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India, Nigeria Hold Top Spots in 2023 Crypto Adoption

By Jinia11/22/2023


There is no denying that the crypto space has been struggling in what seems to be a prolonged bear market since the time FTX imploded. 

Various projects have since collapsed by the wayside, casting a dark cloud of gloom across the entire crypto space. However, a recent report from Chainalysis seems to present a glimmer of hope. 

According to the report, “while there’s been a marked recovery [in terms of] grassroots adoption of crypto, that isn’t true everywhere.”

The report highlights how a segment of countries, specifically lower-middle-income countries, are seeing a much stronger recovery than others around the globe.

Shifting Tides of Crypto Adoption

The report, termed “The 2023 Global Crypto Adoption Index”, presents a burgeoning picture of digital asset proliferation, with India, Nigeria, and Vietnam securing the leading positions in a ranking traditionally dominated by wealthier nations.

The report offers a fascinating look beyond mere transaction volumes, seeking to understand where average, everyday individuals are integrating cryptocurrency into their financial activities. 

It suggests that the epicentre of grassroots crypto adoption is shifting towards developing economies, where smaller, more frequent transactions are becoming the norm.

The comprehensive study scrutinizes a range of variables to provide a balanced perspective on global crypto adoption. 

Crypto Adoption in India

The trajectory of cryptocurrency adoption in India is a tale of contrasts, fraught with regulatory vacillations, burgeoning interest from the populace, and a technology sector that is both eager and reticent to embrace digital currencies. 

India’s vast economy, marked by a youthful demographic, widespread tech-savvy, and a robust digital infrastructure, presents fertile ground for crypto adoption. Therefore, it’s no surprise, based on this Chainalysis report, that India has emerged as the frontrunner, bolstering its status as a hotbed for digital asset activity. 

With a significant volume of crypto transactions through centralized exchanges, the South Asian giant leads the index, reflecting the robust engagement of its populace with cryptocurrency. Its top ranking in both centralized service value and retail centralized service value speaks volumes about the growing embrace of crypto in everyday commerce and savings.

At the grassroots, Indian investors and tech enthusiasts have shown a voracious appetite for cryptocurrencies. The allure of high returns and the democratization of finance have resonated with a population that is increasingly financially literate and entrepreneurial. This has been bolstered by a burgeoning middle class and widespread internet penetration, leading to a digital finance revolution that crypto assets are well-positioned to capitalize on. The country has witnessed a surge in crypto trading volumes, with Indian cryptocurrency exchanges experiencing exponential growth. The Indian youth, in particular, are digital natives comfortable with the notion of virtual currencies, and their enthusiasm has been a driving force behind the adoption.

Nigeria Stands With Crypto 

Following India, Nigeria stands tall in the index, showcasing how peer-to-peer (P2P) exchanges have become a lifeline for its citizens. 

Despite infrastructural and economic challenges, Nigeria’s P2P trade volume is unparalleled, reflecting an innovative spirit that leverages digital currencies for practical financial management.

The state of crypto adoption in Nigeria is closely linked to the recent devaluation of their national fiat currency, the naira. With the naira dropping as much as 36% on the official market, Nigerians are increasingly turning to cryptocurrencies as a means of preserving their wealth and conducting financial transactions.

The devaluation of the naira has created a sense of uncertainty and instability in Nigeria’s economy. Foreign currency shortages have plagued the country for decades, making it difficult for investors to withdraw money from the largest economy in Africa. The removal of trading restrictions on the official market has resulted in the naira reaching a record low of 750 naira to the dollar, which is equivalent to the black market rate. 

The devaluation of the naira and the subsequent economic reforms have contributed to the increasing grassroots adoption of cryptocurrencies in Nigeria. Cryptocurrencies, such as Bitcoin and Ethereum, offer Nigerians an alternative to the devalued national currency. They provide a decentralized and secure means of conducting financial transactions without the need for intermediaries or government control. 

Vietnam Picks Up the Trend

Vietnam’s third-place position reaffirms the trend, with its high ranking in both DeFi (decentralized finance) and P2P exchange volume. It’s a testament to the Vietnamese people’s growing sophistication in utilizing advanced financial protocols and services in the crypto domain.

The report elucidates that these countries, despite not having the colossal transaction volumes seen in wealthier nations, are witnessing a surge in adoption rates.

Power of Microtransactions 

This shift is powered by microtransactions, a critical component in the index’s methodology, which accentuates the adoption by ordinary individuals over institutional players.

“The pivot towards developing nations in the crypto space is stark,” the report indicates. 

“In regions like Central and Southern Asia and Oceania, DeFi and P2P platforms have become particularly impactful, facilitating a kind of financial inclusion that traditional banking has often failed to provide.”

Globally, while the report concedes a downturn in crypto adoption following market upheavals like the FTX debacle, it highlights a resilient recovery in lower-middle-income countries. 

This category, as defined by the World Bank, includes the majority of the nations leading the index. The resilience of these countries is noteworthy and may signal a durable change in the digital asset landscape.

While presenting these insights, the Chainalysis team underpins the broader significance: Countries with dynamic, growing industries and populations—often characterized by a large portion of the world’s demographic—are the ones championing the crypto cause. 

This, according to the report, suggests a bright future for cryptocurrency as it becomes an integral part of emerging economies’ growth stories.

Wrap Up

As high-income nations continue to see institutional crypto adoption, the contrasting, robust grassroots-level adoption in developing countries provides a dual narrative of a world increasingly turning digital. 

The burgeoning role of cryptocurrencies in everyday transactions and savings in these nations heralds not just a financial revolution but a socio-economic transformation with digital currencies at its heart.

This picture painted by the 2023 Global Crypto Adoption Index is not just about numbers and rankings—it is about the democratization of finance and the inclusion of the underbanked or unbanked populations into the global economy. 

As such, the future of crypto adoption appears not only promising but pivotal to the financial empowerment of individuals across diverse economic landscapes.

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Jinia is a fintech writer focused on the cryptocurrency market and passionate about blockchain technology. With years of experience, she contributes to some of the most renowned crypto publications such as Cointelegraph, Coinmarketcap and others. She also has experience writing about the iGaming industry.

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