Nonfungible tokens (NFTs) could be the biggest driver of crypto adoption in Central, South Asia and Oceania (CSAO), a new report has found.
According to A Sept. 21 Chainanalysis post titled “Crypto Adoption Stades in South Asia, Sources in the Southeast,” NFT-related activities accounted for 58% of all web traffic to cryptocurrency services from the region in the second quarter of 2022.
Meanwhile another 21% of traffic this quarter went to play-to-earn (P2E) blockchain games websites, including major titles including Axie Infinity, STEPN and Battle Infinity.
Chainanalysis noted that P2E blockchain games are “closely related” to NFTs, as most P2E games feature in-game items in the form of NFTs that can be sold on marketplaces such as MagicEden and OpenSea, thus meaning:
“NFTs are probably the biggest on-ramp for cryptocurrencies in CSAO.”
CSAO countries include India, Thailand, Vietnam, Australia, Singapore, the Philippines and Indonesia, among 25 others, and seven of the top 20 countries in Channelalysis’ Crypto Adoption Index.
According to a web traffic heatmap, NFT-related websites accounted for the majority of web traffic in nearly every country in the CSAO region, although blockchain games and entertainment also saw a significant share of traffic.
Chainanalysis notes that this is “not necessarily surprising: CSAO is the center of 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 largest play-to-earn games, operate in Vietnam and Australia, respectively.”
Vietnam topped the Channelalysis cryptocurrency adoption index for the second year in a row, but the Philippines made a surprise appearance in second place after finishing 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 topics, such as decentralized exchange contracts, has declined in recent quarters, according to Chainanalysis — which it said is likely connected to the bear market and ongoing crypto winter.
Related: Emerging Markets Lead Global Adoption Index: Chainanalysis Report
The report also touched on crypto adoption in India and Pakistan, noting that both ranked as the second and third highest adopters of cryptocurrencies globally in 2021, with the two countries falling to fourth and sixth place respectively this year.
Recent regulatory developments have been 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 profits in April and an additional 1% fee on every crypto transaction in July.