Non-fungible tokens (NFT) may be the biggest driver of cryptocurrency adoption in Central, South Asia and Oceania (CSAO), a new report has found.
According to per Chainalysis’ Sept. 21 post titled “Crypto Adoption Steadies in South Asia, Stoars in Southeast,” NFT-related events accounted for 58% of all web traffic to cryptocurrency services from the region in Q2 2022.
Meanwhile, another 21% of traffic in the quarter went to gaming websites (P2E) blockchain games with major titles including Axie Infinity, STEPN and Battle Infinity.
Chainalysis noted that P2E blockchain games are “intimately linked” to NFTs, as most P2E games contain in-game items in the form of NFTs that can be sold on marketplaces like MagicEden and OpenSea, meaning:
“NFTs are perhaps the biggest foray into cryptocurrency in CSAO today.”
CSAO countries include India, Thailand, Vietnam, Australia, Singapore, the Philippines, and Indonesia, among 25 others, and is home to seven of the top 20 countries in the Chainalysis Cryptocurrency Adoption Index.
According to the web traffic heatmap, NFT-related websites accounted for the majority of web traffic in almost all countries of the CSAO region, although blockchain games and entertainment also saw a significant share of traffic.
Chainalysis noted that this “isn’t necessarily surprising: CSAO is a hub for innovation in blockchain-based entertainment,” adding:
“Game-focused blockchain developers Polygon and Immutable X are headquartered in India and Australia, for example, and Axie Infinity and STEPN, two of the biggest playable games, are based in Vietnam and Australia.
Vietnam came out on top Chainalysis Cryptocurrency Adoption Index for the second year in a row, but the Philippines made a surprise appearance in second place after ranking 15th in the last report.
“Both of these countries have similar growth drivers: play-to-earn (P2E) games and remittances,” the blockchain analytics firm explained.
On the other hand, traffic to websites related to other entities, such as decentralized exchange contracts, has declined in recent quarters, according to Chainalysis — which it says is likely related to the bear market and ongoing crypto winter.
The message too touched on cryptocurrency adoption in India and Pakistan, saying that while both were the second and third largest adopters of cryptocurrency globally in 2021, the two countries have dropped to fourth and sixth this year.
Recent regulatory developments are cited as possible reasons for the change.
In January, central bank of pakistan and the government has recommended a ban on cryptocurrencies, while Government of India established 30% tax on all crypto profits in April and another 1% fee on every crypto transaction in July.