Crypto Adoption Jumps in Emerging Economies, Rises by 880% in Vietnam: Chainalysis
Cryptocurrency has continued to grow in leaps and bounds as several assets broke into all-time highs this year. This has led to an increase in adoption. While increased prices will definitely spur new adoption, the levels being seen so far are truly astronomical.
Everyone Loves Crypto in Vietnam
Earlier this week, blockchain analytics platform Chainalysis published its 2021 Global Crypto Adoption Index. The report showed adoption levels across different countries of the world, and the numbers reflected this year depict that the industry is moving even further into the mainstream.
The Chainalysis index reported on adoption levels for 154 countries of the world. The company’s analysis was based on three factors – on-chain retail cryptocurrency value transferred, on-chain cryptocurrency value received, and the trade volumes on peer-to-peer exchanges. All metrics were weighted by the country’s purchasing power parity (PPP) to get a better, more balanced view of adoption worldwide.
As the Index showed, the global adoption of cryptocurrencies jumped by 880 percent in the past year. Vietnam was the country with the highest levels of crypto adoption, with the company scoring high across all metrics. India came in a distant second, but the country had an exceptional score on p2p trading volumes. Third on the list was Pakistan, with strong performances across the board too.
The results mirror that of a recent study from Finder, which shows that Vietnam is the world’s leading market for cryptocurrency adoption. Finder’s survey took results from 42,000 people across 27 countries, showing that Vietnam had the highest crypto adoption rates with 41 percent. India and Indonesia came in second with 30 percent apiece.
Finder’s report explained that emerging economies are especially prone to crypto adoption because of their high remittance rates. Many of these countries have people in the diaspora who try to send money back home. With strict capital controls and regulations on FX in their local markets cryptocurrencies provide a simple and effective way of sending money in the dollar.
Peer-to-Peer to the Rescue
As Chainalysis’ report showed, the entire top 20 was made up of emerging economies. Names like Nigeria, Kenya, Columbia, Togo, and Argentina also featured in the top rankings.
Countries like Nigeria and India are especially high on the p2p trade volumes metric as their countries don’t especially have pro-crypto laws. Earlier this year, Nigeria’s central bank prevented commercial banks across the country from servicing crypto companies or accounts. This led to local exchanges like Quidax, BuyCoins, and more to immediately switch to p2p in order to allow customers to continue with their transactions.
In India, the Reserve Bank has repeatedly toyed with the idea of banning crypto entirely – even though it is looking towards building a central bank digital currency (CBDC). Even after the Reserve Bank’s ruling against banks servicing crypto companies was overturned, banks have been reluctant to embrace crypto. Thus, exchanges have had to use p2p as a workaround.