New Chainalysis crypto adoption report reveals that Nigeria has taken back the lead in terms of crypto adoption in Africa, ranking #11 in the world, with an adoption score of 0.521. Kenya, last year’s leader, comes in third in Africa with an adoption score of 0.397, ranking #19. Both nations have improved significantly in their adoption score with Nigeria gaining 100.39%, from a 0.26 index score in 2021 and Kenya, gaining 41.79%, from an index score of 0.28 in 2021.
Although we have seen improvements in both countries’ scores, however, their rankings have significantly dropped as both are now out of the top 10 rankings compared to last year, when Kenya and Nigeria ranked 5th and 6th respectively. As previously mentioned, in this year’s ranking, Nigeria now ranks 11th and Kenya now ranks 19th. Taking second place is Morocco, which ranks 14th, with an index score of 0.507.
The Chainalysis cryptocurrency adoption report ranks countries by focusing on five major indexes which includes; On-chain cryptocurrency value received at centralized exchanges, weighted by purchasing power parity (PPP) per capita, On-chain retail value received at centralized exchanges, weighted by PPP per capita, Peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and number of internet users, On-chain cryptocurrency value received from DeFi protocols, weighted by PPP per capita, and On-chain retail value received from DeFi protocols, weighted by PPP per capita.
What you should know
On the ranking methodology, the report stated, “In order to calculate our sub-indexes, we estimate countries’ cryptocurrency transaction volumes for different services and protocols based on the web traffic patterns of those services’ and protocols’ websites. Relying on web traffic data means that usage of VPNs and other products that mask online activity but given that our index takes into account hundreds of millions of transactions, VPN usage would need to be extremely widespread to meaningfully skew our data.”
The report also mentioned that its report did not rank the countries in question-based on raw cryptocurrency transaction volume, which would give a straightforward view of where the most cryptocurrency activity is happening. It also mentions, “While institutional activity is important to that, we also want to highlight the countries where individual, non-professional investors are embracing digital assets the most.”
Looking deeper into the compositions that make up the overall rankings and index score, Nigeria ranks #18 in centralized service value received ranking, #18 in retail centralized service value received ranking, #17 in P2P exchange trade volume ranking and #20 in DeFi value received ranking. Data on on-chain retail value received from DeFi protocols was not available.
Kenya on the other hand ranks #43 in centralized service value received ranking, #43 in retail centralized service value received ranking, #5 in P2P exchange trade volume ranking and #9 in DeFi value received ranking. Data on on-chain retail value received from DeFi protocols was not available.
Kenya had Nigeria beat when it comes to P2P exchange trade volume ranking and DeFi value received ranking. This means in terms of P2P transactions, Kenya leads Africa. However, Kenya falls significantly short when it comes to centralized service value received and retail centralized service value received.
A shocking entry into the list is Morocco, which did not rank among the top 20 in 2021. The country now ranks the second largest in Africa when it comes to cryptocurrency adoption in Africa and ranks #14. Diving deeper, the country ranks #19 in centralized service value received ranking, #19 in retail centralized service value received ranking, #21 in P2P exchange trade volume ranking and #33 in DeFi value received ranking. Data on on-chain retail value received from DeFi protocols was not available.
Rest of the world
Looking at the generally top 20 list, the emerging markets continue to dominate the index, a trend that started in last year’s ranking. Using the World Bank’s income level and overall development ranking categories, which ranks countries into; high income, upper middle income, lower middle income, and low income, we find out that the lower middle income and upper middle income dominate the top 20 index.
Out of our top 20 ranked countries, 10 countries are lower middle income; Vietnam, Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya, and Indonesia, 8 are upper middle income; Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia, and Ecuador, and 2 are high income; United States and United Kingdom.
The report explained, “users in lower middle and upper middle-income countries often rely on cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and fulfill other financial needs unique to their economies. These countries also tend to lean on Bitcoin and stablecoins more than other countries.”
As stated above, this is the case for African nations, particularly Nigeria, where the use of cryptocurrency has become a means to hedge against inflation, especially with the consistent devaluation of its native currency, the Nigerian Naira, which has seen its black-market rate sour over ₦700 to one United States’ dollar.
Looking at other countries, it is interesting to see that for the second consecutive year, Vietnam is ranked first in cryptocurrency adoption. The report explains that the sub-rankings shows that Vietnam as a nation shows extremely high purchasing power and population-adjusted adoption across centralized, DeFi, and P2P cryptocurrency tools.
Other sources have also noted Vietnam’s love of cryptocurrency. Polling done in 2020 found that 21% of Vietnamese consumers reported using or owning cryptocurrency, second only to Nigeria at 32%, and the adoption rate has likely only grown since then. Reports from local media suggest that the people of Vietnam have taken a great interest when it comes to cryptocurrency-based gaming, including games following the play to earn (P2E) and move to earn (M2E) models, are particularly popular in the Southeast Asian country.
The United States moved up to fifth in the index rankings from eighth in 2021. The U.S. ranks in the top three of each sub-index, with the exception of population and purchasing power-adjusted P2P exchange usage, where it ranks much lower at 111th. The report stated, “This isn’t surprising, as our research shows that P2P exchange usage tends to be highest in countries with low purchasing power. Perhaps most interesting is the fact that the United States is by far the highest-ranked developed market country on our index, and one of only two to make the top 20 along with the UK.”
China re-entered the top ten of the ranking index this year after placing 13th in 2021. The sub-indexes show that China is especially strong in usage of centralized services, placing second overall for purchasing power-adjusted transaction volume at both the overall and retail levels. This comes along the same time the Chinese government took a hard stance and cracked down on cryptocurrency activity in the country, which includes a ban on all cryptocurrency trading announced in September 2021. The reported explained, “Our data suggests that the ban has either been ineffective or loosely enforced.”
Below is the list of African Countries and their respective index scores and rankings;
Ranking Against the rest of the world
Ranking in Africa
Crypto Adoption Index Score
All other African countries not listed, do not have an index score.
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