How widespread is cryptocurrency adoption? Chainalysis data: China, Vietnam, and the Philippines lead in Asia.

Chainalysis conducted a study on the adoption of cryptocurrencies in 154 countries worldwide, measuring factors such as purchasing power, on-chain transactions, holdings, and P2P transaction volumes. The results are somewhat unsurprising, with cryptocurrencies being more widely adopted in economically lagging countries, while only China and the United States made it into the top ten among highly developed countries.

Geopolitics and Economic Development Determine Adoption Rates

Chainalysis evaluates based on four indicators:

• Purchasing Power: Value of tokens transacted on-chain
• Retail (Individual) Trading and Usage: On-chain transaction volume
• Holdings: On-chain cryptocurrency holdings, weighted by internet users
• Peer-to-Peer Trading Volume: Volume on platforms like LocalBitcoins, Paxful (off-chain)

After research, Chainalysis identified three key points:

Global Nature of Cryptocurrency is Undeniable

Among the 154 countries analyzed, only 12 countries have almost no cryptocurrency activity, proving its speculative nature in investment, while in developing countries, it is seen more as a store of value and medium of exchange.

Developing Countries are More Active

Chainalysis suggests that due to stringent geopolitical conditions and long-term economic instability, Venezuela is almost a "perfect case study" for cryptocurrency adoption. Particularly, its people turn to cryptocurrencies as a store of value due to significant fiat inflation.

Peer-to-Peer Platforms are Crucial for Adoption in Developing Countries

Among the top four countries with the largest trading volume on peer-to-peer platforms, all appear in the top ten countries globally for adoption. Especially on P2P platforms that do not require custody of cryptocurrencies or fiat, have lower regulatory requirements with no bank connections, making them more suitable for financially underserved developing countries.

As Taiwan primarily uses cryptocurrencies for investment purposes and has a relatively low population, it did not rank among the 154 countries evaluated. Other Asian countries on the list include:

• 16th: Philippines
• 17th: South Korea
• 23rd: Hong Kong
• 25th: Malaysia
• 32nd: Indonesia
• 50th: Singapore
• 71st: Japan

However, Chainalysis acknowledges flaws in its rating methodology, as some users may use VPNs to conceal the origin of their internet activity, and will continue to adjust the rating method and update it accordingly.