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1、OCTOBER 2024The 2024 Geographyof Crypto ReportEverything you need to know about regional trendsin crypto adoption0Table of ContentsThe 2024 Global Crypto Adoption Index1North America9Latin America26Central,Northern,&Western Europe42Eastern Europe54Central&Southern Asia and Oceania66Eastern Asia78Mid

2、dle East&North Africa94Sub-Saharan Africa109The 2024 Global Crypto Adoption Index:Full List125The 2024 GlobalCrypto Adoption IndexThe 2024 Geography of Crypto Report1Central&Southern Asia and OceaniaRegion Leads the World in Terms ofGlobal Cryptocurrency AdoptionOur Global Crypto Adoption Index meth

3、odologyThe Global Crypto Adoption Index is made up of four sub-indexes,each of which is based on countriesusage of different types of cryptocurrency services.We rank all 151 countries for which we have sufficientdata on each sub-index,weight the rankings by characteristics including population size

4、and purchasingpower,take the geometric mean of each countrys ranking in all four,and then normalize that final numberon a scale of 0 to 1 to give every country a score that determines its overall ranking.The closer thecountrys final score is to 1,the higher the rank.In order to calculate our sub-ind

5、exes,we estimate countries transaction volumes for different types ofcryptocurrency services and protocols based on the web traffic patterns of those services and protocolswebsites.We acknowledge that web traffic data are imperfect,as some crypto users likely employ VPNsand other similar tools to hi

6、de their true physical locations.However,given that our index accounts forhundreds of millions of cryptocurrency transactions and more than 13 billion web visits,it is likely that anymisattributed transaction volume due to VPNs is marginal,given the size of the dataset.We also comparefindings with i

7、nsights from local crypto experts and operators around the world,giving us more confidencein this methodology.Below are descriptions of the sub-indexes and how they are calculated,as well as improvements in ourmethodology since last year.Sub-index category 1:on-chain cryptocurrency value received by

8、 centralizedservices,weighted by weighted by GDP per capita on a PPP adjusted basisWe include this sub-index to rank each country by total cryptocurrency value received on centralizedservices,and weight the rankings to favor countries where that amount is more significant in comparisonto the average

9、 persons income in that country.To calculate this,we estimate the total value receivedon-chain by users of centralized services in each country,and weight that by GDP per capita on a PPPadjusted basis,which measures the countrys income per resident.The higher the ratio of on-chain valuereceived to G

10、DP per capita on a PPP adjusted basis,the higher the ranking.In other words,if two countriesreceived equal amounts of cryptocurrency at centralized services,the country with lower weighted GDPper capita on a PPP adjusted basis would rank ahead.Sub-index category 2:on-chain retail cryptocurrency valu

11、e received by centralizedservices,weighted by GDP per capita on a PPP adjusted basisWe also estimate the activity of non-professional,individual cryptocurrency users at centralized services,based on the value of crypto theyre transacting compared to the average persons purchasing power.The 2024 Glob

12、al Crypto Adoption Index2We do this by estimating the amount of crypto received at centralized services by users in each country similar to sub-index category 1 but only counting value received in retail-sized transactions,which wedesignate as transactions under$10,000 worth of crypto.We then rank e

13、ach country according to thismetric,but weight it to favor countries with a lower GDP per capita on a PPP adjusted basis.Sub-index category 3:on-chain cryptocurrency value received by DeFi protocols,weighted by GDP per capita on a PPP adjusted basisWe rank countries by their DeFi transaction volume

14、and weight the rankings to favor countries with lowerGDP per capita on a PPP adjusted basis.Sub-index category 4:on-chain retail cryptocurrency value received by DeFiprotocols,weighted by GDP per capita on a PPP adjusted basisWe rank each country by DeFi transaction volume carried out in retail-size

15、d transfers(again,under$10,000 worth of crypto),weighted to favor countries with lower GDP per capita on a PPP adjusted basis.Methodology changesMethodology change 1:measuring DeFi activityThe primary change in this years methodology pertains to how we measured cryptocurrency valuereceived by decent

16、ralized protocols.For DeFi services,we included only the value received from suspectedpersonal wallets and excluded the value received by other known DeFi wallets.This new methodologyensures that the total value received is not inflated due to the intermediary steps required by certain smartcontract

17、s.Heres an example of how DeFi transfers typically work:1.A personal wallet initiates a swap in DeFi Protocol A,transferring Ether(ETH)from the personalwallet to DeFi Protocol As Router contract address.2.ETH is deposited to the wrapped Ether(wETH)token contract address from the Router contractaddre

18、ss.3.The Router contract address receives wETH.4.A transfer ensues from the Router to the decentralized exchange(DEX)pool contract.5.A transfer ensues from the DEX pool contract to the Router.6.There is a final transfer from the Router back to the personal wallet.Based on our new methodology,we are

19、only counting the first transfer in the above example to determinethe total value received by the DeFi protocol.By doing this,we can eliminate intermediary transfersbetween contracts that belong to the same service provider.This process led to a decrease in ourestimates of value received,but is now

20、a more accurate estimate.The 2024 Global Crypto Adoption Index3Methodology change 2:excluding P2P exchange sub-indexIn previous years,we included P2P cryptocurrency exchange trade volume,weighted by PPP per capitaand number of internet users,to calculate overall Global Crypto Adoption rankings.This

21、year,we havedecided to exclude this sub-index due to a substantial decrease in activity on P2P exchanges.One of thelargest and the most tenured P2P exchange,LocalB,shut down last year,which contributed tothis decline.The 2024 Global Crypto Adoption Index Top 20Central&Southern Asia and Oceania(CSAO)

22、dominates our 2024 Index,with seven of the top 20countries located in the region.As we explore later,CSAO has a unique set of crypto markets with highlevels of activity on local crypto exchanges,with merchant services,and in DeFi.CountryRegionOverallindexrankingCentralizedservice valuereceivedrankin

23、gRetail centralizedservice valuereceived rankingDeFi valuereceivedrankingRetail DeFivaluereceivedrankingIndiaCentral&SouthernAsia and Oceania(CSAO)11132NigeriaSub-Saharan Africa25223IndonesiaCentral&SouthernAsia and Oceania(CSAO)36611United StatesNorth America421244VietnamCentral&SouthernAsia and Oc

24、eania(CSAO)53365UkraineEastern Europe67556RussiaEastern Europe711777PhilippinesCentral&SouthernAsia and Oceania(CSAO)898149PakistanCentral&SouthernAsia and Oceania(CSAO)9441813BrazilLatin America(LATAM)108101014TrkiyeMiddle East&NorthAfrica(MENA)1114111511The 2024 Global Crypto Adoption Index4United

25、 KingdomCentral,Northern&Western Europe(CNWE)12122198VenezuelaLatin America(LATAM)1317161112MexicoLatin America(LATAM)1418171310ArgentinaLatin America(LATAM)1513131720ThailandCentral&SouthernAsia and Oceania(CSAO)1616151916CambodiaCentral&SouthernAsia and Oceania(CSAO)171093523CanadaNorth America182

26、2261615South KoreaEastern Asia1915143333ChinaEastern Asia2020182422Global crypto activity is increasingBetween the fourth quarter of 2023 and the first quarter of 2024,the total value of global crypto activityincreased substantially,reaching higher levels than those of 2021 during the crypto bull ma

27、rket.We cansee this pattern in the chart below,where we apply our Adoption Index methodology globally by adding all151 countries index scores for each quarter from Q3 2021 to Q2 2024,and re-indexing them again toshow global adoption growth over time.The 2024 Global Crypto Adoption Index5The 2024 Glo

28、bal Crypto Adoption Index6Last year,growth in crypto adoption was driven primarily by lower-middle income countries.This year,however,crypto activity increased across countries of all income brackets,with a pullback in high incomecountries since the beginning of 2024.The launch of the Bitcoin ETF in

29、 the United States triggered an increase in total value of Bitcoin activityacross all regions,with particularly strong year-over-year growth in institutional-sized transfers and inregions with higher income countries,such as North America and Western Europe.On the contrary,year-over-year growth of s

30、tablecoins was higher among retail and professional-sized transfers,and issupporting real-world use cases in low income and lower-middle income countries in regions such asSub-Saharan Africa and Latin America,in particular.The 2024 Global Crypto Adoption Index7When we look at year-over-year growth i

31、n terms of types of services,we see that DeFi activity increasedsignificantly in Sub-Saharan Africa,Latin America,and Eastern Europe.This growth likely drove anincrease in altcoin activity in these regions,as shown in the above chart.The 2024 Global Crypto Adoption Index8North AmericaThe 2024 Global

32、 Crypto Adoption Index9North America:Institutional Momentumand U.S.Bitcoin ETPs Propel CryptoFurther Into the MainstreamLike previous years,North America remains the largest cryptocurrency market globally,with an estimated$1.3 trillion in on-chain value received between July 2023 and June 2024,repre

33、senting about 22.5%ofglobal activity.North America10North Americas dominance in the cryptocurrency market is largely fueled by institutional activity moreso than any other region.Approximately 70%of the regions crypto activity consisted of transfersexceeding$1 million,reflecting the growing influenc

34、e of major financial players in the regions cryptomarket.North America11The overwhelming majority of this activity is driven by the United States,where 2024 has proven to be apivotal year for crypto adoption and industry growth.After a bear market spurred in part by the late 2022 collapse of FTX and

35、 the March 2023 failure of SiliconValley Bank,the North American crypto sector has made a remarkable recovery.In March of 2024,theprice of bitcoin(BTC)broke$73,000 a new all-time high signaling a resurgence from a period ofsustained volatility that ultimately strengthened the ecosystems integrity an

36、d resilience.In 2024,the convergence of traditional finance(TradFi)and crypto was cemented,with institutionalenthusiasm amplified by the introduction of spot bitcoin exchange-traded products(ETPs)in U.S.markets.Exchange-traded funds(ETFs)in particular which are the most popular and well-known type o

37、f ETP have captured the attention of retail and institutional investors alike.More than ever,North Americas crypto climate is marked by substantive institutional momentum.Established legacy financial entities such as Goldman Sachs,Fidelity,and BlackRock who have shapedfinancial markets in the U.S.an

38、d globally for decades are now taking serious positions in the cryptospace.This marks a critical maturation point for the industry,as cryptocurrency is increasingly integratedinto the mainstream.North America12The United States is the foremost pillar of globalcrypto adoptionThe United States cryptoc

39、urrency markets are the largest and most influential in the world,standing outglobally by a large margin.This prominence stems in no small part from the countrys immense wealth,large population,deep andliquid capital markets,and thriving innovation ecosystem.The U.S.also benefits from political stab

40、ility,afavorable investment climate,and the U.S.dollars present role as the principal reserve currency of theinternational financial system.Fortified by these factors,the U.S.is a global leader in cryptocurrencyadoption,ranking fourth in our annual global adoption index.U.S.markets are notably more

41、volatile than global markets in terms of growth.In recent quarters,the U.S.has demonstrated heightened sensitivity to both bull and bear markets.When cryptocurrency prices rise,the U.S.market shows larger increases in growth than the global market and the inverse is true whencryptocurrency markets d

42、ecline.We can see this movement below,comparing the rate of growth in U.S.and global markets with returns on bitcoin.North America13North America14This volatility can largely be attributed to the significant levels of institutional activity within the country,atrend that positions the U.S.market as

43、a key driver of global financial trends in both cryptocurrency andTradFi alike.Concurrently,the U.S.is emerging as a dominant global user of centralized services in the crypto space,reflecting the growing reliance on centralized finance(CeFi)platforms,such as Coinbase and Gemini,forcustody and asset

44、 management.The rising demand for crypto-related financial products like ETPs which well explore in greater detailbelow is likely to drive the demand for CeFi.Claire Ching,Head of Institutional at centralized exchange and custodian Gemini,emphasized theimportance of making digital assets accessible

45、to everyday users through centralized platforms.“AtGemini,we are in the business of abstraction its our job to simplify the crypto-native know-how so thatanyone with a mobile phone can safely access digital assets,”she explained.Furthermore,the entry of institutional giants like BlackRock into the c

46、rypto space underscores the growingconvergence of TradFi and crypto.To gain insight into this development,we spoke with Kevin Tang fromBlackRocks Digital Assets team.BlackRocks foray into digital assets has been carefully planned whichincludes their BTC and ETH ETPs as well as tokenization with stra

47、tegic CeFi partnerships laying thefoundation for its success.For example,in 2022,BlackRock partnered with Coinbase to integrate CoinbasePrime capabilities into Aladdin,the firms proprietary investment management platform.This integrationNorth America15allowed BlackRock and its clients to manage bitc

48、oin and ether exposures seamlessly alongside those oftraditional assets.“The platform integration was critical in building the foundational capabilities that wouldultimately pave the way for the build-out of IBIT iShares Bitcoin Trust,”Tang explained.Centralized platforms are likely to remain pivota

49、l in driving the ongoing TradFi-crypto convergence.CeFiand centralized institutions are critical in enabling the evolution and provision of infrastructure that allowsfirms like BlackRock to operate in the crypto space,Tang emphasized.United States market drives global prices as ETPs solidifycrypto-T

50、radFi nexusAs we have explored in other global cryptocurrency markets,the January 2024 launch of spot bitcoin ETPsin the U.S.has had a transformative impact on both the U.S.and global crypto markets,driving institutionalinterest and bringing unprecedented inflows into BTC.Immediately following the S

51、ECs approval,the market experienced a global bull run in price,accompaniedby positive outsized returns a few weeks after the launch.While it is not possible to fully isolate the impact of the launch of the U.S.bitcoin ETPs,there is broadrecognition that the ETP contributed to a bullish market sentim

52、ent and increased institutional BTCNorth America16exposure.This wave of demand has been attributed to ETPs abilities to simultaneously meet the needs ofboth retail and institutional investors,providing a familiar,regulated vehicle for gaining BTC exposure whileavoiding the complexities of managing p

53、rivate wallets or navigating crypto-native infrastructure.The U.S.launch of bitcoin ETPs and spot ether ETPs months later marks a pivotal moment in theTradFi-crypto convergence,primarily because it influenced institutional interest and broader marketsentiment.Following the approval of the bitcoin ET

54、P in the U.S.,the crypto market experienced a notableuptick.For deeper insight into the implications of this milestone,we asked Kevin Tang of BlackRock whoseiShares Bitcoin Trust(IBIT)has emerged as the most popular BTC ETP to discuss its impact.“The launchof the U.S.bitcoin ETPs has been historic a

55、nd speaks to the pent-up demand among investors for alow-cost,efficient,and secure way to invest in bitcoin.”IBIT broke several records,including being thefastest ETP to reach$10 billion and$20 billion in assets under management(AUM).“We had highexpectations for asset gathering with the bitcoin ETP,

56、the strong client interest we have seen so farrepresents a win for the ETF wrapper,”Tang remarked.Within its first two hundred days,inflows to the U.S.bitcoin ETFs wildly outpaced even the historicallypopular gold ETF,making it the most popular class of ETP in history.North America17The rapid adopti

57、on affirms the strong,latent demand for a regulated,institutional-grade product thatoffers access to BTC.The impact of the U.S.bitcoin ETPs is not just a U.S.phenomenon;it has far-reaching implications,settingthe stage for a broader wave of adoption internationally,as well.Tang pointed out that the

58、product hasattracted investments from Asia,Europe,and Latin America.“The global impact of these ETPs isundeniable,”he said.Tang further emphasized that BTC is increasingly being viewed as a global monetaryalternative and a unique diversifier in portfolios especially as a potential hedge against infl

59、ation orgeopolitical instability a point echoed in BlackRocks recent whitepaper on the unique value propositionthat bitcoin affords to investors.This growing acceptance of BTC and ETH as assets worthy of serious investment is paving the way forbroader institutional adoption.Tang noted that many inve

60、stors are now engaging in deeper discussionsabout the role of BTC and other crypto assets in portfolios.“Theyre asking how bitcoin fits in a portfolioalongside other traditional investments,”he said,noting that the launch of the ETPs has opened the doorfor broader access to crypto.“ETPs have shifted

61、 the conversation to focus on the investment merits and thevalue proposition of BTC and ETH,rather than just the logistical challenges of how to gain access to them,”Tang explained.For many institutions,bitcoin ETPs serve as a first step toward deeper engagement with the crypto market.This exposure

62、could eventually lead to broader investments in blockchain technology and decentralizedfinance(DeFi)well beyond exposure to the price of BTC and ETH.“Right now,were focused on BTC andNorth America18ETH because thats where were seeing demand and regulatory clarity,”he explained.“Were alwayslooking to

63、 meet our clients needs as the market evolves.”With ongoing efforts to educate investors and build trust in the space,traditional financial institutions(FIs)like BlackRock are playing an important role in reshaping how institutions approach cryptocurrency,layingthe foundation for broader adoption in

64、 the future.As Tang put it,“We firmly believe in the potential ofblockchain technology,and tokenization specifically,to potentially disrupt traditional finance.”Stablecoin growth stalls in U.S.marketsDespite record activity,U.S.markets have also faced some challenges over the past year,including ano

65、ticeable shift in stablecoin activity away from U.S.-regulated platforms.This trend may reflect barriersimposed by sputtering regulatory progress on stablecoins and digital assets more broadly.Up through 2023,the share of stablecoin transactions on U.S.-regulated exchanges had been steadilyincreasin

66、g,consistent with increased stablecoin adoption globally.However,in 2024,this trend began toreverse,as we see below.This shift likely reflects a relative,rather than absolute,decline in stablecoin usage within U.S.markets,given the surge in stablecoin adoption across emerging and global markets.More

67、 stablecoin transactionsare now happening on non-U.S.-regulated exchanges,suggesting that global stablecoin adoption isoutpacing U.S.growth.Below,we can see that both U.S.-regulated and non-U.S.regulated exchanges aregrowing,but non-U.S.market stablecoin activity is growing faster.North America19As

68、noted above,this shift does not necessarily indicate a sharp decline in U.S.market participation,butinstead speaks to the rapidly expanding role of stablecoins in emerging markets and non-U.S.jurisdictions.For further insight into the evolving stablecoin market,we spoke with Circle,the issuer of USD

69、C astablecoin pegged to the U.S.dollar.Circle emphasized the growing global demand for U.S.dollar-backedassets,especially among populations outside traditional banking systems where access to stable currencyis limited.“One way to think about the near-term opportunity for USDC is to look at the globa

70、l demand for fiat dollarcash,a spokesperson from Circle explained.The Federal Reserve estimates that nearly$1 trillion in U.S.banknotes 45%of all banknotes outstanding are held outside the U.S.,with two-thirds of all$100bills in circulation abroad.This demand exists despite the difficulty people out

71、side the U.S.encounter whentrying to source U.S.dollars through their local banking systems.The growth in stablecoin usage outside the U.S.reflects a broader trend where international markets,facedwith currency volatility,are turning to dollar-denominated stablecoins to preserve value and facilitate

72、faster,cheaper transactions.Stablecoins,such as USDC and USDT(Tether),offer a compelling solution byproviding access to the stability of the U.S.dollar without requiring access to traditional banking rails,which are often more difficult to access outside of the United States.Still,regulatory uncerta

73、inty in the U.S.is threatening the countrys leadership in the stablecoin space.Circlepointed out that the absence of clear U.S.regulations has allowed other financial centers such as theNorth America20European Union(EU),the United Arab Emirates(UAE),Singapore,and Hong Kong to attract stablecoinproje

74、cts with more favorable regulatory frameworks.Europe,through its MiCA framework,has succeededin doing what the U.S.has yet to achieve:providing legal and regulatory clarity for the entire digital assetmarket,the spokesperson noted.Markets in Crypto-Assets Regulation(MiCA),which began to take effecti

75、n June 2024,has created a regulatory foundation for stablecoins in the EU.This regulatory clarity in regions outside the U.S.is fueling the growth of stablecoins globally,while the U.S.risks falling behind.The absence of a U.S.regulatory framework for dollar-referenced stablecoinsrepresents a threat

76、 to American interests,the spokesperson from Circle warned.This vacuum hasincentivized the growth of stablecoins outside the U.S.,where demand for access to the dollar is greater.The opportunity cost for the U.S.extends beyond missing out on economic activity tied to stablecoins italso risks forfeit

77、ing influence and authority over the future role of the dollar in on-chain commerce.This isnot unlike the historic precedent of Eurodollars,which initially received little attention from U.S.policymakers due to the markets small size.Eurodollars quickly grew,however,and helped cement thedollars inte

78、rnational role fortunately for legislators.The same may not hold true for the stablecoins if theU.S.continues to lag on providing clarity.Nevertheless,Circle remains optimistic about USDCs potential in the U.S.,despite the regulatory delays.“The U.S.is the home of the dollar and Circles home market

79、and we are bullish on USDCs potentialhere,”they added.However,as more countries develop regulatory frameworks that encourage stablecoinadoption,particularly in regions where inflation and instability spur demand,U.S.policymakers are underincreasing pressure to act.“A key question now is whether the

80、U.S.will finally enact stablecoin rules of itsown,or maintain the status quo of uncertainty,which policymakers in both U.S.political parties say isunacceptable,”they remarked.The U.S.is not without progress on stablecoins entirely.Circle referenced the stablecoin bill advanced bythe House Financial

81、Services Committee in July 2023,which could provide the regulatory clarity needed forthe U.S.market to remain competitive.“Congress should approve this bill on a bipartisan basis,”theyurged.Establishing clear AML/CFT and sanctions obligations for stablecoin issuers will be critical toensuring U.S.-b

82、ased stablecoins maintain their global relevance.North America21Canadian markets follow U.S.closelyAlthough smaller than their U.S.counterparts,the Canadian market remains a key player in North America,receiving approximately$119 billion in value between July 2023 and June 2024.While Canadian market

83、s closely follow U.S.trends,there tends to be less volatility,with more moderategains during bull markets and milder retractions during bear markets.Across the board,Canada tracks closely with global averages in asset distribution and transaction sizes.North America22North America23For an on-the-gro

84、und perspective of the cryptocurrency landscape in Canada,we spoke to Kunal Bhasin,Partner&Co-lead at KPMGs Digital Assets Center of Excellence,Advisory Services.Bhasin offeredinsights into crypto adoption in Canada,as well as some of the challenges the industry is facing.In the wake of regulatory c

85、hanges implemented last year which introduced stricter rules around custody,leverage and stablecoins Canada has seen several major crypto businesses suspend operations withinthe country,with Gemini joining Binance and OKX as the latest exchanges to exit the market.However,according to Bhasin,this tr

86、end is not solely due to regulatory challenges.“Canadian regulators haveprovided more clarity to crypto exchanges than other North American jurisdictions by introducing theconcept of crypto contracts,which clarifies the applicability of securities regulations for crypto platforms,”he explained.The d

87、eparture of these exchanges,he suggests,might stem from broader business decisionsrather than an unworkable framework.Nevertheless,Bhasin emphasized that Canadians still have“lots ofregulated venues available to engage with crypto in a meaningful way.”While Canadas regulatory framework for trading p

88、latforms and investment funds has helped maintainsome confidence,gaps remain particularly in the regulation of stablecoins and DeFi.The Canadianregulatory approach for stablecoins is somewhat different from the approach taken by otherforward-looking jurisdictions such as EU,UAE,Hong Kong and Singapo

89、re.”Bhasin explained.“There is nota clear regulatory framework for stablecoins.As a result,you could see stablecoin issuers leave Canadaand associated crypto innovation also moving outside Canada,”he said.Despite these hurdles,Bhasin spoke to promising developments.The pan-Canadian self-regulatoryor

90、ganization,Canadian Investment Regulatory Organization(CIRO),now oversees all investment dealers,mutual fund dealers,and trading activity across Canadas debt and equity markets.Under this framework,crypto exchanges are required to become CIRO members,bringing them under stricter disclosure,internalc

91、ontrol,and regulatory reporting requirements.“This is a sign of the Canadian regulatory landscapematuring for crypto companies,”said Bhasin.Another challenge in Canadas crypto adoption is the reluctance of major FIs to engage meaningfully withcryptocurrency.“Major banks globally have taken appropria

92、te steps to understand the unique risks ofbanking regulated crypto companies and have incorporated an enhanced due diligence program relevantfor crypto businesses,which are a source of new deposits for these banks.However,were not seeingsimilar steps from banks in Canada,”Bhasin explained.“This has

93、made it difficult for crypto companies toget banking services,leading to some innovation moving outside of Canada.”Additionally,he pointed outthat large Canadian banks have crypto teams and have conducted various pilot programs andproof-of-concepts but,“When it comes time to move beyond these pilots

94、,leadership often pulls back,”hesaid,attributing this to risk aversion and a preference for maintaining existing business models overdisrupting them with new,potentially risky crypto ventures.A significant driver of crypto adoption worldwide has been the proactive stance of national governments,like

95、 those in Singapore and the UAE,who have prioritized crypto as a part of their economic strategies.According to Bhasin,stronger government engagement could stimulate growth and investment.“Thereneeds to be more engagement at the federal level to make digital assets a priority industry for Canada,”he

96、 said.North America24While Canadas crypto market faces challenges,Bhasin is optimistic about the future,especially givenongoing efforts from both the public and private sectors.“Canada still has a strong regulatory environmentfor certain crypto activities such as investment funds,”said Bhasin,noting

97、 that it was the first country tolaunch staked ETH ETFs.“Theres potential to grow that further by providing a clear roadmap for primaryand secondary markets for tokenized real world assets,”he added.“If the government makes crypto apriority and we continue to progress in the regulatory space,theres

98、no reason Canada cant claim aposition as a global leader in crypto adoption.”Future proofing crypto in North Americas lies in the balancebetween institutional momentum,regularity clarity,andinnovationThe immense influence of North America,particularly the United States,on the global cryptocurrencyma

99、rket is undeniable.The regions dominance this period,fueled by the introduction of ETPs and thegrowing TradFi-crypto convergence,has significantly shaped the crypto landscape both domestically andinternationally.As Claire Ching of Gemini noted,Institutional adoption has taken on a different flavor t

100、hiscycle.It is more measured and requires significantly more diligence after last cycles spectacular downfall ofFTX.With this level of focus and resources,institutional commitment to the space is firmly cemented.Institutional giants like BlackRock are no longer merely experimenting they are fully in

101、vested,signalingthat cryptocurrency has moved from the fringes to the mainstream financial conversation.Speaking to thisparadigm shift,Kevin Tang from BlackRock imparted the importance of“the persistent view of blockchainas a transformative technology with the potential to disrupt traditional paradi

102、gms and value chains notjust in finance,but acrossindustries and sectors on a broader scale.”Despite this momentum,challenges remain.Regulatory uncertainty in the U.S.and Canada,coupled withthe shift of stablecoin market share outside North America,emphasizes the need for balanced innovation,clear r

103、egulatory frameworks,and sustained institutional support to ensure the continued growth andstability of the crypto industry at large.North America25Latin AmericaNorth America26Latin Americas Search for EconomicStability:The Rise of StablecoinsAmid VolatilityLatin America is the fifth largest region

104、we study,representing 9.1%of cryptocurrency value receivedbetween July 2023 and June 2024.During this time period,the region received nearly$415 billion incryptocurrency,placing it slightly above Eastern Asia.Latin America27Latin America28Centralized exchanges(CEXs)are the most popular service used

105、by Latin Americans,at 68.7%slightlybehind CEX use in North America.Regional transaction value in Latin America is primarily driven byinstitutional and professional investors(i.e.entities transacting more than$10,000).Latin America is the second fastest growing region we study this year,with a year-o

106、ver-year(YoY)growthrate of approximately 42.5%.As we will explore later,much of this growth has been driven by strong butdecidedly diverse crypto markets in Venezuela,Argentina,and Brazil.Latin America29Argentina leads the region in terms of cryptocurrency value received at an estimated$91.1 billion

107、,onlyslightly ahead of Brazils estimated$90.3 billion.In our global adoption index,four of the top 20 countries are in Latin America:Brazil(9),Mexico(13),Venezuela(14),and Argentina(15).As we will explore in detail below,stablecoin-based remittances aregaining traction in these countries,as well as

108、across Latin America as a whole.Latin America30Brazils institutional crypto activity suggests renewedinterest by major financial entitiesIn last years Geos report,we noted that,despite Brazils historically well-developed institutional cryptomarket,institutional activity declined in early 2023,which

109、likely coincided with the global crypto bearmarket.But this trend reversed in the middle of the year and has since increased,suggesting renewedinterest by major financial entities.For instance,the monthly value of institutional-sized transactions(i.e.greater than$1 million)increased by approximately

110、 29.2%between the last two quarters of 2023,andapproximately 48.4%between Q4 of 2023 and Q1 of 2024.We spoke to Andr Portilho,Head of Digital Assets at investment bank BTG Pactual,to learn more aboutthe factors driving this institutional activity.“One key factor is the diversification of portfolios,

111、particularlyas the market matures.Investors are increasingly integrating digital assets into their asset allocationstrategies,viewing them as valuable alternative investments that offer the potential for enhanced returns.The consolidation of Bitcoin and other cryptocurrencies as established investme

112、nt options has been crucialin this shift,”he explained.“The notable recovery of institutional activity in crypto assets in Brazil can bepartially attributed to regulatory evolution and the entry of American institutions into the cryptocurrencymarket,especially with the introduction of Bitcoin and Et

113、hereum ETFs.”Aaron Stanley,Founder of Brazil Crypto Report,a newsletter and podcast that explores the latest trends inthe Brazilian crypto ecosystem,noted similar trends in Brazils embrace of crypto.“The ecosystem hasLatin America31matured quite significantly.Weve seen several TradFi banks launch cr

114、ypto brokerage products(Ita,thecountrys largest bank,for example),and most of the other majors are actively building their own similarproducts.We saw major global exchanges,such as OKX and Coinbase,hard launch in the country,complete with local teams and entities.The Drex pilot program a hybrid CBDC

115、/smart contract platformbeing developed by Brazils central bank has also prompted TradFi banks to be much more forwardthinking in their digital asset strategies.This has had downstream benefits on these institutions and theirclients as it pertains to crypto adoption.”With crypto activity thriving ac

116、ross Brazil,we delved into a detailed analysis of the most popular assetsamong Brazilians.First,we found that Bitcoin transactions increased the most during the time periodstudied.There was a particularly sharp increase in Bitcoin transaction value between September 2023 andMarch 2024,which possibly

117、 coincided with the SECs approval of spot Bitcoin ETFs in January 2024.It isalso noteworthy that the price of Bitcoin almost doubled during this time period,which could havecontributed to these higher volumes.A closer look at this Bitcoin activity reveals that value received by Brazilians on global

118、exchanges is muchhigher than amounts received on regional local exchanges.Latin America32On local exchanges,however,there is a stark contrast in the types of assets being traded.As we seebelow,YoY stablecoin transaction value on local exchanges(207.7%)has increased significantly more thanBitcoin,Eth

119、er,and altcoins.Stanley noted that“many of Brazils exchanges and fintech brokerages offerUSD-pegged stablecoins to their customers,with the idea of offering USD exposure as a store of value.This has definitely gained traction,but at this stage,it appears that the main use cases for stablecoins areon

120、 the B2B cross-border payments side.”Latin America33Stablecoins now account for approximately 70%of the share of indirect flows from Brazils local exchangesto global exchanges.Brazils high levels of stablecoin activity,as well as general interest in digital productsand services,are drawing significa

121、nt interest from major crypto players,notably Circle,which announcedits official launch in Brazil in May 2024.According to a Circle spokesperson,“Circles engagement in Brazilcomes at a time of increased regulatory certainty resulting from pro-innovation policies and initiatives,withadditional busine

122、ss-friendly rule-making expected in the near future.We are partnering with leadingregional businesses to launch digital asset products and enable near-instant,low-cost,and 24/7 access toUSDC for Brazilian users,and are strengthening our local presence to reach an even wider user-base.As aresult of t

123、his commitment to the region and the partnerships in place,the amount of users transacting withUSDC in the region has already increased exponentially.”Latin America34What,then,does the future hold for Brazils evolving crypto landscape?As Stanley noted,the generalBrazilian economy may still present o

124、bstacles for mainstream adoption.“Economic growth has slowed;theBrazilian real(BRL)has slumped massively against the dollar this year;there are concerns that taxes willcontinue to increase.Middle class consumers and families face massive debt burdens.Simply put,thereisnt as much disposable income as

125、 one would expect to find in a country of this size.”However,there arestill opportunities for crypto growth,especially as regulators open their approach to the technology.“Theyview it as a tool to be leveraged rather than a threat to be crushed.A regulatory regime that iswell-received by the market

126、should provide a stable foundation for the crypto economy here for years tocome,”Stanley concluded.Stablecoins provide a path to stability during Argentinaslong-standing economic turmoilArgentinas decades-long battle with inflation and the Argentine pesos(ARS)devaluation has left manycitizens search

127、ing for alternatives to protect their savings and secure a more stable economic future.Thisyear,unfortunately,Argentinas economic situation has been especially volatile.By the second half of 2023,inflation was approximately 143%,the ARSs value had declined precipitously,and four in 10 Argentinianswe

128、re living in poverty.In December 2023,newly-elected president,Javier Milei,announced that the ARSwould be devalued by 50%,which he described as“shock therapy,”and that the government would cutenergy and transportation subsidies.Latin America35To protect themselves from this economic crisis,some Arge

129、ntinians have turned to the black market toacquire foreign currencies,most commonly the U.S.dollar(USD).This“blue dollar”is the U.S.dollar tradedat a parallel,informal exchange rate,often purchased through clandestine exchange houses called“cuevas,”found throughout the country.Others have explored U

130、SD-pegged stablecoins,which is reflectedin our data.We looked at monthly stablecoin trading volume with the ARS on Bitso,a leading regional exchange inLatin America,and saw that the pesos decreasing value consistently sparked an increase in monthlystablecoin trading.For instance,when the ARSs value

131、fell below$0.004 in July 2023,the monthlystablecoin trading value surged to over$1 million in the following month.Similarly,when the ARSs valuedropped below$0.002 in December 2023 when President Milei made his announcement thestablecoin trading value exceeded$10 million the following month.Unsurpris

132、ingly,Argentinas stablecoin market is among the leaders in the Latin America region.Argentinasshare of stablecoin transaction volume is 61.8%,placing it slightly above Brazils share(59.8%)and wellabove the global average(44.7%).Latin America36Additionally,retail-sized stablecoin value(i.e.transactio

133、ns under$10,000)received in Argentina is growingat a faster rate than value received in any other asset type,once again suggesting that Argentinians lookto stablecoins as a means of mitigating the effects of inflation and currency devaluation.Their interest instablecoins highlights the role of crypt

134、o in unstable markets and how citizens are able to take bettercontrol of their financial futures by embracing cryptocurrency,regardless of official monetary policy.Latin America37Crypto adoption remains strong in Venezuela,despiteMaduro regime uncertaintyVenezuelas relationship with cryptocurrency h

135、as been nothing short of turbulent,marked by experimentslike the launch(2018)and subsequent abrupt termination(2024)of the state-backed petro(PTR)astablecoin meant to be backed by Venezuelas oil and mineral wealth as well as crackdowns on Bitcoinmining and blocked access to certain mainstream crypto

136、 exchanges.At the same time,as the Maduroregime has sought ways to bypass economic sanctions,its illicit oil trade became entangled in cryptodealings,leading to high-profile indictments by the U.S.Department of Justice.These crypto-related eventsunderscore a broader transformation,as the Maduro regi

137、me weaponizes it for corruption while citizensturn to it as a means of securing financial independence.Yet despite this tumult,the Maduro regime has recently hinted at a renewed interest in cryptocurrencywithout providing concrete plans.Regardless of the outcome of such political developments,Venezu

138、elaremains one of Latin Americas fastest-growing crypto markets.Venezuelas year-over-year growth of110%far exceeds that of any other country in the region.What is driving this growth?First,it appears that Venezuelans are drawn to cryptocurrency to combat theplummeting value of the Venezuelan bolvar(

139、VES).As we see below,there is a strong inverse relationshipbetween the VES price in USD and monthly crypto value received.This is corroborated by a body of pressreporting,suggesting that ordinary Venezuelans continue to seek stable stores of value and hedgesagainst the countrys economic crisis.Latin

140、 America38Latin America39DeFi is another aspect of cryptocurrency growth in Venezuela.Since 2022,centralized services haveaccounted for the majority of value received in the country.However,interest in DeFi is increasingly takinghold,which was particularly evident at the end of 2023.Although central

141、ized services are still the most popular so far this year,DeFis growing market share will bean area to watch in the country in the near future,and may further accelerate if the Maduro regimeexplicitly supports crypto innovation.Crypto activity accelerates in the Caribbean years after FTXbankruptcyIn

142、 the years following the collapse of FTX,the Caribbeans crypto ecosystem experienced a period ofuncertainty and slowed activity as trust in crypto platforms waned.However,beginning in late 2023,theCaribbean witnessed a resurgence in crypto activity.Users appear to be turning to mainstream centralize

143、dexchanges(CEXs),such as Coinbase and Binance.We spoke to David Templeman,Specialist Financial Investigator for the Cayman Islands Bureau ofFinancial Investigation to learn more about how crypto activity in the Caribbean is shifting.In the CaymanIslands specifically,Templeman noted“a significant upt

144、ick in the number of overseas clients seeking to setup legal entities in the Web3 and blockchain space in the last year compared to those recently past.TheseLatin America40projects typically include Layer 1s or Layer 2s,and have a wide range of applications,from AI,cross-chaininfrastructure,gaming a

145、nd data/cloud storage.”As Templeman concluded,“The fallout from the various collapses(FTX,TerraUSD/Luna,Celsius Network,and Three Arrows Capital)has placed pressure on the industry to learn from mistakes and put in placebetter oversight and guardrails.There is a strong community of blockchain and We

146、b3 companies withinthe Islands both physically present and legally domiciled here.”It appears that crypto activity in theCaribbean is thriving once again,solidifying the sub-region as a key hub for adoption in years to come.Latin America41Central,Northern&Western EuropeLatin America42Stablecoins dom

147、inate market share,Bitcoin grows,and merchant servicesthrive in Central,Northern,&Western EuropeCentral,Northern&Western Europe43Central,Northern&Western Europe44Central,Northern&Western Europe45Central,Northern,&Western Europe(CNWE),the second largest cryptocurrency economy in the worldafter North

148、America,received$987.25 billion in value on-chain between July 2023 and June 2024,accounting for 21.7%of global transaction volume.Most countries in CNWE saw crypto activity grow,averaging a 44%growth rate year-over-year(YoY).The United Kingdom(UK)remains CNWEs largestcryptocurrency economy,receivin

149、g$217 billion in crypto,and ranking 12th in our global cryptoadoption index.For transactions below$1 million i.e.,professional($10K-$1M)and retail($10K)transfers Bitcoin(BTC)saw nearly 75%growth,the highest of all asset types in CNWE.Across all transaction sizes,BTCaccounted for$212.3 billion roughl

150、y one-fifth of CNWEs total value received on-chain.WhileCNWEs BTC activity for transactions below$1 million grew at a lower rate than North Americas as seenin the chart below,the former outpaced the latter in growth across all other asset types,particularlyin stablecoins.For transfers less than$1 mi

151、llion,CNWE saw growth in stablecoin volume 2.5x greater than NorthAmerica.CNWEs stablecoin value across all transaction sizes accounted for almost half($422.3 billion)ofits total crypto inflows.Looking at average monthly inflows,the chart below shows how stablecointransfers below$1 million performed

152、 in the past year,averaging between$10-$15 billion monthly.Central,Northern&Western Europe46Though inflows decreased in May and June of 2024,the share of stablecoin transactions increased,indicating strong usage despite the post-bull run market decline.Looking back further at the last two yearsin CN

153、WE,stablecoins have dominated other asset types.The chart below examines purchases made forless than$1 million by asset type.As we can see,stablecoins averaged a 52.36%share of transactionsacross asset types between July 2022 and June 2024.In the last year,CNWEs share of stablecoin purchases with fi

154、at currency was disproportionately greaterthan that of BTC.The chart below uses order book data a list of buy and sell orders for an asset orsecurity to complement on-chain activity,and shows the euro(EUR)has a 24%share of stablecoinCentral,Northern&Western Europe47purchases traded with fiat currenc

155、ies,but only a 6%share of BTC purchases.Conversely,the U.S.dollar(USD)has a larger share of BTC purchases than it does stablecoin purchases.The data suggest that,when it comes to crypto trades with fiat,CNWE is more optimized for crypto usersmaking stablecoin purchases than for acquiring BTC.To lear

156、n more about stablecoin activity in the region,we spoke with BVNK,a global company offering amulti-asset platform for stablecoin payments.Chris Harmse,co-founder and chief business officer atBVNK,said“Our fiat business is in service of our stablecoin platform.We think they coexist,and we needto brid

157、ge the gap into the fiat world.”Harmse confirmed that Chainalysis findings on the regions stablecoin usage were consistent with thecompanys observations.BVNKs business clients buy stablecoins to meet a variety of payments use cases.As for those businesses consumers,90%of their payments are made usin

158、g stablecoins.Well share moreabout BVNK in the next section.Merchant services thrive in the UKCNWE has the second largest merchant service market in the world next to CSAO,driven primarily by theUK,which saw 58.4%growth YoY.Central,Northern&Western Europe48Stablecoins are the most commonly used asse

159、t type in these services,consistently accounting for 60-80%of the market share each quarter,as seen in the chart below.As one such merchant service provider enabling stablecoin transactions for businesses in the UK andEurope,BVNK covers B2B and B2B to consumer(B2B2C)use cases,such as the following e

160、xamples:Settlements:Fintech or payment service providers help merchants settle invoices,offeringpayment rails that are faster and cheaper than those in traditional finance(TradFi).Pay-ins:When consumers want to pay a business using stablecoins(e.g.,making a deposit on atrading platform,topping up a

161、gaming or sports betting account,or making an online purchase),BVNKs business customers leverage an API to deliver a crypto payment gateway.Payouts:Money service businesses(MSBs)use stablecoins to pay contractors or employees,manyof whom live in South America,experience currency devaluation,and/or d

162、ont have access to theU.S.dollar.Speaking of which,citizens in countries like Argentina which saw 143%inflation in the second half of2024 are turning to stablecoins to mitigate the effects of currency devaluation.Harmse said,“Theres an emerging market where businesses are starting to see stablecoins

163、 as fungible.Much like consumers in Argentina who cant get access to dollars in their market,businesses areCentral,Northern&Western Europe49hamstrung by traditional payment rails.They cant pay invoices on time,and theyre tapping into the globaltrade flow by using stablecoins to make those payments.”

164、The average transaction size BVNK sees on its platform is between$100K and 250K,and payments in thatrange are typically large business transactions used to settle invoices,as described above.Most B2Btransactions the company processes are cross-border payouts,with the majority of stablecoin paymentsg

165、oing to Latin America.Consumer payments processed through BVNKs platform range between$100 and$1K.When asked about new or surprising stablecoin use cases,Harmse mentioned micropayments tofreelancers in the gig economy again,these are typically cross-border payments for which traditionalpayment metho

166、ds would be too cost-prohibitive.He also mentioned the region is starting to see morenonprofits and NGOs using crypto payouts in stablecoins specifically in times of crisis,to get aid toconflict zones more quickly.Payhound is another company in CNWE offering merchant services.Its a Malta-based crypt

167、o paymentprocessor serving the countrys online gaming industry,and offers settlements and large-volume trading.While the latter drives most of Payhounds revenue,the company also recognizes the value and potentialof its payment processing product.Elton Dimech,Managing Director at Payhound,said,“We be

168、lieve that there will be a lot of appetite andinterest from online businesses to offer as many options as are available,especially more innovativepayment methods.”Real-world asset tokenization gains tractionRegional experts this year shared that real-world asset(RWA)tokenization,while nascent,is gai

169、ningtraction in CNWE.Philipp Bohrn is VP,public and regulatory affairs at Bitpanda,a cryptocurrencyexchange based in Austria.“Across Europe,we are seeing tokenisation projects for RWAs gaining traction,particularly in sectors such as real estate,intellectual property and collectibles such as art,car

170、s or wine,”he said.We also spoke with Sylvain Prigent,chief product officer at Societe Generale-FORGE(SG-FORGE)a fullyintegrated and regulated subsidiary of Societe Generale Group.SG-FORGE is paving the way in securitytoken adoption,notably with its first digital green bond issuance directly registe

171、red on the Ethereum publicblockchain last year with increased transparency and traceability on ESG data.Prigent thinks that securitytokens and RWAs in general will create an accessible investment opportunity in the traditionallycompetitive securities market.A lot of development has been done to make

172、 this new infrastructuresmoothly available to TradFi,according to Prigent.Central,Northern&Western Europe50CNWE fourth in the world for DeFi growthCNWEs DeFi activity in the past year was on par with the global average.The region outperformed NorthAmerica,Eastern Asia,and MENA in YoY growth,accounti

173、ng for$270.5B of all crypto received in theregion.Decentralized exchanges(DEXes)drove most of CNWEs DeFi growth,while most other DeFi servicecategories inflows declined in recent quarters.In Q1 of this year,NFTs and bridges saw a temporary surge,which then subsided,with levels returning to those of

174、previous years.Lending saw an upswing leading upto Q4 of 2023,but steadily declined going into 2024 and has yet to bounce back.Central,Northern&Western Europe51Central,Northern&Western Europe52Although similar growth trends were largely mirrored around the world,DeFi grew faster in CNWE than itdid g

175、lobally.In CNWE,the growth rate for bridges and NFTs was 2x and only 1.5x in the rest of the world.The future of crypto in Central,Northern,&Western EuropeThis summer,the European Union(EU)s Markets in Crypto-Assets Regulation(MiCA)went into effect forstablecoins,which have been gaining market share

176、 across CNWE in the past year.However,the regionhas yet to feel MiCAs regulatory effects on crypto-asset service providers(CASPs),a benchmark which willtake effect in December.We interviewed several experts on the potential regulatory impacts of MiCAacross the EU.A major challenge that remains is re

177、gulatory uncertainty and the complexity of cross-border compliance,”says Philipp Bohrn at Bitpanda.“There also seems to be an education gap,with many participantsunaware of how tokenisation projects work and what the benefits and risks can be.However,we see greatopportunity here by bridging this kno

178、wledge gap and creating clear regulatory frameworks,we canunlock the true potential of asset tokenisation,driving innovation,and strong growth in the global financialmarkets.Elton Dimech at Payhound discussed how MiCA could affect payment processors,particularly those thatserve the online gaming ind

179、ustry in CNWE.“In Malta,we have a robust framework and have to competewith other businesses that have little regulation.So,if a merchant wants the easier way out,we wont bethe right option for them.When MiCA goes into effect,this will completely change,and Im hoping that theregulators within the EU

180、will enforce this new regulation so that we have a level playing field for allcrypto-asset service providers.”With MiCAs rules for CASPs set to take effect in December,compliance teams will be at the forefront ofimplementation and associated control enhancements.Sophie Bowler,Group Chief Compliance

181、Officer atUK-based Zodia Custody,a firm that bridges the TradFi-crypto gap,shared her companys sentiments.“We believe regulation is the key to mainstream adoption and further success and innovation of digitalassets,”Bowler said.“Regulatory clarity will not only enable digital asset firms to develop

182、new productswith confidence,but it will encourage more traditional financial institutions to engage with digital assetswithin a well-defined regulatory framework.”And as MiCA unfolds in the EU,the UK continues to evolve its own regulatory framework.“For firms that are unable or unwilling to meet MiC

183、As requirements,there may be a short-term shift to theUK market,”Bowler said.“However,we believe this will be temporary,as UK crypto legislation is expectedto closely align with MiCA,and the FCAs roadmap for the crypto legislative package,along with relatedconsultation papers,is anticipated to be in

184、troduced in early 2025.This roadmap will provide us greaterclarity on the timelines for these legislative changes.”At Chainalysis,well be monitoring the final phase of MiCAs rollout,as well as regulatory developments inthe UK,and are eager to see how these measures impact crypto adoption in the comi

185、ng year.Central,Northern&Western Europe53Eastern EuropeCentral,Northern&Western Europe54Despite war and regulatory questions,crypto adoption grows in Eastern Europedriven by institutions and DeFi activityEastern Europe55Eastern Europe56As the fourth largest cryptocurrency market,Eastern Europe recei

186、ved$499.14 billion in value on-chainbetween July 2023 and June 2024,or 11%of the total share of crypto received globally.Centralizedexchanges(CEXes)received the most crypto in the region at nearly$324 billion,and DeFi activity grewsignificantly in the past year with$165.46 billion in crypto,a third

187、of the regions inflows.In this years global crypto adoption index,regional leaders Ukraine and Russia ranked 6th and 7th,respectively,with Russia advancing six places from last years ranking.That both countries crypto marketsare thriving is remarkable given the ongoing war and intensifying internati

188、onal sanctions regime againstRussia,which led Eastern Europe with$182.44 billion in crypto inflows as shown below.Ukraine followed,receiving$106.1 billion in crypto.Eastern Europe57In Ukraine,institutional and professional transfers drove a large portion of its crypto market growth,anoteworthy devel

189、opment given the countrys evolving regulatory situation.Eastern Europe58To gain regional perspective on this trend,we spoke with WhiteBIT,a crypto exchange with roots inUkraine and currently headquartered in Lithuania,with a total of eight offices globally.Despite the war,WhiteBIT maintains a strong

190、 presence in the region,along with other CEXes,although some of them mayhave relocated operations to other Eastern European countries due to security concerns.“Institutional and professional crypto transfers in Ukraine have surged as many seek financial stabilityamid the ongoing war,with cryptocurre

191、ncies viewed as a safer alternative,”the organization said.“Thistrend is influenced by global factors like market volatility,inflation,and war-related sanctions,alongsidegrowing institutional interest in Bitcoin ETFs from firms such as BlackRock.”BTC purchases using Ukrainian hryvnia growA review of

192、 order book data a list of buy and sell orders for an asset or security shows that Bitcoin(BTC)purchases using the Ukrainian hryvnia(UAH)have grown in the past year,totalling$882.64 million.Eastern Europe59This follows a peak in UAH inflation at 26.6%in December 2022,and a steady decline in inflatio

193、n in Q12023.Because consumer purchasing behavior typically lags behind economic trends,Ukrainians may havebeen pursuing BTC as an alternative store of value to the UAH.“Amid economic uncertainty,BTC is seen as a safer long-term investment compared to the volatile nationalcurrency,”WhiteBIT said.“BTC

194、 liquidity and security make it more attractive for both institutional andindividual investors in Ukraine,who seek stability and long-term value preservation amid ongoing war andeconomic instability.”Russia-based homegrown services grow in popularityRussia continues to receive large volumes of crypt

195、ocurrency from domestic and foreign sources.Last year,we reported a growth in homegrown services in Russia,a trend that has remained steady this year.Theindex of growth for local services in Russia(below)examines the average share of web traffic definedas a greater than a 50%share to Russia-based se

196、rvices in the past two years.While visits to CEXwebsites have remained relatively flat,those to Russian-language no KYC exchange websites have risen,peaked mid-last year,and are now holding steady.This could be in part due to the expansive sanctionsagainst major Russian financial institutions,drivin

197、g Russian nationals to more broadly use these types ofservices,where they can on-and off-ramp fiat from their sanctioned Russian banks to crypto.Eastern Europe60That reality aside,lets discuss a potential positive growth indicator for Eastern Europe:a substantialincrease in DeFi activity.DeFi activi

198、ty grew nearly 40%YoY in Eastern EuropeIn the past year,DeFi activity accounted for over 33%of total crypto received for Eastern Europe.Andwhen looking at YoY DeFi growth worldwide,Eastern Europe placed third globally,behind Latin Americaand Sub-Saharan Africa.Eastern Europe61In Eastern Europe,decen

199、tralized exchanges(DEXes)saw by far the greatest increase in crypto inflows particularly in Ukraine,Russia,Poland,and Belarus.Regionwide,DEXes received$148.68 billion in crypto.Crypto sent to DEXes in Ukraine and Russia grew by 160.23%and 173.88%,respectively,with UkrainianDEXes receiving$34.9 billi

200、on and Russian DEXes,$58.4 billion.Several countries,such as Moldova,Hungary,and Czechia,also saw a rise in DeFi lending services,which received$11.29 billion in crypto.Eastern Europe62While countries like Hungary and Moldova saw explosive growth in bridges and lending,given theirrelatively small ma

201、rkets,crypto inflows to those categories only accounted for a fractional share of theregions total DeFi volume.For instance,Hungarys nearly 600%increase in crypto sent through bridgesamounted to$151 million in crypto.While not an insignificant sum,comparing Hungarys bridge inflows toUkraines$897 mil

202、lion puts the figure into regional context.NFT growth also surged in some countries,but accounted for a mere$6.9 million of Eastern Europes total DeFi inflows.Token smart contracts(i.e.,those that leverage ERC-20 tokens,as well as popular stablecoins,such asUSDT and USDC)were not included in the abo

203、ve chart because all Eastern European countriesexperienced a notable decline in this category,mirroring a regional decrease in stablecoin volumes.Mostother regions saw sustained growth in stablecoins,and WhiteBIT believes that regulatory uncertainty andgeopolitical tensions could be contributing to

204、Eastern Europes move away from stablecoins.As for Ukraines decline in stablecoin usage,Anna Tutova,CEO at crypto news media group andPR-consulting agency,Coinstelegram,had this to say.“Many people in Ukraine buy crypto for investmentpurposes,so this may be the reason for the reduction in use of stab

205、lecoins.At the same time many peoplein Ukraine use stablecoins purely for P2P transactions,as money,a payment method and an easy tool forcross-border transfers and they may not use it for investments at all.Stablecoins are often used as a storeof value in countries with volatile currencies,or as a w

206、ay for financial inclusion for the unbankedpopulation.In Ukraine and other Eastern European countries there is no need for that,as most of thepopulation has bank accounts and local currencies are more or less stable.Of course,because of the warand generally over the years Ukrainian hryvnia lost its

207、value significantly,but people tend to exchange theirEastern Europe63savings in hryvnia to dollars.Before December 2023 there were limits on buying foreign currency inUkraine,but in December 2023 they were levied.”Both institutional use and grassroots crypto adoption take hold in Ukraineand RussiaDe

208、Fi transaction sizes for the past year reveal two key trends,particularly among regional leaders,Ukraineand Russia.Ukraine saw a 361.49%increase in large institutional transactions(i.e.,those greater than$10M),which drove most of its DeFi growth.Similarly,Russia,Belarus,Poland,and Slovakia saw thegr

209、eatest DeFi growth with large institutional transfers.Conversely,Ukraine had a significant increase in large retail transactions(those between$1K-10K)andsmall retail transactions(those less than$1K),which rose 82.29%and 91.99%,respectively.Small retailtransactions typically indicate grassroots adopt

210、ion,and given the regions geopolitical instability andUkraines recent recovery from inflation,these smaller transactions could demonstrate investors usingcrypto to bolster everyday purchasing power.That this is happening with DeFi presents another consideration:while an increase in DeFi activity typ

211、icallyindicates that a crypto market is maturing,investors may also be turning to DeFi because it offers greaterease,speed,and control over ones assets in transacting than operating through CEXes.When cryptousers face regulatory uncertainty,they may choose the path of least resistance.Eastern Europe

212、64The future of crypto in Eastern EuropeThis past summer,the EU began its rollout of Markets in Crypto-Assets Regulation(MiCA)with theapplicability of its so-called stablecoin regime starting on June 30,2024.On December 30,2024,MiCA willbe fully applicable to all crypto-asset service providers opera

213、ting within the EU.By all indications,Ukraineis working towards adopting MiCA standards given its candidacy for EU membership.“Embracing blockchain technology and integrating crypto-assets into a regulatory framework could be amajor step forward for Ukraines efforts to support its economy,particular

214、ly during the ongoing war withRussia,”says Oleksandr Bornyakov,Deputy Minister of Digital Transformation of Ukraine on IT industrydevelopment.“A regulated crypto economy can generate tax revenue to the government,attract and retainstartup talents,and position the country as a competitive player in t

215、he global digital economy.Well-designed crypto legislation will help move the crypto industry out of the so-called gray area and intoa legal framework,enhancing both legitimacy and trust in this emerging market.”Responding to Western sanctions and fears of difficulty in trading with countries like C

216、hina,the Russiangovernment passed legislation in September to legalize crypto mining and to allow the use of crypto forinternational payments,following a years long crypto ban.Officials at the Central Bank of Russia andRussian lawmakers have explicitly singled out a strong desire to reduce reliance

217、on the U.S.dollar tomitigate the effects of the sanctions that were put in place as a consequence of its invasion of Ukraine.As for cryptos future in Eastern Europe,WhiteBIT had this to say.“Given the rapid evolution of blockchaintechnology and the increasing focus on regulatory frameworks,we are co

218、nfident that the crypto industryholds immense growth potential.Eastern Europe,as part of the global market,is emerging as a pivotalregion for blockchain adoption.This is a time of opportunity,where embracing new regulations andtechnological advancements can become a catalyst for the development of d

219、igital assets across theregion.”A regulator in Ukraine shares this optimism.“From the perspective of promising areas for digital assets inEastern Europe,we believe that Ukraine has the potential to become a key player,considering the highlevel of adoption and interest in cryptocurrencies,”said Yurii

220、 Boiko,Commissioner at Ukraines NationalSecurities and Stock Market Commission.“We have a multi-million population with a high level of ITliteracy,a continually expanding digitalization in the country,strong technological ecosystems,and a drivefor innovation.Combined with a favorable regulatory envi

221、ronment,which we are actively working onestablishing,this will enable Ukraine to become a future driver of the development and implementation ofdigital assets in the Eastern European region.”Well continue monitoring trends to see how MiCA and other regulatory efforts affect Eastern Europeancrypto ad

222、option in the coming year.Eastern Europe65Central&Southern Asiaand OceaniaEastern Europe66Central&Southern Asia and OceaniasMost Dynamic Crypto MarketsIndia Leads Grassroots Adoption Globally,SingaporesPayments Market Takes Off,and Indonesian TradersSee OpportunitySimilar to last year,Central&Southe

223、rn Asia and Oceania(CSAO)is the third largest crypto region westudied,accounting for more than$750.0 billion in crypto asset inflows between July 2023 and June 2024.CSAO accounts for 16.6%of global value received,placing the region behind only North America andWestern Europe,and well above the remai

224、ning regions.Central&Southern Asia and Oceania67Crypto activity in CSAO is driven by centralized exchanges,with transfers in sizes above$10,000representing the largest share of value received,suggesting substantial professional and institutionalactivity.Central&Southern Asia and Oceania68Central&Sou

225、thern Asia and Oceania69Indonesia leads the region in terms of cryptocurrency value received during the time period studied,atapproximately$157.1 billion.Seven of the top 20 countries in our global adoption index are in the CSAO region:India(1),Indonesia(3),Vietnam(5),the Philippines(8),Pakistan(9),

226、Thailand(16),and Cambodia(17).Keep reading for a briefupdate on Indias cryptocurrency regulation,and how institutions are driving crypto adoption in bothSingapore and Indonesia.Crypto activity thrives in India amid evolving regulatoryenvironmentLast year,we noted that India remained a top global cry

227、ptocurrency market,amid evolving regulatory andtax environments.The countrys comparatively high crypto capital gains tax(at 30%)and 1%tax on alltransactions also known as a tax deducted at source(TDS)may have drawn some Indian investors toexplore international exchanges without such stringent regula

228、tory requirements.Regardless,thesedevelopments didnt seem to hinder cryptos overall growth in the country,and it is the same this year.Inaddition to ranking second in the CSAO region in terms of cryptocurrency value received,India leads theworld on this years global adoption index.In December 2023,I

229、ndias Financial Intelligence Unit(FIU)notified nine offshore exchanges Binance,HTX(formerly Huobi),Kraken,Gate.io,KuCoin,Bitstamp,MEXC,Bittrex,and Bitfinex that they were notCentral&Southern Asia and Oceania70compliant with Indias anti-money laundering laws,and consequently asked the Ministry of Ele

230、ctronics andInformation Technology(MeitY)to block their URLs for India-based customers.However,contacts in theregion explained to us that users were still able to access these exchanges if they had previouslydownloaded the apps and that certain apps were still accessible for new downloads.Interestin

231、gly,theIndian think tank Esya Center analyzed the impact of blocking of the URLs on the digital asset market andfound it to be short-lived.These factors would explain the sustained activity following the December 2023 show cause notice,shownin the chart below.This chart measures the total value rece

232、ived by the nine blocked exchanges comparedto the total value received in India.Similarly,Vikram Rangala,Executive Director of ZebPay,an India-based cryptocurrency exchange andwallet provider,told us that he did not anticipate that the FIUs blocking order would last long,andexpressed hope that India

233、s vibrant crypto and Web3 ecosystem would benefit from additional regulatoryclarity.“Now were seeing that offshore exchanges will soon be brought into this emerging ecosystem.Earlier,we had a flight of investors away from Indian exchanges to global exchanges because of hightaxes.I hope that,with reg

234、ulatory clarity,well also get a more workable tax arrangement that promotesinnovation,and brings all aspects of crypto and Web3 into the economy in a sustainable way.There are alot of brilliant Indian crypto startups.When they are finally given a healthy environment to work in,I thinktheyll unleash

235、magic.Think 100 Polygons and more.”Central&Southern Asia and Oceania71The good news is that Indias path to crypto adoption is becoming clearer,due to continued engagementbetween the industry and regulators.A significant indicator of this change is the FIUs recent decision to liftBinances seven month

236、 block,following Binances registration as a reporting entity,allowing the exchangeto re-enter the Indian market.Although this shift is more recent and not reflected in the above data,welook forward to seeing how Indias crypto market develops in the coming years.Singapore sees recent interest in cryp

237、to merchant servicesFor the past several years,Singapores crypto market has been primarily institutionally-driven,but thistrend appears to be shifting.As we see below,year-over-year growth by transfer size has been the mostsignificant for retail and professional investors.It is possible that more fa

238、vorable market conditions incomparison to the previous years conditions have motivated these investors to increase their participation.Additionally,as we will explore in more detail below,Singaporean regulators efforts to increase consumerprotection rules may have given retail and professional inves

239、tors more confidence to enter or re-enter themarkets.A notable aspect of Singapores crypto market is the growing adoption of crypto as a payment method fora variety of services.For instance,Singapore-based startup dtcpay enables merchants to accept paymentsin cryptocurrency.More recently in March 20

240、24,Singapore-based super-app Grab,which offers access totaxi services,food deliveries,and other similar conveniences,began accepting top-ups to its e-wallet viacryptocurrencies.Users are now able to make payments in Bitcoin,Ether,Singapores local currencystablecoin XSGD,Circle USD,and Tether.Central

241、&Southern Asia and Oceania72Additionally,momentum for crypto payments appears to be picking up.In the second quarter of 2024,thetotal value in crypto received by merchant services in Singapore reached nearly$1 billion significantlyhigher than any other quarter in the past two years.This trend of cry

242、pto payments is interesting in amarket where retail fiat payment systems are already highly efficient,as it hints at the ubiquity of cryptoholdings among the population.The steady local adoption of XSGD tells another interesting story.XSGD is issued by StraitsX,holder of aMajor Payments Institution

243、license in Singapore(MAS).More than 75%of XSGD value transferred duringthe time period studied took place in sizes of$1 million or below,with almost 25%of transfers under$10,000,suggesting a strong base of retail activity.In contrast,other stablecoins pegged to the U.S.dollarare mainly transferred i

244、n large sizes of above$1 million,suggestive of institutional activity.Central&Southern Asia and Oceania73Central&Southern Asia and Oceania74Since the third quarter of 2022,the transfer value of XSGD has been steady,with most quartersexperiencing activity of more than$200 million.In addition to Singa

245、porean merchants adopting crypto,the countrys recent regulatory clarity may bebolstering confidence in stablecoins.For instance,in August 2023,MAS finalized its stablecoin regulatoryframework,which includes new requirements for stablecoin issuers,and details segregation and custodyprocedures for cus

246、tomer assets.Additionally,Singapores central bank implemented crypto custody andlicensing requirements in April 2024.This combination of regulatory clarity and merchant adoptionsuggests that Singapore is positioning itself as a major hub for digital assets,which could eventuallyattract more global b

247、usinesses and investors.Trading opportunities drive Indonesias crypto marketWhile other countries in the CSAO region,such as Singapore,are seeing crypto adoption fueled byregulatory progress and merchant services,Indonesias market is particularly dynamic and showcasescryptos diverse use cases beyond

248、 the typical.Indonesia is one of the fastest-growing crypto markets in theregion and has the highest year-over-year growth at nearly 200%.It appears that much of this activity is driven by trading.According to Indonesias Commodity FuturesTrading Regulatory Agency,2024 has seen a recent surge in cryp

249、tocurrency transactions,the number ofcrypto investors located in the country,and interest in meme coins.Central&Southern Asia and Oceania75To learn more about crypto growth in Indonesia,we spoke to Barry Matthew Meyer,Product Manager atPintu,an Indonesia-based crypto exchange company whose main offe

250、ring is trading.“I believe Indonesiasgrowing crypto market is primarily due to the novelty of crypto and the promise of quick profits manypeople still see crypto as a speculative financial instrument,”he explained.“A lot of people right now areflocking to Telegram groups to provide and look for trad

251、ing signals,similar to what they have been doing inequities for quite some time.However,crypto activity is more intense because there are a lot of newtokens.”Meyer also explained that the Indonesia Stock Exchanges recent introduction of full call auction(FCA)measures may be driving people to move to

252、 crypto.“The exchange is imposing more strict rules for astock to be considered,which has affected users sentiments on the Indonesian stock market and iscausing them to look for alternative trading vehicles.”This activity is reflected in our data.As the below chart illustrates,more than a third(43.0

253、%)of valuereceived by local exchanges in Indonesia came from transfers of$10,000 to$1 million in size,suggestingthat these flows may have been driven by professional trading activity.Indonesia also has a higher shareof transfers of$1,000 to$10,000 than any of the top countries in terms of cryptocurr

254、ency value received.Indonesias burgeoning Web3 market has also produced interesting trends during the time period studied.As we see in the chart below,Indonesia has a higher share of both decentralized exchange(DEX)anddecentralized finance(DeFi)activity than those of other countries in the region,as

255、 well as the globalaverage.Central&Southern Asia and Oceania76According to Asih Karnengsih,Executive Director of Asosiasi Blockchain Indonesia,a non-profitorganization dedicated to fostering blockchain development,adoption,and education,“As understandingof crypto assets improves in Indonesia,more us

256、ers are exploring advanced platforms and services.Thistrend has led to the rise of the crypto degen community,where members actively participate in yieldfarming,staking,and various token projects on DeFi platforms.”As is the case in many countries around the world,these alternative investment opport

257、unities attractyoung adults interested in emerging technologies and ways to make quick profits.Millennials and Gen Zusers reportedly comprise more than 50%of Indonesias current investor base.“We believe that thisinterest presents a vibrant market for innovation and new technologies,”said Karnengsih.

258、“Associations including our own local exchanges,and the government frequently conduct educational programs atIndonesian universities,further fueling interest and knowledge among these young investors.We placegreat emphasis on encouraging young talent to explore blockchain,which helps them become mor

259、einformed and confident in navigating the crypto market,fostering a dynamic and innovative investmentlandscape in the country.”Central&Southern Asia and Oceania77Eastern AsiaCentral&Southern Asia and Oceania78Eastern Asia:Institutions Drive Adoptionin South Korea and Hong KongEastern Asia is the six

260、th largest cryptocurrency economy in the world this year,accounting for 8.9%ofglobal value received between July 2023 and June 2024.The region received more than$400 billion inon-chain value during the same time period.Eastern Asias share of cryptocurrency transaction value has remained relatively s

261、table during the timeperiod studied with no significant fluctuations.Eastern Asia79Eastern Asia80Similar to all other regions in this report,centralized exchanges are the most popular service category inEastern Asia,accounting for 64.7%of cryptocurrency value received.Most of this activity was drive

262、n by large transfers suggestive of institutions and professional investors.Notably,Eastern Asia accounts for the largest share of professional-sized transfers compared to any otherregion studied in this report.There is a stark contrast between the services used by professional investors and those us

263、ed byinstitutional investors.As we see below,professional investors primarily used centralized exchanges(CEXes),whereas institutional investors used decentralized exchanges(DEXes)and other decentralizedservices(DeFi).We speculate that institutional investors often seek investment strategies that cap

264、italize onmarket inefficiencies;DEXes typically offer more arbitrage opportunities than CEXes due to their diverseasset coverage.Eastern Asia81Eastern Asia includes five of the 50 highest grassroot adopters of cryptocurrency around the world:SouthKorea(19),China(20),Japan(23),Hong Kong(29),and Taiwa

265、n(40).Below,well explore in detail what isdriving crypto adoption in these countries.Eastern Asia82South Korea remains Eastern Asias largest marketSouth Korea leads the Eastern Asia region in terms of cryptocurrency value received,at approximately$130 billion during the time period studied.Since the

266、 first quarter of 2023,South Koreas share of transaction value in Eastern Asia has also beensteadily increasing.We spoke to a leader at a top South Korean crypto exchange who speculates thatseveral factors have contributed to this growth:“Mistrust in traditional financial systems has led investorsto

267、 seek out cryptocurrencies as alternative assets.The publics perception of crypto as a viable investmentoption has been further solidified by adoption of blockchain by major corporations like Samsung and largeenterprises in the region that are working to enhance operational transparency and efficien

268、cy.”Eastern Asia83A leader at another South Korea-based exchange provided us with more insights into these trends:“As atop IT nation,the Republic of Korea provides easy access to digital asset trading through mobile apps andPCs.The general populations interest in crypto has grown,especially after Bi

269、tcoin surpassed$70,000 inJanuary 2024.”This uptick in trading activity is evident in numerous places more specifically withaltcoins and stablecoins.Altcoins,which South Koreans mainly use to trade with the Korean Won(KRW),have accounted for higher outflows to global exchanges than any other crypto a

270、sset.The increase instablecoin outflows beginning in December 2023 shown in the below chart coincides with the USDTlistings on major Korean exchanges,such as Coinone and Bithumb.Eastern Asia84Eastern Asia85After altcoins,Bitcoin(BTC)is the second most traded cryptocurrency with the Korean Won.“Rippl

271、e has been very popular in Korea since 2017 when it was expected to replace the SWIFTinternational remittance system,”the leader from the second exchange noted,referring to the internationalmessaging system for international payments and settlements.“We attribute this popularity to Ripplesvery fast

272、transfer speed of about two seconds,and its relatively low price per unit compared to BTC andETH.”In terms of actual trading strategies,it appears that South Koreans often use local exchanges to on-rampand move funds to global exchanges,which provide access to diverse assets,arbitrage opportunities,

273、margin,and off-ramping.The volume of funds transferred from these local exchanges to global exchangesis highly correlated with the Korean Premium index,indicating arbitrage opportunities.The leader from the first exchange explained,“The kimchi premium refers to the phenomenon where pricesof cryptocu

274、rrencies in South Koreas market are higher compared to global markets.This is primarily due tohigher demand within South Korea relative to global markets.The Kimchi premium exhibits volatilitydepending on market conditions and regulatory changes,making it a popular phenomenon amongtraders.”Notably,t

275、he kimchi premium soared in March 2024 when Bitcoin reached a new all-time high.Source:CryptoQuantThe burgeoning interest in altcoins and diverse trading opportunities described above signals a robustfuture for South Korea as a regional leader in cryptocurrency innovation.As well explore shortly,thi

276、sinterest,as well as supportive regulatory frameworks in other regions,could further acceleratecryptocurrencys prominence across Eastern Asia.Eastern Asia86Hong Kong may finally influence China to re-open itsdoors to cryptoAs weve explored in previous years,China has had a tumultuous relationship wi

277、th crypto,marked bynumerous crackdowns and regulatory changes.Despite being an early hub for crypto mining and trading,Chinas government increasingly imposed stringent restrictions on permissionless crypto activity,citingconcerns over financial stability,fraud,and capital flight.These actions led to

278、 broad-based restrictions oncrypto-related business activities in China in 2021,and have undoubtedly led to a decrease in overallcrypto-related web traffic visits to trade-related services coming from China,beginning in mid-2020.Regardless,Hong Kong has emerged as a crypto hub in the Greater China r

279、egion,where regulatorsopenness to crypto and decisiveness in laying down a regulatory framework have furthered institutionaladoption.Hong Kong is not an independent country,but rather a Special Administrative Region of Chinawith a distinct legal and regulatory framework.Its unique status allows more

280、 flexibility to foster financialinnovation,which is why we treat it separately from mainland China in this report.Unsurprisingly,Hong Kong has experienced the largest year-over-year growth in Eastern Asia at 85.6%,and ranks 30th in the world on our global crypto adoption index.Eastern Asia87Below,we

281、ll look at some recent trends in mainland China and Hong Kong.Chinese citizens use crypto to preserve wealthAfter the Chinese government shut down access to mainstream crypto exchanges in 2021,users began tolook elsewhere,turning to over-the-counter(OTC)platforms and P2P trading networks.If we look

282、at aselection of China-based OTC platforms,we see tremendous growth,particularly since mid-2023.Many ofthese platforms have capitalized on the enduring interest in crypto among Chinese investors and foundinnovative ways to facilitate crypto trading,and some have adapted to the regulatory environment

283、.Eastern Asia88We spoke to Ben Charoenwong,associate professor of finance at INSEADs Asia Campus,to learn moreabout the role of crypto in Chinas economy.“The general sentiment toward the Chinese economy has beennegative,so people are looking for ways to move money out of the country.Around fifteen y

284、ears ago,people used Swiss banks and smaller-tier banks to do this,both of which have stopped providing theseservices.So,people put their money into local investments because there was nowhere to go,”he told us.“Nowadays,if you want to move money out of China through traditional unofficial means lik

285、e using mules,fees can be as high as 25 to 30 percent.The increasing use of OTC crypto in China suggests that peopleare looking for faster options to move money.”Charoenwong also noted that,post-COVID,downward shifts in the property market motivated Chinesecitizens particularly those who are wealthy

286、 to immediately purchase luxury goods and crypto in anattempt to secure their assets.We can see these trends below.As the Chinese real estate market tumbled,more funds flocked into crypto through OTCs,most notably at the end of 2023.We visualized this trend bylooking at the price of the China Vanke,

287、which is one of the largest real estate developers in China with asubstantial influence on the countrys urbanization and housing market.Eastern Asia89Eastern Asia90The same pattern holds true when we look at the relationship between inflows to crypto OTCs and adecline in the Shanghai composite index

288、,which measures stocks traded at the Shanghai Stock Exchange.“Crypto is a way to preserve wealth when things are uncertain and mitigate the effects of authoritarianismin China,”said Charoenwong.“Its a question of property rights.”Hong Kongs supportive regulatory frameworks fuel institutional adoptio

289、nIn June 2023,Hong Kongs securities regulator implemented a new regulatory regime for virtual assettrading platforms(VATPs).This regime provides a regulated path for retail investors to access crypto,butalso lays out stringent prudential,consumer protection,and AML/CFT standards.Over the past year,r

290、egulators in Hong Kong have been working to implement this new regime.May 31,2024 marked the end of the transitional period to this new regime,meaning that exchanges couldonly operate in Hong Kong if they were licensed or“deemed”to be licensed.Several popular exchanges,whose local affiliates withdre

291、w their license applications ahead of May 31,have therefore had to ceaseproviding trading services to Hong Kong residents.Given that their volume had been in the hundreds ofmillions of dollars since 2022,these developments may spark a shift toward licensed or“deemed”exchanges,or decrease activity as

292、 a whole.As we see below,the share of value received by theseexchanges has experienced a steady decline with recent activity hovering around 10 to 15%.Eastern Asia91Stablecoins accounted for more than 40%of total value received by Hong Kong each quarter;this will likelygrow as the Hong Kong Monetary

293、 Authority(HKMA)s regulatory framework comes into force,as regulatedstablecoins will be permitted for offering to retail investors in Hong Kong.On April 30,2024,Hong Kongs financial regulator,the Securities and Futures Commission(SFC),approvedthree Bitcoin and three Ether-based spot Bitcoin ETFs to

294、start publicly trading.A month before this launch,we saw a significant increase in institutional Bitcoin transfers,many of which occurred on mainstreamexchanges working with institutional-facing businesses.Eastern Asia92Kevin Cui,Chief Executive Officer of OSL,a leading digital asset trading platfor

295、m in Hong Kong that offersinstitutional-grade services for cryptocurrency trading,explained how these ETFs have impacted themarket.“As market conditions improve,we are seeing indications of a growing institutional interest thatcould lead to increased capital inflows in the near future.These ETFs hav

296、e not only provided a regulatedpathway for investment in digital assets,but have also spurred interest in direct holdings in BTC and ETH.This shift is significant,as it marks a transition from traditional financial instruments toward more directengagement with digital assets,reflecting a broader acc

297、eptance and understanding of their potentialwithin the institutional investment community.”Eastern Asia93Middle East&North AfricaEastern Asia94Middle East&North Africa:RegulatoryMomentum and DeFi Fuel AdoptionThe Middle East&North Africa(MENA)region ranks as the seventh-largest crypto market globall

298、y in 2024,with an estimated$338.7 billion in on-chain value received between July 2023 and June 2024,accountingfor 7.5%of the worlds total transaction volume.Middle East&North Africa95Although the market is smaller compared to other regions,MENA includes two countries ranked in the top30 of the glob

299、al crypto adoption index:Trkiye(11th)and Morocco(27th),capturing$137 billion and$12.7billion of value received,respectively.The majority of crypto activity in MENA is driven by institutional and professional-level activity,with 93%ofvalue transferred consisting of transactions of$10,000 or above.Mid

300、dle East&North Africa96Centralized exchanges(CEXs)remain the primary source of crypto inflows across MENA overall,indicatingthat most users and institutions still prefer traditional crypto platforms,but decentralized platforms andDeFi applications are steadily gaining traction,as seen in the heatmap

301、 below.Middle East&North Africa97Notably,Saudi Arabia and the UAE demonstrate high interest in decentralized platforms.The majority ofDeFi activity across MENA occurs on DEXs,with Saudi Arabia participating in other DeFi activities at amarginally higher share than the other nations shown.Saudi Arabi

302、a,a G20 economy with a population ofover 30 million,benefits from a disproportionately young population around 63%of its citizens are under30 years old.This demographic is especially meaningful from an emerging technology perspective,asyounger generations tend to be more open to experimenting with n

303、ew financial technologies.The UAE alsoshows higher DeFi adoption than the global average,likely attributable to its progressive regulatory stancewhich has fostered clarity around specific classes of crypto participation.The UAEs proactive andcollaborative regulatory approach to crypto and web3 compa

304、nies has attracted a diverse range of users,and solidified the UAE as a hub for DeFi and broader crypto activity.In contrast,users in Trkiye and Qatarremain heavily reliant on CEXs,with lower DeFi participation compared to global averages.Its important to note that both Saudi Arabia and Qatar do not

305、 yet have a comprehensive regulatoryframework in place for virtual asset service providers(VASPs)and therefore do not yet have local CEXs,but encouraging new developments in Qatar that allow companies to apply for a license to become tokenservice providers could reshape the landscape in the future.B

306、eyond fostering innovation,DeFi offers an alternative financial system for the unbanked andunderbanked,which is critical for a region where less than 50%of adults,excluding high-incomeeconomies,had a bank account as of 2021.While DeFi adoption may not yet be widespread in some ofthese regions,its ab

307、ility to provide financial services without intermediaries could drive future financialMiddle East&North Africa98inclusion,opening up new opportunities for individuals in underserved areas,and empowering them withaccess to loans,savings,and investment tools previously unavailable.Regulatory strides

308、made across key markets in the region in 2024 are likely to further shape thedistribution of DeFi and CEX platforms,impacting financial inclusion and the broader adoption ofdecentralized financial systems.Stablecoins and altcoins making gains across MENAAcross MENA,stablecoins and altcoins are gaini

309、ng market share over traditionally preferred assets likebitcoin and ether,particularly in Trkiye,Saudi Arabia,and the UAE,which have higher shares ofstablecoin volume.For example,in Trkiye,which has a long history of economic instability and high inflation,retail usersreliance on stablecoins reflect

310、s their concerns over volatility and a need for consistent stores of value which we detail further down.In contrast,in the UAE,where the local currency(the Emirati dirham)ispegged to the U.S.dollar,the growing adoption of stablecoins likely reflects their popularity as an on-rampto broader crypto se

311、rvices and trading.Ether(ETH)usage across the region is relatively consistent,but falls below the global average,with Trkiyeleading in engagement.Meanwhile,Israel and Saudi Arabia demonstrate a strong interest in altcoins,wellabove the global average,possibly reflecting a higher risk appetite and in

312、terest in a wider variety of assetsMiddle East&North Africa99beyond the major cryptocurrencies.Last year,Israel completed a successful government bond tokenizationpilot,aligning with broader industry interest surrounding tokenized assets a sector which McKinseypredicts could reach$4 trillion by 2030

313、.Clear regulation drives a balanced crypto ecosystem in the UAEThe UAE continues to experience rapid growth in the crypto space,driven by a combination of regulatoryinnovation,institutional interest,and expanding market activity.Between July 2023 and June 2024,theUAE received over$30 billion in cryp

314、to,ranking the country among the top 40 globally in this regard andmaking it MENAs third largest crypto economy.Unlike most countries globally,the UAEs crypto activity is growing across all transaction size brackets,signaling a more balanced and comprehensive adoption landscape.The country also boas

315、ts a diversified crypto ecosystem,with significant activity beyond CEXs,includingDeFi.Middle East&North Africa100The total value received by DeFi services,including DEXs,grew by 74%compared to last year,and thatreceived by DEXs alone grew by 87%,from an estimated$6 billion to$11.3 billion.Middle Eas

316、t&North Africa101Crypto investments are also expanding quickly as numerous VC funds and blockchain businesses set upshop in the UAE including Chainalysis,which debuted its regional headquarters in Dubai this May.Tether,the issuer of the worlds most traded cryptocurrency,also recently announced plans

317、 to launch astablecoin pegged to the Dirham.“Traditional financial institutions such as banks are actively exploring their roles within the cryptoecosystem,showcasing the growth of a crypto-TradFi nexus,”noted Arushi Goel,Head of Policy for theMiddle East and Africa at Chainalysis.“This engagement i

318、s further supported by a robust and evolvingregulatory framework.”Indeed,as global crypto markets rebound,governments are working towards crafting regulatoryframeworks that balance innovation with necessary safeguards.The UAE is at the forefront this effort,with various regulatory authorities across

319、 its Emirates developing tailored approaches.At the federal level,the Securities and Commodities Authority(SCA)regulates virtual assets services,while the Central Bank ofthe UAE(CBUAE)oversees payment token services.Additionally,the two financial free zones the DubaiInternational Financial Centre(DI

320、FC)and Abu Dhabi Global Market(ADGM)operate independentfinancial regulatory regimes,each with its own distinct virtual asset asset framework.Dubais Virtual Assets Regulatory Authority(VARA)is also playing a critical role in this regulatoryexpansion.Established in 2022 as the worlds first standalone

321、regulator for virtual assets,VARA is not onlyshaping the local market,but also attracting global attention.Deepa Raja Carbon,Managing Director and Vice Chairperson of VARA,spoke with Arushi Goel about theunique position VARA occupies as a regulator two years after its creation.“Weve identified over

322、athousand entities conducting crypto-related activity within Dubai and were working through a legacytransition.Over the next year,we expect to see these entities licensed,”she explained,adding that VARAsapproach is one of collaboration rather than blind enforcement.Both the industry and regulators c

323、ome tothe table with that perspective to learn together and evolve,she said,stressing the importance ofbalancing market protection with innovation.VARAs influence extends well beyond Dubai,as its regulatory framework sets a precedent for otherjurisdictions.The UAE is actively positioning itself as a

324、 world leader in emerging technologies,makingsubstantial investments in artificial intelligence(AI)and other advanced technology sectors to solidify itsreputation as a global innovation hub.This strategic focus further amplifies its impact on the cryptoecosystem,where VARAs collaborative innovation-

325、focused approach is setting the tone.“Its a fascinatingtime to be involved as a regulator,”added Carbon.“Youre able to witness game-changing ideas,while alsoproviding the framework for them to be tested and brought to market more quickly than in a traditionalsandbox.”Middle East&North Africa102In Tr

326、kiye,stablecoins and high consumer engagementpropel market maturationTrkiye ranks as the largest crypto market in MENA and seventh globally,receiving$136.8 billion in valuebetween July 2023 and June 2024.This robust activity is fueled by an ecosystem defined by a strong presence of local CEXs and in

327、creasingexpansion by global platforms,with 76 CASPs having declared their intent to comply with the regulatoryregime,as of the date of this publication.Additionally,as we covered in last years report,Trkiyes high inflation rate,which has hovered near orabove 50%for the past year,has driven much of t

328、he countrys crypto adoption.Amidst this high inflation,citizens have turned to cryptocurrencies particularly stablecoins and altcoins to hedge againstcurrency devaluation and seek higher returns.Middle East&North Africa103Crypto trading volume on order books can provide valuable insight on the popul

329、arity of a given asset.Trkiye is number one in the world,by a large margin,in stablecoin trading volume as a percentage of GDP.Its important to note this measure is not saying that nearly 4%of Turkish GDP is stablecoins,but thatstablecoin trading volumes on CEXs are equal to 4%of GDP in dollar equiv

330、alent terms,meaning cryptotrading volumes could one day exceed a countrys measure of GDP.Stablecoins consistently represent the majority of crypto assets purchased with the Turkish Lira,approaching nearly$6 billion in purchases in March of this year.As we see in the chart below,stablecoinpurchases w

331、ith the Turkish Lira are closely correlated with inflation rates.11The sharp surge in stablecoin purchases in March 2024 was likely driven by broader market activity,particularly the impact ofbitcoin recording a new all-time high price.This milestone may have spurred an increase in demand for stable

332、coins,as tradersand investors sought liquidity for crypto transactions.Middle East&North Africa104This mirrors a broader trend we have observed over the years in regions with monetary instability,wherethe demand for non-volatile assets,such as the U.S.dollar and dollar-pegged stablecoins,is high.To

333、gain further insight into Trkiyes crypto landscape,we spoke with Francisco Maroto,Head ofBlockchain at Banco Bilbao Vizcaya Argentaria(BBVA),a Spanish multinational financial servicescompany with a presence in Trkiye.Maroto emphasized that Trkiyes crypto adoption is largelycustomer-driven,estimating that 40%to 50%of the population is engaged in crypto.This high adoptionrate is linked to the need f