Central & Southern Asia Lead in 2023 Crypto Adoption, Chainalysis Reports

Central and Southern Asia are emerging as dominant regions in the global grassroots adoption of cryptocurrencies, according to the 2023 Chainalysis Global Crypto Adoption Index released on September 12.

Chainalysis, in its fourth annual Global Crypto Adoption Index, measures countries’ involvement in the crypto space by combining on-chain data with real-world statistics. The focus isn’t on countries with the highest transaction volumes, which would be predominantly dominated by wealthy nations. Instead, the index aims to spotlight countries where the average individual is more actively participating in the crypto ecosystem. 

The index consists of five sub-indexes: 

1. On-chain cryptocurrency value received at centralized exchanges, weighted by purchasing power parity (PPP) per capita.

2. On-chain retail value received at centralized exchanges, also weighted by PPP per capita.

3. Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and the number of internet users.

4. On-chain cryptocurrency value received from DeFi (decentralized finance) protocols, weighed by PPP per capita.

5. On-chain retail value received from DeFi protocols, similarly weighted.

To estimate transaction volumes for these sub-indexes, the team uses web traffic patterns related to the relevant cryptocurrency services and protocols. Acknowledging that web traffic data might not be perfect, Chainalysis takes confidence from its vast data set, which includes “hundreds of millions of transactions and 13 billion web visits.”

India, positioned within the Central & Southern Asia and Oceania (CSAO) region, leads the 2023 Global Crypto Adoption Index. Six of the top ten countries are from the CSAO region, underscoring the area’s prominence in the crypto adoption landscape. Other notable entries include Nigeria, Vietnam, and the United States, ranked second, third, and fourth, respectively.

Interestingly, while global grassroots adoption seems to have declined, a different narrative unfolds in the subset of lower-middle-income (LMI) countries. LMI nations, which include rising economies such as India, Nigeria, and Ukraine, have exhibited the most robust recovery in grassroots crypto adoption over the past year. Notably, these countries have witnessed growth in crypto adoption that surpasses their Q3 2020 levels, even while other wealth categories lag.

LMI countries hold special significance as they house 40% of the world’s population and are characterized by dynamic industries and burgeoning populations. With crypto adoption burgeoning in LMI countries and institutional interest from high-income nations, the future may witness a unique blend of top-down and bottom-up adoption approaches.

The complete findings, trends, and insights are set to be detailed in the upcoming “2023 Geography of Cryptocurrency Report” by Chainalysis.

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70% of Jamaica population to adopt CBDC in 5 years, prime minister says

Central bank digital currency (CBDC) evolved into a hot topic in Jamaica when the country’s central bank successfully completed the first pilot test in early January.

Following the tests, the country’s prime minister, Andrew Holness, has spoken confidently about CBDC adoption in the country.

Holness has predicted the majority of the Jamaican population would be quick to adopt the digital currency, with over 70% using the CBDC within five years. The Jamaican prime minister highlighted reduced banking costs and inclusivity of CBDC in a Bloomberg interview, adding that digital currency would ensure greater government accountability thanks to easier public resources tracking.

While admitting the initial challenges of a nationwide CBDC launch, which is aimed for the first quarter of 2022, Holness added that the government has to “figure out how to give people access to digital devices and the internet in general.”

The Bank of Jamaica, the country’s central bank, has become a pioneer in CBDC efforts with one of the first completed nationwide pilot projects in the world. After partnering with the Irish cryptography firm eCurrency Mint in March 2021, the central bank has conducted an eight-month-long pilot.

Related: UK Economic Affairs Committee unconvinced by prospect of retail CBDC

As Cointelegraph reported, the bank has minted 230 million Jamaican dollars (JMD) ($1.5 million) worth of the CBDC for issuance to deposit-taking institutions and authorized payment service providers. BoJ then issued 1 million JMD ($6,500) in CBDC to the staff at BoJ’s banking department and another 5 million JMD ($32,000) to the National Commercial Bank, a major financial institution in the country.

BoJ aims to add two new wallet providers for its CBDC, followed by a nationwide rollout in the first quarter of this year. The central bank also plans to focus on interoperability by testing transactions between customers of different wallet providers.