Cryptocurrencies have made groundbreaking advances in the world of digital assets since Bitcoin was released in 2009. Over the years, various altcoins have sprung left and right all around the world with hopes of dominating the market.
After a decade, cryptocurrencies have begun breaking into the mainstream with major corporations like Tesla, PayPal, and Visa Inc. adopting crypto payments into their systems. More than these big companies, many people overlook the grassroots crypto adoption in countries that have also helped put digital currencies into the spotlight.
Recently, Chainalysis, a company that analyses the blockchain released their research about the Global Crypto Adoption Index. In this report, they ranked the top 10 countries that use cryptocurrencies the most in terms of grassroots activities.
The table below illustrates the data collected by Chainalysis:
|Rank||Country||Score||The rank of individually weighted metrix|
|On-chain value received||On-chain retail value received||Number of on-chain deposits||P2P exchange trade volume|
|6||United States of America||0.627||5||6||39||16|
The data is categorized into four metrics weighted by the purchasing power parity (PPP) per capita. These metrics include on-chain value received, on-chain retail value received, number of on-chain crypto deposits, and peer-to-peer exchange trade volume.
Developing countries like Ukraine led the way in cryptocurrency adoption, according to Chainalysis. This is largely due to its tech-savvy population. The country has been a hotspot for science and engineering developments that started during the Soviet Union.
Despite this, the country’s government did not initially support digital assets. In 2017, the financial regulators of Ukraine said in a statement that the state could not classify cryptocurrencies as money and a means of payment. However, the government changed its stance the following year when they announced a plan to create a regulatory framework to monitor cryptocurrency activities in the country.
Claiming the second spot in the list is the Russian Federation. The country also accounts for 6.9% of the world’s crypto mining activities. In January 2021, the State Duma along with the Parliament’s lower house signed a law to recognize digital assets as properties that can be mined and traded.
Venezuela landed the third spot on the list despite the country’s 3,000% inflation rate. For seven years, the country has suffered a continuous recession that contributed to the financial unrest of Venezuelans. This influenced the citizens to turn to cryptocurrencies rather than their local fiat currency for daily transactions.
Additionally, with the deregulated nature of cryptocurrencies, it’s easier for Venezuelans to preserve their savings in cryptocurrency than investing in banks.
Despite being one of the most active countries in crypto mining, China landed at the fourth spot in the Chainalysis list. Historically, the country is the heart of the crypto mining industry accounting for 65.08% of the world’s activity.
Although crypto trading is rampant among Chinese investors, the government has taken measures to regulate crypto activities in the country. In 2017, the Chinese government imposed a national ban on initial coin offerings (ICO) to protect its investors from fraudulent activities.
Kenya landed fifth on the list after its citizens embraced digital assets because of the economic turmoil in the country.
Although Kenya doesn’t have a history of banning cryptocurrencies, its Central Bank issued a public notice in 2015 for the public to heed caution when using digital assets. The state claims that cryptocurrencies cannot be considered legal tender. However, in February 2021, the institution announced it will be using Bitcoin as a reserve currency.
6. United States
Even though the United States ranks sixth in the list, it still has one of the largest crypto activities in terms of trading and on-chain deposits. Major American corporations are starting to accept digital assets as payments. In October 2020, PayPal announced that their customers can use crypto assets for transactions using their accounts.
This led to other American-based companies like Visa and Tesla to announce their plans of incorporating digital currencies into their payment systems the following year. With these developments, Bitcoin has recently reached an all-time high of $52,000.
7. South Africa
South Africa made it to the seventh spot because most of its citizens are embracing crypto trading as a means to improve their lives. There are no specific laws or regulations in the country that prohibits its citizens from engaging in crypto activities but the South African Reserve Bank does not consider digital assets as legal tender.
Additionally, the South African Revenue Service sent audit requests to crypto users encouraging them to disclose trading activities.
Nigeria landed on the eighth spot because of its large Bitcoin market wherein users traded around US$600 million worth of BTC in the last five years alone. The developing country is also the second-largest Bitcoin market right next to the United States.
However, Nigeria is not a crypto-friendly country. In February 2021, the Nigerian central bank announced that all cryptocurrency transactions in the country are considered illegal.
Along with Venezuela, Colombia also leads the crypto adoption in Latin America. However, the government still does not see value in digital assets, declaring that cryptocurrencies cannot be used as a payment method.
Despite the ban on cryptocurrencies imposed by the Vietnam Government, the Southeast Asian country still landed on the tenth spot. Due to the high remittance rate imposed by the government, citizens use digital assets to send money across borders.
In 2017, the State Bank of Vietnam decreed that Bitcoin and various virtual currencies are not considered by the government as a legal means of payment. Additionally, the state imposed a fine of around US$9,000 for crypto users violating the decree.