According to a report from blockchain data platform Chainalysis, Central and Southern Asia and Oceania (CSAO) nations are again leading the globe in terms of grassroots cryptocurrency usage.
Cryptocurrencies are defined as any type of digital or virtual currency that employs encryption to safeguard transactions. They lack a regulating body and instead rely on a decentralized system to record transactions and issue new units.
In its “Geography of Cryptocurrency” report for this year, Chainalysis bared that Vietnam and the Philippines have again led the ratings, duplicating their feat for the second straight year now.
Joining Vietnam and the Philippines, which rank first and second, respectively, at the top of the 2022 list among Asian countries are India (4th), Pakistan (6th), Thailand (8th), Nepal (16th), and Indonesia (20th) — nations classified as “lower middle income” by the World Bank.
In terms of unweighted crypto activity, India continues to lead CSAO nations, receiving $172 billion in terms of cryptocurrency value obtained from the period July 2021 through June of this year.
Thailand, Vietnam, Australia, and Singapore follow close behind, with each country receiving more than $100 billion each. Less engaged with cryptocurrencies, however, are Central Asian countries like Uzbekistan and Oceanian island nations like the Maldives.
Economies with a weak currency, receiving less cash across borders are tops
In general, according to Chainalysis’ report, countries that topped the list have economies where the national currency is weak and where services for moving or receiving cash across borders are few.
“Users in these nations rely on cryptocurrencies to transmit remittances, safeguard their funds in times of fiat currency instability, and satisfy other financial demands particular to their economy,” the report added.
Apart from these indicators, the region’s growth is also driven by play-to-earn games.
Axie Infinity, a digital pet game in which players raise, trade, and fight virtual creatures for in-game assets became extremely popular, particularly in the Philippines, where some players earned significantly more than the country’s average salary.
The most successful gamers utilized their gaming gains to pay for their children’s school fees and even to purchase real estate or property.
However, Axie Infinity’s popularity plummeted in March after North Korean hackers stole $625 million in assets.
According to the statistics, the number of active players in September was less than one-third of what it was during the game’s high in January.
Aside from that, in China, decentralized cryptocurrencies do not fit the ruling party’s strategy to control its people.
Last year, the government launched a crackdown on crypto-mining, which is an energy-intensive process aimed at generating new coins in cryptocurrencies.
While China now focuses on developing its official digital coin that will harness the advantages of the technology on its own terms, the move has opened up the market to other competitors in the region.
Debt-laden Laos also wanted to profit from digital currency mining and has since authorized the mining and trading of cryptocurrencies.
To date, their success in the sector still remains to be seen.