Chainalysis geographic user analysis: India utilizes DeFi platforms, Vietnam and Pakistan are keen on speculation.

The global blockchain analysis company Chainalysis released a data analysis report yesterday on Central & Southern Asia and Oceania (CSAO), indicating that cryptocurrency trading activities in this region have grown rapidly over the past year, making it the fourth largest cryptocurrency market globally.

High Adoption Rate of Cryptocurrency in CSAO

According to a report by Chainalysis, the Central and Southern Asia Oceania (CSAO) region received approximately $572.5 billion in cryptocurrency between July 2020 and June 2021, accounting for about 14% of the global total. In a previous report, "Global Crypto Adoption Index 2021," the top three countries in cryptocurrency adoption in 2021 were Vietnam, India, and Pakistan, all of which are part of the CSAO region. Additionally, Thailand and the Philippines ranked 12th and 15th in adoption rates.

Reasons for Such High Adoption Rates

Among the various cryptocurrency market activities, CSAO particularly favors DeFi platforms, generating over $60 billion at its peak this year, followed by centralized exchanges.

The trading volume on these DeFi platforms is mainly concentrated in decentralized exchanges and lending platforms such as Uniswap, dYdX, Compound, and Curve.

Significant Regional Differences

Although these regions show high adoption rates for cryptocurrencies, data from the top three countries in adoption rates reveal that India has a particularly high usage of DeFi platforms, accounting for about 59%; whereas Pakistan leans more towards centralized services, making up around 67%.

The types of tokens used in cryptocurrency activities also provide insights. In India, the usage of ETH/wETH is higher than other currencies, reflecting the country's preference for DeFi platforms, as ETH/wETH is more commonly used in DeFi platform transactions.

Regarding Vietnam's strong affinity for cryptocurrencies, Binh Nguyen, a senior financial project manager at the Royal Melbourne Institute of Technology in Vietnam, stated:

Most forms of gambling in Vietnam are illegal but very popular, which is why people are willing to invest in high-volatility assets such as cryptocurrencies.

Furthermore, the lower level of financial knowledge in Vietnam drives people to make overly risky investment decisions, aiming to capitalize on cryptocurrency investments during bull markets.

Similarly, the cryptocurrency market in Pakistan mirrors that of Vietnam, with locals relying on investing in altcoins to gain significant profits from price surges, resulting in a higher cryptocurrency value generated from centralized services.

Maturity of the Cryptocurrency Market in India

Among these three countries, India has the highest proportion of transactions exceeding $10 million in a single trade, accounting for approximately 42%, indicating a larger and more complex population of cryptocurrency investors in India.

In response to this trend, Joel John, head of the Indian cryptocurrency investment firm LedgerPrime, commented:

In India's high-end market, the number of cryptocurrency investors is four times that of stock investors, as the process of investing in stocks in India is painful and lengthy. In the lower-tier market, an increasing number of tech professionals working for overseas employers are beginning to request payment in cryptocurrencies.

Over the past year, many Indian media outlets speculated that the country would completely ban digital currencies. In such a volatile regulatory environment, decentralized DeFi platforms have become increasingly popular among the people. Additionally, India has seen the emergence of educational channels attempting to raise public awareness of the cryptocurrency industry.

The differences between the Central Asian and South Asian markets reflect the varying stages of development in the cryptocurrency market in these countries. Many people focus on cryptocurrencies solely for speculative gains, which can easily be achieved through centralized platforms, as seen in Vietnam and Pakistan. However, in the Indian market, which continues to attract external investments as the cryptocurrency community evolves, the development and use of innovative projects such as DeFi protocols are on the rise.