Emerging Markets Take The Lead In Global Crypto Adoption Index

Jesper Leong

August 18, 2021
4 min read
Cryptocurrency DeFi Payments Reports

The report shows an eightfold increase in global cryptocurrency adoption, with emerging markets overtaking China and the United States.

Emerging markets like Vietnam, India, and Pakistan are taking the lead in the push towards global cryptocurrency adoption in the 2021 Global Crypto Adoption Index by Chainalysis.

The latest report by the blockchain data platform aims to rank countries by their overall levels of cryptocurrency adoption. To measure daily transaction volumes by citizens in each country, Chainalysis conducted the study using the following three metrics based on purchasing power parity (PPP) per capita:

On-chain cryptocurrency value received

A measure of total cryptocurrency received by a country and the weight of the on-chain value, or a measure of the country’s wealth per resident.

On-chain retail value transferred

This metric measures the amount of cryptocurrency moved in retail transactions by individual cryptocurrency users under $10,000 USD worth of purchase, based on how much cryptocurrency they’re transacting compared to the wealth of the average person.

Peer-to-peer (P2P) exchange trade volume

Countries are ranked by their total Peer-to-Peer (P2P) trade volume with data from LocalBitcoins and Paxful, two of the largest P2P platforms.

Countries with emerging markets took the top 10 spots with the exception of the United States in 8^th place. Vietnam and India emerged as the top adopters with 1^st and 2^nd place, and African countries like Kenya and Nigeria with a growing crypto user base took 5^th and 6^th place. Asian neighbours such as Thailand, China and Philippines ranked 12^th, 13^th and 15^th respectively.

Vietnam ranks highest in Southeast Asia for Cryptocurrency Ownership

Key trends from Chainalysis’ index shows global cryptocurrency adoption has risen almost 881% in the last year alone. The adoption index stood at 2.5 in Q2 2020, and now stands at 24 by the end of Q2 2021.

A graph of web traffic to peer-to-peer platforms from each region

The increase in adoption is strongest in emerging markets thanks to easy access of P2P cryptocurrency platforms. Web traffic to P2P platforms clocked at 30% on average for Latin America, Central Asia, and South Asia, while North America and Africa trailed behind with 10%-15%.

Crypto adoption in developed economies like North America, Western Europe, and East Asia are largely powered by institutional investments, but countries with emerging markets are utilising cryptocurrencies for daily uses such as remitting money with cheaper fees, carrying out business transactions, or hedge against currency inflation.

Peer-to-peer payments can be made on websites or mobile applications

P2P platforms websites and mobile applications are the go-to for users in emerging markets due to a lack of access to traditional finance institutions and centralised exchanges. According to Global Finance Magazine, more than 1.6 billion adults have no financial access in countries such as Kenya and the Philippines, which coincidentally are one of the top few adopters for P2P cryptocurrency payments.

On the other hand, the United States and China have seen a dramatic decrease in P2P payments. While China and the U.S. previously ranked 4^th and 6^th respectively in 2020, they currently rank 13^th and 8^th respectively on the list in 2021. This could be a result of cryptocurrency transactions becoming institutionalised in banks and exchanges in the U.S., while ongoing cryptocurrency crackdowns in China may have impacted transaction volumes in the country.

With the changing dynamics to cryptocurrency adoption, there is no doubt that emerging markets will be next to ride the crypto wave with peer-to-peer exchanges. Yet as cryptocurrency regulations start to catch up around the world, transactions could very well take the route of U.S. and China with increasing institutionalisation and centralised control.