There are endless statistics concerning which countries trade the most cryptocurrency—but until now, there has been little insight into grassroots adoption among everyday users.
New research by the blockchain intelligence firm Chainalysis has revealed the 10 countries that are leading the way when it comes to crypto usage, with Ukraine topping the list.
The results are in
Joining Ukraine in the top 10 were Russia, Venezuela, China, Kenya, the U.S., South Africa, Nigeria, Colombia, and Vietnam. Overall, the company said that its findings show “excitement around cryptocurrency as an investment and, especially in the developing world, as a means of value storage and medium of exchange.”
But which countries narrowly missed out on a coveted place in the top 10? Chainalysis head of research Kim Grauer told Modern Consensus via email: “India, Thailand, Brazil and the UK were close. We found those countries also have strong cryptocurrency adoption but were narrowly edged out.”
Grauer added that, even though Ukraine didn’t come first in any of the four metrics used in the study, it secured poll position because it scored highly in each category.
Some may raise eyebrows that Russia and China have managed to make it into the top five—given how both countries have taken a dim view of Bitcoin.
But Grauer told Modern Consensus that this isn’t as out of the ordinary as it may seem.
“The rank was surprising at first, but doing more digging revealed that the findings were not that surprising to regional experts, and there are many dynamics that explain Russia and China’s rankings,” he said. “Even after the bans in China, the general population continues to trade cryptocurrency, namely Tether.”
As for Russia, she added:
In Russia, there is indeed legal uncertainty around the use of cryptocurrency, but people continue to use cryptocurrencies for trading, cross-border payments, store of value, and even criminal activity.”
Just 12 countries were given a score of zero in the Chainalysis rankings—including Afghanistan, Chad, Libya, Mongolia, Turkmenistan and Zimbabwe. This doesn’t mean that cryptocurrency activity is non-existent in these nations, but it does suggest that the use of VPNs may be obfuscating the geographical origin of transactions.
A lifeline for developing economies
The main theme identified by Chainalysis is that developing countries are leading the charge when it comes to grassroots cryptocurrency activity—and digital assets are often used to mitigate economic instability. Venezuela’s presence at No. 3 in the rankings is undoubtedly linked to rampant inflation in the country—and the analytics firm says it has detected a trend of consumers in Latin America, Africa, and East Asia turning to crypto in order to preserve savings they may otherwise lose to economic turbulence.
Grauer told Modern Consensus that crypto, despite its inherent volatility, may still be seen as the best option given the turmoil seen in some countries. She explained:
“Yes, savings denominated in Bitcoin are subject to price volatility. People may be trying to get to stablecoins by initially purchasing Bitcoin. The Venezuelan Petro’s value has been deteriorating rapidly, so cryptocurrency—even Bitcoin—may be seen as a more stable alternative.”
The Petro is Venezuela’s state-issued—and widely distrusted—cryptocurrency. On June 1, the Venezuelan superintendent of the Petro, Joselit Ramirez Camacho, was indicted in the U.S. on drug smuggling and money laundering charges. There is a $5 million bounty on his head.
Peer-to-peer platforms have turned out to be especially important in developing countries. These services don’t take custody of the crypto or fiat traded between buyers and sellers, meaning they face fewer regulatory hurdles. And because of this, consumers who are excluded from the traditional financial ecosystem find it much easier to get involved.
None of this is to say that crypto is more important to emerging economies than developed countries, however. Grauer said that the report’s key finding is that cryptocurrency is a global phenomenon—and one nation’s use cases will be vastly different from another’s.
“Tech savvy populations are building businesses on cryptocurrency apps,” he added. “B2B businesses in North America are being serviced by companies such as Gilded, currency speculators are highly engaged and leading the way in building new financial products, and cross-border commercial businesses are increasingly using cryptocurrencies to transfer value faster.”
Choosing the top 10
A total of 154 countries were ranked in the research based on four factors:
- On-chain cryptocurrency value received, but weighted with purchasing power parity (PPP) per capita—a measure of the country’s wealth per resident
- On-chain retail value transferred, measuring the amount of cryptocurrency moved in transactions by non-professional, individual users
- The number of on-chain cryptocurrency deposits, weighted by the number of internet users
- Peer-to-peer exchange trade volume, weighted by PPP per capita and the number of internet users
Purchasing power parity is a way of comparing the real cost of a product—a shirt, or a Big Mac—in different countries, factoring for exchange rates. It is commonly used as a way of comparing the standard of living.
The method Chainalysis used favors countries with a lower PPP per capita, as this makes high levels of cryptocurrency activity “more significant based on the wealth of the average person and the value of money generally within the country.”
Chainalysis plans to release its full report—entitled “Geography of Cryptocurrency”—later in September.
Updated 12:53 a.m. on Sept. 10 to correct one instance of Kim Grauer’s gender.