Chainalysis Research Identifies Central and Southern Asia as the Next Frontier for Cryptocurrency

The Future of Crypto Adoption Lies in Lower Middle-Income Countries

A recent report by Chainalysis reveals that while global crypto adoption has decreased, lower middle-income (LMI) countries are showing a promising trend in adopting cryptocurrencies. These countries, which make up 40% of the world’s population, could play a significant role in shaping the future of crypto.

Among the LMI countries, Central & Southern Asia and Oceania (CSAO) are emerging as key players in the crypto space, with India leading the way.

India Takes the Lead in Crypto Adoption

According to Chainalysis’ Global Crypto Adoption Index, India is currently the largest cryptocurrency market in the CSAO region and leads the world in grassroots adoption. Despite facing challenges in terms of regulations and taxes, India has surpassed wealthier nations to become the second-largest crypto market globally in terms of transaction volume.

Chainalysis also found that India’s cryptocurrency usage extends across various categories, including decentralized exchanges (DEX), centralized exchanges, lending protocols, token smart contracts, and NFT protocols.

“As long as that demand is there, crypto will always have a place in the world’s second-largest country.”

CSAO Outperforms Other Regions in Crypto Adoption

While overall crypto adoption has seen a decline, CSAO countries have been outperforming other regions in terms of crypto adoption, considering factors like purchasing power and population. Six out of the top ten countries in Chainalysis’ Global Crypto Adoption Index are from CSAO, including India, Vietnam, the Philippines, Indonesia, Pakistan, and Thailand.

The region has also witnessed significant growth in decentralized finance (DeFi), accounting for 55.8% of the regional transaction volume between July 2022 and June 2023. Institutional adoption of cryptocurrency in CSAO has also increased, with 68.8% of the total transaction volume involving transfers valued at $1 million or more.

“Central & Southern Asia and Oceania (CSAO) hosts what may be the world’s most dynamic and fascinating cryptocurrency market. Measured in raw transaction volume, CSAO is the third-largest crypto market we study, barely trailing North America and Central, Northern & Western Europe (CNWE), and accounting for just under 20% of global activity.”

In the Philippines, popular play-to-earn games like Axie Infinity have attracted the attention of the young and tech-savvy population, providing both entertainment and an opportunity to earn extra income. In Pakistan, the need for wealth preservation amid high inflation and currency devaluation has driven many individuals to turn to crypto, particularly stablecoins like USDT.