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
The SWAC, which includes Central and South Asia and Oceania, represents the third largest cryptocurrency market.
Investors from SWAC countries secured $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 the SWAC and it is Vietnam, which ranks first, followed closely by the Philippines, India which obtains the fourth position , Pakistan sixth and Thailand eighth. while at the bottom we find Nepal sixteenth and Indonesia at the bottom of this small club of successful countries.
Unweighted crypto activity sees India at the top, which confirms for the second consecutive year in the first place and receives an impressive $172 billion in cryptocurrency value from July 2021 to June 2022 while, for example, Thailand, Vietnam, Australia and Singapore are at more than $100 billion each.
NFT carry out this process of opening up to this world with 58% of searches leading back to subject-related IP addresses in the second quarter of 2022 and 21% involving blockchain play-to-earn games.
Several NFT game items, such as Axie Pet in Axie Infinity and sneakers in STAGErepresent tradable assets on MagicEden and OpenSea highlighting a strong correlation and mix between the platforms and the NFTs themselves.
According to Chainalysis, while NFTs absolutely dominate in Asia, the second largest share in terms of importance and volume is accounted for 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 biggest play-to-earn games, are operated in Vietnam and Australia respectively.
Liminal (Singapore portfolio infrastructure provider) Senior Vice President of Operations and Strategy Manan Vora said:
“The collapse of the FSO played a significant role in shaking the confidence of the cryptocurrency market. When one of the top ten coins drops to zero, it becomes very difficult to convince people who have just entered the market to stay in. These are the users you could lose forever.
Vietnam ranks first among Southeast Asian countries
As we scratch the surface, we find that leading the way in crypto adoption is Vietnam, which ranked 1st, immediately followed by the Philippines, which jumped from 15th to 2nd place in just one year.
Vietnam and the Philippines are also rife with similar growth drivers such as pay-to-win (P2E) games and remittances, with 25% of Filipinos and 23% of Vietnamese having played a pay-to-win game at least once. win, and, there was a phase where that percentage grew so much that it was 40% of Axie Infinity’s player base.
Remittances, reports Chainalysis, account for 5% and 9.6% of Vietnam’s and the Philippines’ respective gross domestic products.
On the subject, Manan Vora intervened by stating:
“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 over $20 billion deployed in remittances).
In SWAC countries, value transfers are usually done with stablecoins (mainly ETH and WETH) so that the transferred value does not change during the transfer.
However, this monstrous expansion is being held back (like 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 make up for their losses; to this, on July 1, the government also added a 1% commission on source transactions (TDS).
“It led to a big brain drain,” Vora said, “first in Singapore and now in Dubai. …because even if your business is a market-making business, it is now effectively treated as a lottery business.
Vikram Rangalathe director of ZebPay, an Indian cryptocurrency exchange, stepped in to shed some light on the matter:
“From the conversations my colleagues and I have had, members of the Indian government, including MPs, are not anti-crypto per se. Some are very pro-crypto. But they fear their constituents are trading a volatile asset without adequate information. A 25-year-old saver to get married or support his family could exchange a few coins and get blown away. No public official can be seen supporting something that is so risky for most people. The rich can survive such losses, but not a cleaner, a farmer or a rickshaw driver. India has dozens of [crypto] projects to establish property rights, access tickets and passes, help rural artisans monetize, while giving token holders the ability to “skydive with a movie star at Dubai” and more. »
The relationship between Pakistan and cryptocurrencies
Following in India’s footsteps, the central bank and government of Pakistan recommended banning cryptocurrencies and formed three sub-committees to deliberate further on the issue and keep tabs on the phenomenon while raising hopes for a resounding turnaround in crypto.
Pakistan also finds itself in a delicate situation since it has been on the gray list of the Financial Action Task Force (FATF) since 2018, and is not eligible for international financial assistance, which leads the country’s government to consider this active as an alternative to circumvent the obstructionism of the international community.
The Governor of the State Bank of Pakistan (SBP), Reza Baqirsaid that:
“The potential risks associated with cryptocurrencies” far outweigh the benefits. Widening underground economy and capital flight as main concerns.
Vikram Rangalaon the other hand, on the topic of openness to digital currencies said.
“After seeing Venezuela and Argentina, I think anyone in a country where things aren’t so stable is starting to see cryptocurrency as a possibility.”