Written by: Tiger Research Reports
Compiled by: Deep Tide TechFlow
Key Takeaways
India continues to lead the world in cryptocurrency adoption, thanks mainly to its strong institutional participation and regulatory adjustments, although it also faces challenges such as high taxes and temporary exchange bans.
Indonesia has surged from 7th to 3rd place in the global cryptocurrency adoption rankings. This growth is driven primarily by increased usage of decentralized exchanges, active institutional trading, and local regulations encouraging blockchain innovation.
Southeast Asia showcases diverse cryptocurrency application scenarios. Singapore leads in stablecoin adoption and merchant services, the Philippines focuses on play-to-earn games and remittances, while Vietnam prioritizes peer-to-peer exchanges.
1. Introduction: The Dynamic Shift in Cryptocurrency Adoption
Southeast Asia and India have become global leaders in cryptocurrency adoption. The region has emerged as a hub for blockchain activity, a trend supported by grassroots user engagement, growth in professional trading, and increased institutional interest. As decentralized finance (DeFi) and centralized exchanges (CEX) expand globally, Southeast Asia is not only keeping pace but often leading the way in cryptocurrency development.
Chainalysis's Global Cryptocurrency Adoption Index highlights the region's significant impact on the Web3 industry. Malaysia and Singapore continue to lag behind other Southeast Asian nations in cryptocurrency adoption, while Cambodia has achieved a 13-spot leap. Indonesia currently ranks third, demonstrating rapid growth in cryptocurrency adoption, in contrast to slight declines in Vietnam, the Philippines, and Thailand.
2. Comparison of Key Changes Between 2023 and 2024
Chainalysis calculates the index based on four core factors: 1) the value rankings of received centralized services, 2) the value rankings of received retail centralized services, 3) the value rankings of received DeFi, and 4) the value rankings of received retail DeFi.
This report provides an in-depth analysis of the four factors influencing the Global Cryptocurrency Adoption Index while offering insights into the changes occurring in Southeast Asia and India's cryptocurrency market. The report compares key changes between 2023 and 2024 and explores the potential factors driving these changes in adoption indices.
2.1 India: The Cryptocurrency Giant
India continues to hold the top position in the Global Cryptocurrency Adoption Index for 2023 and 2024, further solidifying its leadership in the cryptocurrency space. While India's centralized service metrics remain stable, the DeFi metrics have seen a slight decline due to increased activity from other countries. Notably, Indonesia and Nigeria are rapidly accelerating their cryptocurrency adoption, with Nigeria completing over $30 billion in DeFi transactions last year.
Despite some changes in the centralized service metrics, the overall impact remains limited. For example, in December 2023, India's financial intelligence agency issued notices to nine offshore exchanges, including Binance, indicating forthcoming regulatory action. Subsequently, the Ministry of Electronics and Information Technology (MeitY) began implementing URL blocks to restrict Indian users' access.
However, a report from the Esya Center suggests that the impact of these blocks is short-lived as users continue to access exchanges through pre-downloaded apps, with some apps remaining downloadable even after government bans.
Tax policies remain unchanged, imposing a 30% tax on cryptocurrency capital gains and a 1% withholding tax (TDS) on all transactions, yet trading activity remains robust. By 2025, India's position in the blockchain space is expected to further develop with the rollout of the National Blockchain Framework (NBF) by MeitY in 2024. This government-supported initiative utilizes permissioned blockchain technology aimed at enhancing the security, transparency, and trust of public services.
Current support still primarily focuses on structural applications rather than investment incentives, as tax policies are expected to remain unchanged. Therefore, participants in India's crypto market are calling for tax reductions in the 2024-25 budget to create a more favorable investment environment. However, the impact of these measures on the cryptocurrency adoption index, particularly in terms of investment factors, remains uncertain.
2.2 Indonesia: A Surge in Cryptocurrency Participation
Indonesia has made significant progress in the Global Cryptocurrency Adoption Index, rising from 7th place in 2023 to 3rd in 2024, with notable improvements in both centralized services and DeFi rankings. The continued growth of centralized services this year may further enhance its ranking in the coming years.
According to Chainalysis data, Indonesia shows rapid growth compared to other Southeast Asian countries. In 2023, Indonesia achieved a 207.5% increase. This growth is primarily driven by centralized exchanges like Indodax and Tokocrypto, benefitting from stricter listing rules at traditional stock exchanges. Users’ trading preferences have shifted from traditional markets to alternative options like cryptocurrencies.
A detailed analysis of local exchanges' trading volume reveals that over a third (43.0%) of the trading amount falls between $10,000 and $1 million. Moreover, Indonesia exceeds any other country in the proportion of transfers between $1,000 and $10,000. The high proportion of these mid-to-large trades indicates that professional traders dominate Indonesia's cryptocurrency market.
The rapid growth in the DeFi sector is largely attributed to Indonesia’s young and tech-savvy population. Millennials and Gen Z are particularly eager to try decentralized financial solutions. The active participation of this young demographic means decentralized exchanges account for 43.6% of the country's trading volume, reflecting a preference for financial systems that can break free from traditional banking constraints.
To improve cryptocurrency adoption rates in the future, the current tax regime needs reform. Indonesia imposes a 0.1% income tax and a 0.11% value-added tax on all domestic cryptocurrency transactions. These high rates limit the growth of centralized services, leading more individuals to turn to harder-to-regulate DeFi. Adjusting taxes to more reasonable levels could significantly boost Indonesia's cryptocurrency adoption rate.
2.3 Vietnam: Sustained Growth Amid Economic Uncertainty
Vietnam's ranking in the Global Cryptocurrency Adoption Index has dropped from 3rd place in 2023 to 5th place in 2024. This is primarily due to pressure from regional competitors like Indonesia, which have accelerated institutional adoption and established clearer regulatory frameworks. Although Vietnam has seen a slight improvement in its centralized services ranking, it has stagnated in the DeFi sector, indicating a slower pace of Web 3 development.
The main reasons for Vietnam's drop in rankings include: 1) intense competition from neighboring Southeast Asian countries, 2) a lack of large-scale institutional participation in the Vietnamese market, and 3) slow regulatory progress supporting the crypto industry. Unlike Indonesia, which actively promotes blockchain and crypto innovation through regulatory measures, Vietnam appears hesitant in formulating new policies and easing strict regulations to foster industry growth.
Vietnam's strict policies include restrictive regulations on cryptocurrency advertising and a lack of a clear exchange licensing framework. This regulatory ambiguity has led to capital and talent flowing to countries with friendlier crypto environments, impacting Vietnam's ranking in the global index.
Despite facing these regulatory and institutional challenges, grassroots cryptocurrency adoption in Vietnam remains strong. This growth is primarily driven by active participation in peer-to-peer (P2P) exchanges and DeFi platforms. According to a report by Triple-A, approximately 21.2% of Vietnamese people own cryptocurrency, ranking second in global cryptocurrency ownership rates. Vietnam's DeFi usage is also high, accounting for 28.8% of trading volume, indicating the country's reliance on decentralized platforms for financial transactions under strict capital controls. This grassroots engagement emphasizes the crucial role of cryptocurrencies in bridging the financial services gap for individuals and small businesses.
While Vietnam's strong retail adoption indicates a vibrant crypto community, the lack of supportive regulations remains an obstacle to sustainable growth. If clearer policies are not enacted to attract institutional participation and promote DeFi development, Vietnam may fall further behind in regional competition. However, with its large cryptocurrency-holding population and high DeFi participation, Vietnam still has the potential to maintain a significant position in the crypto ecosystem if it accelerates regulatory reforms.
In light of this demand, the Vietnamese Ministry of Information and Communications and the NEAC recently launched a national blockchain strategy to accelerate the digital transformation across industries. This move positions Vietnam to potentially become a regional leader in blockchain innovation by 2030, demonstrating a strategic commitment to long-term growth.
2.4 Philippines: Play-to-Earn Models and Remittances Drive Cryptocurrency Adoption
Despite the Philippines' active engagement in cryptocurrencies, its ranking in the Global Cryptocurrency Adoption Index has dropped from 6th in 2023 to 8th in 2024. This decline is mainly due to the country's increased reliance on centralized exchanges (CEX), which accounted for 55.2% of its trading value in 2024, slightly up from the previous year. While the Philippines excels in CEX, its progress in DeFi and institutional trading is relatively slow, posing challenges for maintaining competitiveness compared to countries like Indonesia that have made advancements in institutional adoption and regulatory clarity.
The Philippines views play-to-earn (P2E) gaming and remittances as the main applications for cryptocurrencies. In 2023, P2E gaming and gambling accounted for 19.9% of total web traffic, indicating the country's focus on this niche market rather than broader DeFi adoption. This focus positions the Philippines as a leader in P2E gaming and remittances, but its growth potential is limited compared to countries that diversify their crypto ecosystems.
Additionally, the regulatory environment in the Philippines lacks comprehensive policies for DeFi and institutional crypto development. Nonetheless, the Philippines' unique strengths in P2E gaming and remittances allow it to continue playing a significant role in Southeast Asia's cryptocurrency landscape, although there is still room for improvement in regulatory and institutional development.
2.5 Thailand: Stable Regulation but Decreasing Adoption Rates
Thailand's crypto market, although its ranking in the cryptocurrency adoption index has dropped from 10th in 2023 to 16th in 2024, continues to evolve. This decline in ranking is primarily due to the decreased value of centralized services, despite stable retail activity reflecting a decline in institutional participation. Additionally, DeFi activity has also decreased significantly. Given that Thailand's per capita GDP purchasing power parity growth rate is only 1.4%, the second-lowest in the region, this decline in ranking is particularly concerning.
The main reason for the drop in rankings is the decrease in active crypto trading accounts following the Terra-Luna incident, which also affected DeFi participation. Additionally, the political ban on pro-crypto figure Pita Limjaroenrat raises questions about his future influence on Thailand's crypto market, which may affect the regulatory environment and public acceptance of cryptocurrencies.
It is important to note that Chainalysis's rankings consider adjustments for per capita GDP purchasing power parity. Without these adjustments, Thailand's crypto market size would appear larger than several other countries. Thailand has a solid regulatory foundation and has recently taken steps to encourage institutional participation, indicating government recognition of the industry. Initiatives such as the digital asset sandbox program represent significant progress in integrating digital assets within a structured regulatory framework.
2.6 Cambodia, Singapore, and Malaysia
As countries that are not in the top 20 of the index, Cambodia, Singapore, and Malaysia show different ranking changes due to their respective strategies toward the crypto industry.
Cambodia has risen 13 places in the 2024 Global Cryptocurrency Adoption Index, ranking 17th, primarily due to its performance in centralized service usage. While the specific reasons remain unclear, it may be related to growing local interest in cryptocurrencies and potential illicit activities. By the end of August 2024, Chainalysis researchers noted that the platform Huione, owned by Hun To, was involved not only in crypto scams but also allegedly engaged in over $49 billion of crypto black market transactions since 2021. This continued involvement in the gray areas of cryptocurrency may have attracted significant capital inflows to Cambodia.
Singapore has risen from 77th to 75th place in 2024, reflecting its efforts in regulatory transparency, institutional adoption, and crypto-friendly merchant services. The stablecoin XSGD saw trading volumes exceed $1 billion in Q2 2024, driven by platforms like dtcpay and Grab. The Monetary Authority of Singapore's (MAS) regulatory progress, including the introduction of a stablecoin framework and strengthened cryptocurrency custody rules, has enhanced Singapore's attractiveness as a safe, regulated crypto environment.
Malaysia has dropped from 38th to 47th place, primarily due to increasing competition in the Southeast Asian region. However, Malaysia remains committed to the development of Web3 and blockchain. Despite slow progress in institutional adoption and DeFi expansion, Malaysia is positioning itself as a Web3 gaming hub through various initiatives. In particular, the collaboration announced by MDEC, EMERGE Group, and CARV at the IOV2055 workshop aligns with the country's digital transformation goals.
3. Conclusion: The Changing Cryptocurrency Landscape in Southeast Asia and India
Southeast Asia and India continue to lead the world in grassroots cryptocurrency adoption. Despite regulatory challenges, India maintains its lead in innovation and institutional participation, while countries like Indonesia are rapidly catching up. The surge in DeFi activity in Indonesia and its favorable regulatory environment reflect shifts in the cryptocurrency power dynamics in the region.
The Philippines and Vietnam remain key cryptocurrency markets, each with its focus. The Philippines primarily relies on gaming and remittance applications, while Vietnam depends on P2P exchanges and decentralized trading. Singapore's transition toward retail and merchant crypto applications further demonstrates the diversity of use cases in the region. In contrast, the decline in rankings for Thailand and Malaysia reflects the intense market competition.
Looking ahead, the regulatory dynamics in these countries will have a profound impact on cryptocurrency adoption in Southeast Asia and India. The increasing institutional adoption and strong grassroots participation underscore the region's position as a key hub for global digital assets.