They say the best way to learn is by doing. When it comes to blockchain technology and digital currencies, Central & Southern Asia and Oceania (CSAO) is way out in front, a sneak peek of the 2023 ‘Global Crypto Adoption Index’ by Chainalysis shows.
Chainalysis releases this report annually, and this is its fourth year running. It looks at both on-chain and real-world data to measure the ‘grassroots’ adoption of blockchain technology and digital currencies.
Six of the top 10 countries are firmly in the CSAO region. In order, they are India, Nigeria, Vietnam, the United States, Ukraine, Philippines, Indonesia, Pakistan, Brazil, and Thailand.
The report acknowledges that worldwide adoption is down overall, but Lower Middle Income (LMI) countries, defined as those with GNI per capita of $1,086-$4,255, have recovered fastest.
“LMI countries are often on the rise, with dynamic, growing industries and populations,” the report says, acknowledging that if these countries are the future, this indicates that blockchain technology and digital currencies will play a significant role in it.
What does the Chainalysis annual report consider?
The report looks at both on-chain and real-world data in 154 countries, including:
- On-chain digital currency value received at centralized exchanges.
- On-chain retail value received at centralized exchanges.
- Peer-to-peer exchange trade volume.
- On-chain digital currency value received from DeFi protocols.
- On-chain retail value received from Defi protocols.
The subindexes measure countries’ usage of different services and are weighted for population size and purchasing power. The data is then put on a scale between 0-1, with one being the highest.
What does this say about blockchain technology and digital currencies?
While the full report (due soon) will delve into more detail about the exact nature of the data Chainalysis collected, we can safely assume that at least some of the transactions are related to digital currency speculation.
However, the Lower Middle Income countries mentioned are also dependent on remittances and do not typically have excellent payment systems (India being the exception to the latter point). A fair percentage of these transactions are likely linked to the usage of digital currencies for their intended purpose—peer-to-peer payments.
While the usage of digital currencies is likely down to a number of factors, including remittances, payments, hedging against inflation, gaming, and speculation, it all adds up to the same thing: lots of people in rapidly growing countries are using digital currencies and figuring out blockchain technology in the process.
As the Chainalysis report acknowledges, this suggests digital currencies and the blockchains they run on will be a big part of the future. It also indicates that the ‘West’ better get a move on and lead in terms of regulation and innovation if it wishes to keep up.
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