The rate of cryptocurrency adoption worldwide has increased by 880 percent

The rate of cryptocurrency adoption has increased by 880 percent globally over the past year, with Vietnam, India, Pakistan, and other emerging economies leading the way, according to blockchain analytics firm Chainalysis. 

The overview of the global cryptocurrency adoption index for 2021, titled 'Geography of Cryptocurrency', compares cryptocurrency adoption rates worldwide based on three main metrics: received on-chain cryptocurrency value, transferred on-chain retail value, and peer-to-peer trading volume between June 2020 and June 2021. According to the data, Vietnam has so far led the field, achieving a total index score of 1. At a certain distance were India (0.37), Pakistan (0.36), Ukraine (0.29), and Kenya (0.28).

This marks a significant change from last year’s global cryptocurrency adoption index, which placed Ukraine in the lead with a score of 1. Vietnam was in a distant tenth place last year, scoring 0.443. While Kenya ranked fifth in last year’s index with a score of 0.645, India and Pakistan are new entrants in the top 10.

Emerging economies lead cryptocurrency adoption

Researchers at Chainalysis highlighted that while cryptocurrency adoption surged globally over the past year, it was particularly evident in rising economies. This can largely be attributed to the high volume of transactions on local peer-to-peer platforms when purchasing purchasing power parity per capita, taking into account the total number of internet users.

– Our conversations with experts in those countries revealed that many residents use P2P cryptocurrency exchanges as their primary ramp, often because they do not have access to centralized exchanges. Knowing this, it is not surprising that regions with many emerging markets make up a large portion of traffic on P2P service websites – the researchers noted.

The report emphasizes that many emerging economies are exposed to massive devaluation of their native currencies, prompting people to seek alternative means to store their assets. Additionally, digital assets are easier to transfer internationally, which is particularly important as local governments may restrict the amount of national currency that can be sent abroad. 

Meanwhile, economic powers such as the USA and China have fallen to lower positions in the index compared to 2020. Specifically, the USA is currently ranked 8th (6th in 2020), while China is in 13th place (4th in 2020). Researchers pointed out that the main reason for the decline in the index for both countries is that their ranking in P2P trading volume weighted for internet usage has dramatically decreased. China has dropped from 53rd place on this list to 155th, while the USA has fallen from 16th to 109th place.

In the case of China, this is not surprising, especially considering the massive crackdown on bitcoin in recent months. Nevertheless, the global rate of cryptocurrency adoption and its geographical spread over the past year have shown that cryptocurrency is indeed a global phenomenon, concluded Chainalysis.

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