Chainalysis Research Points to Central and Southern Asia as Crypto’s Next Big Thing

The global crypto adoption is down, but there’s more to the story.

Lower middle-income (LMI) countries, for one, have demonstrated an extremely promising crypto adoption trend. This cohort of countries constitutes 40% of the world’s population. Hence, if they are the future, they could be a big part of the crypto future, according to Chainalysis’ data.

In fact, Central & Southern Asia and Oceania (CSAO) is slowly shaping the future of crypto, with India in the lead.

India Remains Top Crypto Market

According to Chainalysis’ fourth annual Chainalysis Global Crypto Adoption Index, shared with CryptoPotato, India is by far the biggest CSAO cryptocurrency market and leads the world in grassroots adoption as measured by its Global Crypto Adoption Index.

India has even emerged as the second-largest crypto market in the world by raw estimated transaction volume, surpassing several wealthier nations in the process despite the challenging regulatory and tax environment.

The blockchain intelligence firm also found that India’s cryptocurrency usage spans several different forms of activity, as the country ranks in the top ten in usage for cryptocurrency services in a varied set of categories such as DEX, centralized exchange, lending protocol, token smart contract, and NFT protocol.

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

Global Adoption Down But That’s Not All

Although there has been a noticeable rebound from the lows experienced in late 2022, when FTX collapsed, grassroots adoption of cryptocurrency remains significantly below its historical peak.

However, this doesn’t apply universally.

CSAO has been outperforming other regions in crypto adoption when 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.

DeFi has significantly grown in the region as well, accounting for 55.8% of regional transaction volume between July 2022 and June 2023, compared to 35.2% in the previous year. The same goes for institutional adoption of cryptocurrency in CSAO, 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.”

Popular play-to-earn games such as Axie Infinity have captured the imagination of the young, tech-savvy population in the Philippines, which provided entertainment and a way to earn extra cash. However, it was the need for wealth preservation amidst high inflation and currency devaluation that drove many Pakistanis to turn to crypto, especially stablecoins such as USDT.