Central and South Asia and Oceania (CSAO) is the third largest cryptocurrency market this year, with citizens of CSAO countries receiving $932 billion worth of crypto from July 2021 to June 2022. CSAO is also home to seven of the twenty largest countries. In this year's index: Vietnam (1), Philippines (2), India (4), Pakistan (6), Thailand (8), Nepal (16) and Indonesia (20).
Later in this section, we will analyze the main drivers and barriers to the mainstream adoption of cryptocurrencies in these countries. But first, let's look at CSAO as a whole.
India continues to lead the CSAO in terms of crypto activity, having received $2021 billion worth of crypto from July 2022 to June 172. They are followed by Thailand, Vietnam, Australia and Singapore, each of which received more than $100 billion. However, they are less interested in crypto Central Asian countries such as Uzbekistan; and Oceanian island nations such as the Maldives.
Today, NFTs are perhaps the biggest route to cryptocurrencies in CSAO. 58% of web traffic from CSAO IPs to cryptocurrency services in Q2022 21 was related to NFTs; another XNUMX% were on Play-to-Earn crypto gaming websites.
Today, in most crypto games, items have NFT value, such as Axie's pets Axie Infinity or running shoes STEPWOMEN, which can be resold on various marketplaces such as MagicEden and OpenSea. Thus, in countries with high web traffic in NFT markets, especially in Thailand, Vietnam and the Philippines, a large part of the NFT may come from players playing crypto games.
As you can see from the above heatmap, NFT related websites account for the majority of web traffic in almost every CSAO country, but in most of these countries, the second largest share is for blockchain games and entertainment.
CSAO is the center of innovation in blockchain-based entertainment. For example, the headquarters of blockchain developers focused on games, Polygon и Immutable X are headquartered in India and Australia, and Axie Infinity и STEPWOMEN, the two largest earning games, operate in Vietnam and Australia.
However, traffic on sites that are related to contracts and decentralized exchanges has decreased recently. This is probably due to the bear market in general. Manan Vora, Senior Vice President of Operations and Strategy for a Singapore-based wallet infrastructure provider liminal, said that this is indeed the case. The collapse of UST played a big role in undermining confidence in the crypto market. When a top 10 token drops to zero, it becomes very difficult to get people to believe and stay in the market.
Now that we've covered the CSAO crypto markets, let's take a look at the most active countries in the region.
Introduction of P2E games and money transfers in Vietnam and the Philippines
For the second year in a row, Vietnam ranks first in crypto adoption. The Philippines, meanwhile, made a giant leap from 15th to second. Both countries have a similar growth rate for crypto games and money transfers.
It is worth noting the scale of P2E implementation, in particular, in these two countries. Estimated, 25% of Filipinos and 23% of Vietnamese played games to make money and at one point, Filipino players made up 40% of players Axie Infinity. Interestingly, the studio that developed Axie Infinity, Sky mavis based in Vietnam.
Vietnam and the Philippines are major remittance markets, with inflow of remittances accounts for 5% and 9,6% of their respective national gross products. According to Manan Vora, cryptocurrencies, and especially stablecoins, help overcome the barrier in cases where users do not have access to traditional banking services, and money transfer services such as Western Union ask for a large commission. Why pay 3% to a bank intermediary and wait two days for the funds to arrive when USDT/USDC arrive within a minute with a minimal commission.
The same thesis about remittances resonates in other countries as well. CSAO. Pakistan, India and Bangladesh have over $20 billion in remittance markets and blockchain payments begin to displace traditional intermediaries.
As shown in the chart above, stablecoins and ETH/WETH are the most traded assets in many CSAO countries, in line with the remittance and NFT based adoption model.
Rules of India and Pakistan
In the 2021 crypto ranking, it was found that the citizens of India and Pakistan ranked second and third in the world in terms of the number of crypto users. In 2022, they dropped to fourth and sixth places. Recent changes may give us the answer.
India
1 April 2022 Government of India introduced 30% tax for all profits from cryptocurrency, while users could not compensate for their losses. Then, on July 1, the government introduced a 1% transaction deduction at source (TDS), which means that crypto users have to pay an additional 1% fee for each transaction. This led to a big brain drain, first to Singapore and now to Dubai.
Pakistan
In January 2022, the central bank and government of Pakistan recommended to ban cryptocurrency. Since then the federal government formed three subcommittees to further discuss this issue and, ultimately, to propose their own crypto policy. It remains to be seen whether the implemented policy will be as restrictive as the proposed ban.
Other issues further complicate the adoption of Pakistani crypto. The country has been greylisted by the Financial Action Task Force (FATF) since 2018, undermining its ability to receive international financial assistance and hardening the government’s anti-crypto sentiment. Governor of the State Bank of Pakistan (SBP) Reza Bakir did in February statementthat the potential risks associated with cryptocurrencies "far outweigh the benefits" and cited "expanding shadow economy" and "capital flight" as major concerns. Given the current civil unrest in Pakistan, the former prime minister was charged under the anti-terrorism law, but he is still one of Pakistan's most popular leaders.
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