P2P transactions are driving crypto adoption in emerging markets like Vietnam and India
Chainalysis, the blockchain data analysis platform, in its latest report titled ‘The 2021 Global Crypto Adoption Index’ stated that worldwide adoption of cryptocurrencies has grown by over 880% over the last year, making crypto a truly global phenomenon. The report seeks to list countries with the highest adoption rate by studying grassroots cryptocurrency adoption across the world.
Vietnam tops the crypto adoption index followed by its other emerging market counterparts, India and Pakistan. Ukraine stands at fourth while Kenya is fifth on the index. The Global Crypto Adoption Index ranks nations based on on-chain value received, the on-chain retail value received and peer-to-peer (P2P) exchange trade values.
The data platform noticed three key trends that surfaced through the index.
With a 2,300% increase in global adoption from Q3 of 2019 to the end of Q2 of 2021, cryptocurrency adoption is skyrocketing, especially since the beginning of the pandemic. This has meant that more countries are turning to the crypto industry while those countries with an already-present crypto influence are seeing an increase in interest.
Research further showed that emerging markets look at cryptocurrency as a hedge against currency devaluation and to send and receive remittances. Developed markets across North America, Western Europe and East Asia on the other hand have seen an increase powered by institutional investments.
Secondly, huge transaction volumes of P2P exchanges have driven adoption in emerging markets, pushing them higher on the index. A greater share of the total P2P transactions is valued under $10,000 in these markets since their use case is essentially for remittance payments or personal and retail commercial transactions rather than those by traders and institutional investors.
Finally, the 2021 index saw a crucial drop in the position of both the USA and China. Previously ranked 6th and 4th respectively, the countries are currently placed at 8th and 13th. This can be mainly attributed to a decrease in P2P trade volume ranking weighted for the internet-using population, the report said. The divergence from their upward trendline began in June 2020 for both countries. This could be because of the increasing institutionalisation of crypto in the USA and government crackdowns on crypto industries in China.
The report concluded by stating that P2P exchanges will continue to drive adoption in the emerging markets while DeFi will be the big player in the developed markets.