Ethereum NFTs Are Driving Crypto Adoption in Central and South Asia: Report

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NFTs have become the biggest cryp­to on-ramp for coun­tries in Cen­tral and South­ern Asia, as well as Ocea­nia, accord­ing to a report from Chainal­y­sis on Wednesday. 

The blockchain ana­lyt­ics firm not­ed that, in Q2 2022, 58% of web traf­fic from these coun­tries to cryp­to ser­vices was NFT-related.

NFTs are unique blockchain-based tokens that are used to rep­re­sent own­er­ship over oth­er dig­i­tal or phys­i­cal items. These tokens are fre­quent­ly trad­ed as spec­u­la­tive col­lectible items, but may also pro­vide addi­tion­al func­tion­al­i­ty and ben­e­fits to their holders.

The mar­ket for NFTs explod­ed with­in the last two years. Sales for these dig­i­tal assets reached $23 bil­lion in 2021 and are on pace to break that record this year, even though the NFT mar­ket has cooled in the sec­ond half of 2022. NFT col­lec­tions like Cryp­toP­unks and Bored Apes have helped make dig­i­tal col­lectibles mainstream—and, accord­ing to Chainal­y­sis, the NFT boom has been par­tic­u­lar­ly impact­ful in broad­en­ing cryp­to adop­tion in Cen­tral and South­ern Asia. 

The ana­lyt­ics firm not­ed that anoth­er 21% of traf­fic to cryp­to ser­vices was relat­ed to play-to-earn blockchain games, which reward play­ers with cryp­tocur­ren­cies and often inte­grate NFTs into their game­play. Chainal­y­sis sus­pects that the cor­re­la­tion is like­ly no coincidence.

“For coun­tries with high web traf­fic to NFT marketplaces—especially Thai­land, Viet­nam, and the Philippines—a large por­tion of that NFT-relat­ed traf­fic may there­fore come from play­ers of blockchain games,” the report said.

Blockchain games like Axie Infin­i­ty have been par­tic­u­lar­ly pop­u­lar in the Philip­pines, though these games have seen a con­sid­er­able drop in users in recent months as cryp­to prices have col­lapsed. In terms of cryp­to adop­tion in the region, the Philip­pines is sec­ond only to Vietnam.

Over­all, Chainal­y­sis found that cit­i­zens in the region received a total of $932 bil­lion in cryp­tocur­ren­cy val­ue from July 2021 to June 2022. That makes it the third-largest cryp­to mar­ket that the com­pa­ny has indexed.

Besides NFTs and play-to-earn games, cryp­tocur­ren­cy is also grow­ing pop­u­lar as a remit­tance tool in these regions, accord­ing to the firm. “Pak­istan, India, and Bangladesh each have $20+ bil­lion remit­tance mar­kets, and blockchain-based pay­ment providers are begin­ning to dis­rupt tra­di­tion­al inter­me­di­aries.” the report noted.

Con­sis­tent with the pop­u­lar­i­ty of remit­tance pay­ments and NFTs, the two most active­ly trad­ed cryp­to assets in these coun­tries are sta­ble­coins, Ethereum, and Wrapped Ethereum.

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