A new report finds that non-fungible tokens (NFTs) may be the biggest driver of crypto adoption in Central and South Asia and Oceania (CSAO).
According to a Wednesday post by Chainalysis titled “Cryptolusion Steadies in South Asia, Soars in the Southeast,” NFT-related actions accounted for 58% of all web traffic going to cryptocurrency services from this region in the second quarter of 2022.
Meanwhile, another 21% of traffic in the quarter went to for-profit (P2E) blockchain gaming websites, with headlines including Axie Infinity, STEPN, and Battle Infinity.
Chainalysis notes that P2E blockchain games are “closely related” to NFTs, as most P2E games feature in-game items in the form of NFTs that can be sold on marketplaces like MagicEden and OpenSea, which means:
“NFTs are perhaps the biggest increase in cryptocurrency trend in CSAO today.”
CSAO countries include India, Thailand, Vietnam, Australia, Singapore, the Philippines, and Indonesia, among 25 others, and are home to seven of the top 20 countries in the Cryptocurrency Adoption Index.
According to the web traffic heat map, NFT-linked websites accounted for the majority of web traffic in almost every country in the CSAO region, although blockchain games and entertainment also saw a significant share of the traffic.
Heat map of web traffic for the regions of Central and South Asia and Oceania. Source: Chainalysis
This “isn’t necessarily surprising: CSAO is a hub for innovation in blockchain-based entertainment,” Chainalysis notes, adding:
“Gaming-centric blockchain developers Polygon and Immutable X are headquartered in India and Australia, for example, and Axie Infinity and STEPN, the two largest play-for-profit games, operate in Vietnam and Australia, respectively.”
Vietnam topped the Chainalysis Cryptocurrency Adoption Index for the second year in a row, but the Philippines surprisingly emerged in second place after ranking 15th in the latest report.
“Both countries have similar growth drivers: play-for-profit (P2E) games and remittances,” explained the blockchain analysis firm.
On the other hand, traffic to websites related to other topics, such as decentralized exchange contracts, has declined in recent quarters, according to Chainalysis — which was said to be likely related to the bear market and the ongoing crypto winter.
Related: Emerging Markets Lead Global Adoption Index: Chainalysis Report
The report also touched on cryptocurrency adoption in India and Pakistan, noting that while they both ranked second and third in terms of cryptocurrency adoption worldwide in 2021, this year the two countries dropped to fourth and sixth, respectively.
Recent regulatory developments are listed as possible reasons for the change.
In January, the Central Bank of Pakistan and the government recommended banning cryptocurrencies, while the Indian government imposed a 30% tax on all cryptocurrency gains in April and an additional 1% fee on each crypto transaction in July.
