Nonfungible tokens (NFTs) may be the biggest driver of crypto adoption in Central, Southern Asia and Oceania (CSAO), a new report has found.
According to a Wednesday Chainalysis post titled “Crypto Adoption 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 websites of play-to-earn (P2E) blockchain games, with major titles including Axie Infinity, STEPN and Battle Infinity.
Chainalysis noted that P2E blockchain games are “intimately 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, thus meaning:
“NFTs are perhaps the biggest on-ramp to cryptocurrency in CSAO today.”
CSAO countries include India, Thailand, Vietnam, Australia, Singapore, Philippines and Indonesia, among 25 others, and are home to seven of the top 20 countries in Chainalysis’ crypto adoption index.
According to a web traffic heatmap, NFT-related websites accounted for the majority of web traffic in almost every country in the CSAO region, though blockchain games and entertainment also saw a significant share of traffic.
Chainalysis noted this is “not necessarily surprising: CSAO is a hub for innovation in blockchain-based entertainment,” adding:
“Game-centric blockchain developers Polygon and Immutable X are headquartered in India and Australia, for example, and Axie Infinity and STEPN, the two largest play-to-earn games, are operated in Vietnam and Australia, respectively.”
Vietnam topped the Chainalysis cryptocurrency adoption index for the second year in a row, but the Philippines made a surprise appearance at second after ranking 15th in the last report.
“Both of these countries have similar growth drivers: play-to-earn (P2E) games and remittances,” explained the blockchain analysis firm.
On the other hand, traffic to websites related to other subjects, such as decentralized exchange contracts, has declined in recent quarters, according to Chainalysis — which it said is likely connected to the bear market and ongoing crypto winter.
The report also touched on crypto adoption in India and Pakistan, noting that while both ranked as second and third highest adopters of cryptocurrency worldwide in 2021, the two countries have fallen this year to fourth and sixth, respectively.
Recent regulatory developments are listed as possible reasons for the change.
In January, Pakistan’s central bank and government recommended a crypto ban, while the Indian government implemented a 30% tax on all crypto gains in April and an additional 1% fee on every crypto transaction in July.