By Manpreet Kaur
The rate of cryptocurrency adoption has jumped by 880 percent in the last year, with bitcoin being the most popular coin followed by Ripple and Ethereum.
The popularity of cryptocurrency is gaining pace, with people using it as a prefered investment option. Five countries – Vietnam, India, Pakistan, Ukraine and Kenya – have ranked the highest in cryptocurrency adoption, according to Chainalysis‘ 2021 Global Crypto Adoption Index.
The report, titled “Geography of Cryptocurrency”, compared the countries’ cryptocurrency adoption based on three main parameters – on-chain retail value transferred, cryptocurrency value received, and peer-to-peer exchange trade volume between June 2020 and June 2021.
The index ranked 154 countries to measure the level of cryptocurrency adoption and usage between July 2020 and June 2021, with every country being ranked between 0 and 1. The closer the score is to 1, the higher the rank.
| Country |
Rank |
| Vietnam |
1 |
| India |
0.37 |
| Pakistan |
0.36 |
| Ukraine |
0.29 |
| Kenya |
0.28 |
China and the US both dropped in the rankings, because peer-to-peer trading volume declined. Last year, China ranked fourth and the US sixth. This year, the US is eighth and China 13th.
“In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions,” Chainalysis said.
Although cryptocurrencies are not authorised in Vietnam, the country ranked first with 20% claiming to have purchased Bitcoin, according to a survey by US-based firm Finder.
“Remittance payments may have played a significant role in these numbers, with cryptocurrency an option for migrants who want to send money home and avoid exchange fees,” Chainalysis said.
India ranked second in cryptocurrency adoption, with a user base of 7.3 million and more than $21.8 billion in trading volumes this year.
India’s “huge expatriate population” makes it the world’s number one remittance recipient in the crypto space, Finder said. India had 18 million people from the country living outside their homeland last year, the largest expatriate population in the world, according to a report by the United Nations released in January.
Smaller towns are leading in adopting cryptocurrency. Last week, WazirX, the largest crypto exchange in the country by trading volume, said that it had seen more than 2.5% growth in user sign-ups from tier II and tier III cities in India.
The interest is mostly driven by referrals, said Naimish Sanghvi, who has been running crypto information platform Coin Crunch since 2018.
Pakistan, which came in third, has seen a recent boom in trading and mining cryptocurrency, with interest picking up on social media and transactions on online exchanges.
While cryptocurrency is not illegal in Pakistan, the global money laundering watchdog Financial Action Task Force (FATF) has asked the government to regulate the industry. FATF monitors terror financing and money laundering, and Pakistan is on its grey list.
“Half the members have no clue what it was and didn’t even want to understand it,” Ali Farid Khwaja, chairman of KASB Securities, a stock brokerage in Karachi told reporters. “But the good thing is someone set up this committee. The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation,” he added.
Ukraine, ranked fourth, is the latest country to legalise cryptocurrency. The daily turnover of virtual assets in the country stands at $37,000, according to the government.
By 2022, the country plans to open a cryptocurrency market to businesses and investors, according to the Kyiv Post. Top state officials have also been touting their crypto street cred to investors and venture capital funds in Silicon Valley.
Kenya, ranked fifth, is well ahead of the other 154 countries surveyed in terms of peer to peer to exchange trade. Kenyans are directly trading cryptocurrencies with each other more than elsewhere in the world.
The index has also made adjustments for purchasing power parity per capita and the internet-using population.
Residents of other African countries are also jumping into the opportunity to cushion remittances and cross-border businesses from costly transfer fees and the risks of weakening currencies.