regulatory oversight. Despite a past ban on crypto payments, digital asset trading remained legal.
Plans for a national crypto exchange and a Central Bank Digital Currency (CBDC) launch by 2023 further highlight Indonesia’s progressive stance towards integrating digital assets into its financial ecosystem.
8. Pakistan
In Pakistan, rising prices and money-losing value have led people to buy cryptocurrencies, especially stablecoins, to keep their savings safe. Although trading cryptocurrencies is not allowed, many are using them as the usual ways to save money are not working well.
There’s a hope that if the government sets clear rules, more people can easily and cheaply buy cryptocurrencies to protect their money and perhaps help the economy. The real picture of how many people are using cryptocurrencies is unclear as many transactions are done privately, but it’s believed that these digital currencies are helping people and businesses manage in tough economic times.
9. Brazil
Brazil has a strong history with digital currencies, aligning more with richer areas like North America and Western Europe than nearby countries. Lately, there’s been a drop in big money transfers in crypto, but small and medium transactions remain steady. This hints at a possible comeback of larger transactions, keeping the market hopeful.
Unlike its neighbor Argentina, which leans towards stablecoins to escape money value loss, Brazil’s stable money situation sees more demand for Bitcoin and other digital currencies for long-term saving and growth. Despite recent slowdowns, Brazil’s crypto market holds a distinct, positive stance in Latin America, showing potential for future growth.
10. Thailand
Thailand ascended to the 10th spot on the Global Crypto Adoption Index, aligning itself alongside its Southeast Asian neighbors—Vietnam, the Philippines, and Indonesia—in the global ranking of crypto-embracing nations.
This ascension of Thailand, despite a minor slip from a higher spot, is reflective of a broader trend where lower middle-income nations are spearheading the global crypto adoption wave. The data also hinted at a substantial 8.9% of crypto commercial usage in Thailand, indicating a thriving crypto ecosystem within the nation.
Amidst this evolving landscape, Thailand’s crypto community is continually engaging in discussions and events, fostering a conducive environment for crypto enthusiasts and investors alike.
FAQ
What is the crypto adoption index?
The Global Crypto Adoption Index is a Chainalisys report that ranks countries based on their engagement with grassroots cryptocurrency adoption, considering transaction numbers, trade volumes, and public interest. It offers a snapshot of how nations are integrating digital currencies into their daily financial activities.
Which country is top in crypto adoption?
India leads the pack in grassroots crypto adoption in 2023, marking its dominance in the global crypto landscape. Following closely behind are Nigeria, Vietnam, the United States, and Ukraine, each showcasing unique trends and factors driving their robust engagement with digital currencies.
FINAL THOUGHTS
The 2023 Global Crypto Adoption Index shows that more people across different countries are using cryptocurrencies for better financial control and new investment opportunities. This trend is notable in Central & Southern Asia and Oceania, where six countries are leading in everyday crypto usage. India and Nigeria are big players in this field, with India’s growth driven by common people and Nigeria’s by economic challenges. Similarly, Vietnam and the US show promising growth in crypto usage, although the US faces some regulatory hurdles.
On the other hand, countries like Ukraine, the Philippines, Indonesia, Pakistan, Brazil, and Thailand show how crypto is becoming popular in different economic situations. For instance, in Pakistan, people use crypto to protect their savings during tough times, while in the Philippines and Thailand, there are efforts to grow the crypto scene with the help of government and businesses. These examples from around the world show that cryptocurrencies are slowly becoming a part of people’s daily financial lives, providing new solutions to old problems.