In which countries are cryptocurrencies most widely used?

Chainalysis unveils the ranking of countries where cryptocurrencies are most used

This August 18, 2021, Chainalysis, the renowned blockchain analytics firm, released the 2021 Global Cryptocurrency Adoption Index. This annual ranking reveals in which countries cryptocurrencies are most widely used.

“Cryptocurrency adoption has exploded over the past 12 months, and the variation in contributing countries shows that this is a truly global phenomenon,” Chainalysis explains.

In its report, Chainalysis claims to have recorded an 881% increase in the adoption rate of digital currencies worldwide between Q2 2020 and Q2 2021. This period was marked by the kick-off of the bull run. During this bull run, Bitcoin (BTC) approached $65,000, dragging most altcoins in its wake.

At the same time, criminal activity related to cryptocurrencies has dropped significantly. According to a Chainalysis report published in January, transactions involving illegal activity now account for only 0.34% of digital currency trading. Despite the rise of ransomware, illicit and fraudulent cryptocurrency transactions are dwindling.

To develop its index, the analytics company looked at a total of 154 nations. In the section dedicated to the methodology, Chainalysis explains that it focused on the following three criteria: the value of cryptocurrencies exchanged by residents on the blockchain, the value of “retail” transfers on the blockchain (only exchanges below $100,000), and transaction volumes on peer-to-peer platforms, such as Paxful or LocalBitcoins.

With this index, Chainalysis’ goal is to highlight the countries where cryptocurrency is most adopted by ordinary people.” De facto, the ranking does not take into account transactions made by companies and institutional investors.

We focused on use cases related to transactions and individual savings, rather than trading and speculation,” Chainalysis details in its annual report.

Also read: finance professionals believe cryptocurrencies will replace fiat currencies within 10 years

Vietnam, India and Pakistan have massively adopted cryptocurrencies

<img src=”https://cryptoast.fr/wp-content/uploads/2021/08/pays-utilisent-cryptomonnaies.jpg 1011w, https://cryptoast.fr/wp-content/uploads/2021/08/pays-utilisent-cryptomonnaies-300×233.jpg 300w, https://cryptoast.fr/wp-content/uploads/2021/08/pays-utilisent-cryptomonnaies-768×596.jpg 768w” alt=”countries use cryptocurrencies” width=”1011″ height=”784″ />

Topping the list is Vietnam. As a reminder, the Southeast Asian country has nevertheless banned the use of cryptocurrencies as a means of payment since 2017. In fact, the State Bank has refused to provide a license to exchange platforms operating in the territory.

India occupies the second position in the ranking. The Indian government is openly hostile to digital currencies. India regularly makes threats against investors without ever putting any legislation in place.

In third place is Pakistan. The Islamic Republic has never imposed a clear legislative framework regarding digital currencies, but the State Bank of Pakistan formally bans cryptocurrency trading.

According to Chainalysis, the popularity of cryptocurrencies in emerging countries is due to the devaluation of the national currency. In many countries hit by the economic crisis, Bitcoin has indeed emerged as a safe haven, just like gold or real estate. Unlike fiat currencies issued by central banks, the mother of all cryptocurrencies is immune to inflation.

In emerging markets, many are turning to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances and conduct business transactions,” Chainalysis details.

Within emerging markets, residents are using P2P platforms as an « platforms as an “on-ramp”to digital assets. These platforms are particularly popular with individuals in countries such as Kenya, Nigeria, Vietnam and Venezuela because « they don’t have access to centralized exchange platforms, such as Coinbase or Binance. These allow people to buy cryptocurrencies from individuals.

Finally, Chainalysis highlights the plummeting of China and the United States in the rankings. China, which was still in fourth place last year, has fallen to 13th in the index following the authorities’ attempts to crack down on crypto-assets.

For its part, the country of Uncle Sam has dropped from sixth to eighth place due to a decrease in volumes traded on P2P exchanges. To explain this decline, Chainalysis points to « the increasing professionalization and institutionalization of cryptocurrency trading in the United States.

Also read: Chainalysis reaches $4.2bn valuation after $100m fundraising

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About the author: Florian Bayard

In which countries are cryptocurrencies most widely used?