Summary:
- APAC countries account for 6 of the top 10 worldwide in terms of crypto adoption, with Vietnam ranking #1 and the Philippines ranking #2, according to a new report from Chainalysis.
- The U.S. moved up to #5 in crypto adoption, but lags behind when it comes to regulation.
- Despite a ban on crypto trading and mining, China ranks #10 for crypto adoption and was “especially strong” in its use of centralized exchanges.
- Crypto Council for Innovation briefed nearly 1,000 people from 90 countries on CBDCs and stablecoins in Asia.
As the crypto industry has grown, Asia has become a leader in crypto adoption percentages, according to the Chainalysis 2022 Global Crypto Adoption Index (H/T Forkast). Countries in the Asia Pacific (APAC) region account for 6 of the top 10 countries in terms of crypto adoption – and despite its ban on crypto mining and trading, China leads the rank sitting at number 10 of the Index, which has interesting implications for the effectiveness of the ban.
Ahead of our webinar Wednesday with Forkast on CBDCs and stablecoins in APAC, our Chart of the Week looks at the growth of crypto worldwide and specifically in Asia, and what it means for the U.S.
A quick refresher on stablecoins and CBDCs
The foundation of crypto is fundamentally global. As we are still in the “early adoption” phase, the largest use of stablecoins has often been as a way to enter or exit a trade on a crypto exchange, so a trader moves back to stability without converting digital assets into fiat. But the ultimate goal for stablecoins is to shift to payments, which will save users and processors on transaction fees and reduce intermediaries. Read the explainer on stablecoins.
A Central Bank Digital Currency (CBDC) is a specific type of centralized stablecoin that is issued by a central bank of a government – essentially, digitized fiat. CBDCs are of significant interest to governments as a way to make transactions more efficient. Further, the transparency on blockchain makes CBDCs completely traceable. Check out this CBDC tracker project hosted by the Atlantic Council.
Over 90% of countries already are working on them, as we explained in our testimony last week to the Senate Agriculture Committee. The U.S. has lagged behind the world in crypto regulation and is one of just three countries in the G20 still “researching” CBDCs.
Crypto growth and APAC
As crypto adoption grows worldwide, APAC countries account for six of the top 10 in terms of adoption, according to the new Chainalysis index.
The top two countries in crypto adoption are Vietnam (for the second year) and the Philippines. One key use is Play to Earn (P2E) games, such as Axie Infinity, based in Ho Chi Minh City. In these lower middle-income countries, P2E games can mean real income.
India ranks #4, and the notable Ethereum Layer 2 platform, Polygon, using the cryptocurrency of MATIC, was founded by Indian entrepreneurs.
The U.S. moved up to #5, joined by the UK as the only developed countries to make the top 20.
China, ranking #10, was “especially strong” in its use of centralized exchanges this year, per the report – despite a ban on all crypto mining and trading in 2021.
Specifically, China is leading the way for a CBDC with the Digital Yuan. They are staying on top of innovation to make money more efficient for over 1.4 billion people in China, but their ultimate goal is related to foreign policy, as the U.S. Dollar fights to maintain its status as the world reserve currency.
As the report finds, “users in lower middle and upper middle income countries often rely on cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and fulfill other financial needs unique to their economies. These countries also tend to lean on Bitcoin and stablecoins more than other countries.”
Even during a bear market, the adoption of crypto continues to grow, especially in APAC and developing countries. The use of stablecoins and CBDCs will continue to grow worldwide in the years to come, even in countries where crypto regulations may be more strict.
All the more reason why the U.S. needs to take action on regulation – before the rest of the world leaves us behind.
Please join the Crypto Council for Innovation on Wednesday, September 21, at 9pm EST, for a webinar in partnership with Forkast on CBDCs & Stablecoins: The Asia Perspective. Click here to register. Update: Watch the briefing here.
