Adoption of Cryptocurrency in India & Vietnam – India Ranks 2nd Globally in Terms of Adoption

The bull market season of 2021 hasn’t been bad for veterans and new investors in the Crypto Industry other than a few hiccups along the road. Recently, Chainanalysis published a report on their website ranking the global countries based on the adoption of cryptocurrency. The Global adoption of Cryptocurrency has jumped over 880% with P2P platforms Driving masses across tier-2 and tier-3 cities. Before I share my personal opinion, let’s talk about how was this ranking calculated, and did India really rank in 2nd place?

Throughout this study, a total of 154 countries were considered based on three core metrics. The Chain analysis page claims they took the mean of each country’s ranking in all three metrics, and then on a scale of 0 to 1, rated the overall rankings. The closer to 1, the higher the rank.

Transaction value received & Purchasing Power Parity per capita. These two were considered as a metric to differentiate between countries since $1 in the US isn’t the same as $1 in India. Certainly, you can buy more goods in India with the same $1 while comparing it to the US. Now, let’s dive in a bit deeper to understand this concept of Purchasing Power Parity and how it varies across nations before we come back to our main topic.

Purchasing Power Parity

This is a metric used by macroeconomic analysts that compare different countries’ currencies through the same goods. It helps to predict the cost of living in various regions and the standard of living between countries. For this study, transactions below $10,000 were considered.

Now the Chain analysis report calculated this metric by considering the total cryptocurrency received by that country and weighting the on-chain value based on PPP per capita which shows the wealth per resident of that nation.

The higher the ratio of the on-chain value received to PPP per capita, the higher the ranking, meaning if two countries received the same amount of cryptocurrency, the country with lower PPP per capita would rank higher.

Chain Analysis Report.

On-Chain Retail value transferred, weighted based on PPP Per capita.

India ranks 2nd and 3rd on On-Chain retail value received and total On-Chain Value received in the Country. This metric measured the activity of non-professional and individual cryptocurrency users, based on the amount of cryptocurrency they are transferring compared to the wealth of an average person in that nation.

Peer-to-peer(P2P) volumes and PPP per capita & the number of Internet Users in that nation.

P2P volumes actually make a significant portion of trading volumes on international exchanges, especially in emerging markets like India. For understanding this metric even better, if we look at the recent highlights of the exchanges operating in India, WazirX witnessed 2648% growth in user sign-ups from tier-2 and tier-3 areas. Tier-1 cities accounted for 2375% growth. CoinDCX attained a $1 Billion valuation after all the fundraising sequences. But in this metric, India ranks 72nd globally. Maybe there needs to be a solution to make the P2P process even more seamless for further growth and adoption in the numbers.

I’ve shared some of the problems which I faced while using P2P in Indian Exchanges. The video received over 150 comments and likes which seems to show that there’s a problem that needs some solution.

2021 Global Adoption Index

The table below was taken from the Chain Analysis blog page and contains the top 20 countries in terms of their overall adoption.

One of the surprising things for me personally was the absence of the US and China from the top 5 positions. Although, that’s understandable for China after their recent crackdown on Crypto Mining across the nation. On the other hand, America is planning to impose heavy taxes on Cryptocurrencies and tighten the rules and regulations across the nation. These could be a few reasons which might have led to lower activity of retail users on the blockchain.

What is ahead?

After a currency crisis at the Central Bank of Afghanistan, the people are turning towards Bitcoin and other cryptocurrencies as a potential alternative to carry on their life savings and ditch their national currency as a store of value. Time has proven again and again that standard government-backed fiat currencies are doomed to failure, it’s all a matter of time and when that happens.

These actions can eventually lead to an overall shift towards blockchain-based assets and only time can tell what will unfold next. Rising peer-to-peer activities are growing worldwide, be it lending & borrowing, or a simple transfer of money. Fiat currencies also face a risk of inflation during times of crisis or war. Inflation destroys generational wealth and is a major downside of Fiat Currency.

That was all from my side for this time. I hope this helped.

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