Chainalysis Report: Vietnam Takes Top Spot in Global Crypto Adoption

A Chainalysis report show that Vietnam is ranked number one worldwide in crypto adoption in 2022, with Nigeria, the United States, and China, among the top 20 countries. 

Vietnam Ranks Number One

A recent report by Chainalysis showed countries occupying the top 20 spots in the firm’s 2022 Global Crypto Adoption Index. Chainalysis used five sub-indexes to determine the rankings, such as total and retail on-chain crypto value received at centralized exchanges (CEXes), peer-to-peer (P2P) trading volume, total and retail DeFi transaction volume, all weighted by each country’s purchasing power parity (PPP) per capita. 

Based on the overall index ranking, Vietnam occupies the number one spot for the country with the most cryptocurrency adoption, maintaining the top position for the second year in a row. The country also ranks within the top 10 in the use of DeFi, P2P, and centralized exchanges.

Nigeria, which ranks number 11 globally, shows growing adoption of the nascent technology despite the renewed crypto trading ban by the Central Bank of Nigeria (CBN) in February 2021. There has also been an increased use of P2P exchanges, with the African country being the 17th in terms of trading volume. 

Meanwhile, the United States, which ranked sixth in Chainalysis global crypto adoption index in 2020, and eighth in 2021, climbed to fifth in the current rankings. While adoption seems to be high in the US, investors and traders in the country are still having to deal with fragmented regulations. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are yet to reach an agreement on how to classify crypto either as a security or a commodity.  

China also stepped up from its 13th position in 2021 to become number 10 in the recent overall rankings. The Chinese government has repeatedly crackdown on the crypto sector, with the ban on bitcoin mining activities causing miners to relocate to friendlier jurisdictions. 

However, the Chainalysis report noted that the ban on cryptocurrency trading activities did seem to be “ineffective or loosely enforced”, given that China ranked second overall in the use of centralized exchanges. 

Emerging Markets Dominate Global Crypto Adoption

Interestingly, emerging markets seemed to dominate crypto adoption in 2022, with ten countries in the lower middle-income levels including Pakistan, Nigeria, India, Indonesia, Vietnam, and Ukraine, and eight in the upper middle-income category such as China, Colombia, Argentina, Thailand, and Russia, making the top 20 rankings. Meanwhile, the United Kingdom and the United States are the two high-income countries. 

An excerpt from the Chainalysis report reads:

“Users in lower middle and upper middle income countries often rely on cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and fulfill other financial needs unique to their economies. These countries also tend to lean on Bitcoin and stablecoins more than other countries. Over the coming years, it’ll be interesting to see what solutions the cryptocurrency industry can build to increase adoption in high and low income countries.”

While global crypto adoption has reduced in momentum as a result of the current bear market, cryptocurrency use remains higher than what was recorded before the 2020 bull market. The report noted that a critical mass of retail investors has not withdrawn their investment despite the price decline.