The spread of crypto in Asia
In a report on the health of the crypto and blockchain world in Asia, Chainalysis goes into detail and finds that the growth trend knows no rest.
The trend of crypto adoption in Asia
CSAO, which includes Central and South Asia and Oceania, represents the third largest cryptocurrency market.
Investors in CSAO countries have gained $932 billion in cryptocurrency value from July 2021 to June 2022.
Seven of the top twenty countries in the index that defines the prevalence of cryptocurrencies on the planet are part of CSAO and they are Vietnam, which ranks first, closely followed by the Philippines, India which gets fourth position, Pakistan sixth and Thailand eighth while at the bottom we find Nepal sixteenth and Indonesia the back end of this small club of performing countries.
The unweighted crypto activity sees India in the lead, which is confirmed for the second year in a row at the top spot and gets an impressive 172 billion dollars in cryptocurrency value from July 2021 to June 2022, while for example Thailand, Vietnam, Australia and Singapore stand at above 100 billion dollars Each.
NFTs lead this process of opening up to this world with 58% of searches which leads back to IP addresses associated with the topic in the second quarter of 2022 and 21% involve blockchain games to make money.
More NFT game elements, such as Axie Pet in Axie Infinity and sneakers in STEPrepresents tradable assets on MagicEden and OpenSea, highlighting high correlation and mixing between platforms and NFTs themselves.
According to Chainalysis, while NFTs take absolute dominance in Asia, the second largest share in terms of importance and volume is represented by video games and blockchain entertainment in general.
Polygon and Immutable X are based in India and Australia, while Axie Infinity and STEPN, the two largest play-to-earn games, are operated in Vietnam and Australia respectively.
Liminal (Singapore’s portfolio infrastructure provider) Senior Vice President of Operations and Strategy Manan Vora said:
“The FSO crash played an important role in shaking confidence in the cryptocurrency market. When one of the top ten coins goes to zero, it becomes very difficult to convince people who have just entered the market to stay in the market. These are the users you can lose forever.”
Vietnam ranked first among Southeast Asian countries
As we scratch the surface, we find that it leads crypto Adoption is Vietnam, which ranked 1st, immediately followed by the Philippines, which rose from 15th to 2nd in just one year.
Vietnam and the Philippines are also awash with similar growth drivers such as play-to-earn (P2E) games and money transfers, with 25% of Filipinos and 23% of Vietnamese having played a pay-to-earn game at least once, and, there was a phase when this percentage rose so high that it made up 40% of Axie Infinity’s player base.
Money, reports Chainalysis, accounts for 5% and 9.6% of the respective gross domestic products of Vietnam and the Philippines.
On the subject, Man Vora chimed in and said:
“It makes a lot of sense. Why pay 3% to a bank broker and wait two days for the funds to reach them when USDT / USDC can reach them in a minute, with almost zero fees?”
Blockchain-based payment service providers are beginning to disrupt traditional intermediaries (Pakistan, India and Bangladesh each have more than $20 billion deployed in remittances).
In CSAO countries, value transfers are usually done with stablecoins (mostly ETH and WETH) so that the value transferred does not change upon transfer.
However, this monstrous expansion is held back (as it is in China) by strict crypto regulations, especially in countries like India and Pakistan.
On April 1 this year, the Indian government increased the tax on all cryptocurrency gains by 30%, with no way for users to recoup their losses; to this, on July 1, the authorities also added a 1% transaction fee at source (TDS).
“This has led to a huge brain drain,” said Vora: “first in Singapore and now in Dubai. … because even though your business is market-making, it is now effectively treated as a lottery business.”
Vikram RangalaThe CEO of ZebPay, an Indian cryptocurrency exchange, stepped in to shed light on the issue:
“From the conversations my colleagues and I have had, the people in the Indian government, including MPs, are not anti-crypto per se. Some are very pro-crypto. But they are concerned that their constituents are trading a volatile asset without sufficient information. A 25 year old saving to get married or provide for his family could exchange a few meme coins and be blown away. No public official can be seen supporting something so risky for most people. The rich can survive such losses, but a cleaner, farmer or rickshaw driver cannot India has dozens of [crypto] projects that work to establish property rights, access tickets and passports, help rural artisans earn money, while giving token holders the opportunity to “skydive with a movie star in Dubai” and more.
The relationship between Pakistan and cryptocurrencies
Following India’s footsteps, Pakistan’s central bank and government have recommended a ban on cryptocurrencies and formed three sub-committees to discuss the matter further and keep an eye on the phenomenon while giving hope for a resounding turnaround in crypto.
Pakistan is also in a difficult situation as it has been on the Financial Action Task Force (FATF) gray list since 2018, and is ineligible for international financial assistance leading the country’s government to consider this asset as an option to bypass the obstructionism of the international community .
The Governor of the State Bank of Pakistan (SBP), Reza Baqirstated that:
“The potential risks associated with cryptocurrencies” far outweigh the benefits. The expansion of the shadow economy and capital flight are key concerns.”
Vikram Rangalaon the other hand, on the topic of opening for digital currencies said.
“After seeing Venezuela and Argentina, I think anyone who is in a country where things are not so stable is starting to see cryptocurrency as an opportunity.”
