Data at a glance: What is driving the explosion of encryption in Central and South Asia and Oceania?

Central South Asia and Oceania (CSAO) is the fourth largest crypto market we studied. Between July 2020 and June 2021, the value of crypto transactions in this region was USD 572.5 billion, accounting for 14% of the global transaction value during the same period. In terms of raw value, CSAO’s transactions have increased by 706% compared to last year, and its share of global crypto asset transactions has increased by 2%, making CSAO one of the fastest growing regions of all the regions we studied.


But even more impressive is the adoption rate of crypto assets in the region. CSAO includes the top three countries in our Global Encryption Adoption Index. Vietnam ranks first, India ranks second, and Pakistan ranks third. Thailand is also ranked 12th, and the Philippines is ranked 15th. Below, we will analyze the main trends in the region and study the factors driving the adoption of crypto assets in the region.

What is driving the adoption of crypto assets in Central Asia, South Asia, and Oceania?

As in other regions, CSAO has shown tremendous growth in the DeFi boom last year.


Starting from around May 2020, the share of DeFi activities in all transaction volumes has soared, reaching more than 50% in February of this year. This activity is mainly promoted by Uniswap , Instadapp and dydx. There are also important activities on Compound, Curve, AAVE and 1inch.


The transfer of encrypted assets worth 10,000 to 1 million U.S. dollars accounted for the largest share of CSAO transaction volume. 


However, despite the degree of difference from larger markets such as North America, Central Europe, Northern Europe, and Western Europe, institutional payments also dominate the movement of CSAO’s crypto assets.

Compare CSAO countries with the highest adoption rate of crypto assets: India vs. Vietnam vs. Pakistan

Although India, Vietnam, and Pakistan have high adoption rates of crypto assets, they are quite different in terms of original transaction value.


Two things stand out: First, the markets of India and Vietnam are much larger than those of Pakistan. The other is that India has a larger share of activities on the DeFi platform at 59%, compared with 47% in Vietnam and 33% in Pakistan. All three regions experienced substantial growth in the last year. Pakistan has the highest growth rate at 711%, slightly higher than India’s 641%. 


Interesting differences also appear when we look at the breakdown of transaction value by crypto assets. For example, we see the Ethernet Square and wETH share in India’s share is greater than the activity in Vietnam or Pakistan.


This is not surprising, because Ethereum and wETH are more commonly used for DeFi transactions.

These subdivisions may also reflect differences in complexity between markets. We interviewed Binh Nguyen, the coordinator of the RMIT Fintech Encryption Center and the senior financial project manager of the Royal Melbourne Institute of Technology (RMIT) in Vietnam, who has extensively studied the local crypto market. He described many crypto activities that he thought were similar to gambling. “Most forms of gambling are illegal, but they are very popular in Vietnam. I think this is one of the reasons why people here are willing to invest in highly volatile assets such as encrypted assets,” he said. According to Binh, although there is a tech-savvy team in the Vietnamese crypto community who is interested in changing the future of crypto assets and establishing innovative projects, more people investing in crypto assets do not have high financial knowledge or experience in managing risks.

Although he described Vietnam’s crypto market as a retail drive, Binh does not believe that Vietnamese use crypto assets for long-term preservation of their savings or to prevent inflation, and pointed out that the adoption rate of crypto assets in poor and remote areas is relatively high. Low. “Young people here do not have more investment options. We do not have a mature ETF, options or futures financial market, and the penetration rate of stockbroking in Vietnam is less than 5%. If you have $5,000 to invest, there is not much It can be put elsewhere.” Binh expressed his hope that as the government’s regulatory direction becomes clearer, Vietnam’s crypto market will mature. To this end, he hopes that regulators will soon provide clearer guidance on whether encrypted assets are property.

The Pakistani encryption service providers we have spoken to have said similar things about the adoption of encrypted assets in their country. In terms of commonly used service types and encrypted assets, their adoption model is similar to Vietnam. Paxful’s trading expert Muhammad told us that based on his experience, most traders focus on trading crypto assets rather than saving. “Obviously, everyone wants to make money easily. But no one wants to take risks or have any losses.”

Junaid, another trading expert at Paxful, described the crypto trading scenarios in the region in detail. “I used USDT to buy a lot of counterfeit crypto assets, such as ADA , SOL, etc. As you know, ADA, WAVES, SOL and many other crypto assets have generated huge profits, and I made profits by holding them.”

In contrast, India’s crypto market seems to be more mature. We can see this in the breakdown of the transaction size in the region.


Large institutional-scale crypto asset transfers worth more than US$10 million accounted for 42% of transactions sent from Indian addresses, compared with 28% in Pakistan and 29% in Vietnam. These figures show that Indian crypto-asset investors are part of a larger and more complex organization.

As we mentioned above, India’s DeFi market is also larger (although not adjusted for the size of the population), and there has been a significant increase in entrepreneurship and venture capital investment related to crypto assets in the region. Joel John, the head of LedgerPrime, an Indian crypto investment company, told us, “Investing in stocks in India is a long and painful process that requires you to sign a lot of documents. It takes about three to four days. It takes less than an hour to invest in crypto assets.” John estimates that the number of crypto investors in India is 4 times the number of stock investors. According to him, many of these investors have previously focused on financial assets, such as real estate that has recently fallen in return. And encrypted assets allow them to easily obtain a new source of income. But this is only the high-end market. At the low end, many people in India who are engaged in technology-related work for foreign employers have also begun to demand payment in crypto assets.

Krishna Sriram, managing director of Quantstamp, explained this to us in detail: “A large number of Indian developers, fund analysts and independent freelancers working for overseas employers have begun to demand payment in crypto assets. This is a bottom-up He also pointed out that most people he knows choose to pay in Ethereum or USDC, and receive payments through centralized service providers or DEX.

As for the large DeFi market, Krishna attributes its popularity to the increasing difficulty for users to use centralized service providers in areas where the regulation of India is uncertain. “For people in certain jurisdictions, centralized service providers are becoming more stringent and difficult to use. Unlike DeFi, this is an open, permissionless system.” 

The difference between the largest markets in Central Asia and South Asia may reflect that these countries are at different stages of crypto market development. Many people first focus on crypto assets in order to seek more profit returns. This can be done with crypto service providers. This seems to be the main use case in Vietnam and Pakistan. However, in India, a market where the crypto community is constantly evolving and actively attracting external investment, we see more and more development and use of innovative projects such as DeFi protocols. 

Posted by:CoinYuppie,Reprinted with attribution to:
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