There is no question that 2020 has been the year for crypto adoption. Continued economic uncertainty, primarily due to COVID-19, has encouraged a piqued interest in digital currencies across the globe, even in some unexpected regions. Volatile local currencies and economies have provided the drive and opportunity for many in India, Turkey, and Ukraine to seek alternative financial solutions.
Currencies past, present, and future
It’s looking increasingly likely that, after a pandemic-stricken year, the rupee will end 2020 as the worst performing currency in Asia.1 However, many Indians had already lost faith in the rupee back in 2016, when Prime Minister Narendra Modi banned 86% of the local currency overnight.2 Added to that is the lingering fear of depositing cash in banks – three major deposit-taking banks have crumbled in the last 15 months.3 The build-up of these events has provided Indians with a growing initiative to invest in cryptocurrency by becoming traders, technical analysts, and crypto influencers.
The Turkish lira, recently described by John Hopkins University professor, Steve Hank, as “toast” on Twitter, has also suffered from long-term instability, paving the way for many to turn their interests to trading in digital currency.4 Most recently, COVID-19 has driven uncertainty into the Turkish government, resulting in a sharp fall of the Turkish lira against most global currencies. Turks, however, have found hope in crypto, with a survey this year reporting that 16% of the country own and use digital currency.5
Though the Ukranian hryvnia has recovered somewhat since Russia’s annexation of the Crimean Peninsula in 2014, there is still a long way to go, especially with COVID-19 still rampant. A relatively new currency, the hryvnia suffered a huge hit, and Ukraine is still relying on financial aid from the US and the EU as it strives to become part of the West.6 A largely tech-savvy country, mass crypto adoption has come to be seen as a much-needed financial solution, even by the Ukrainian government.7
Rates that keep growing
While India’s crypto trading volumes have grown by 500% since March,8 a recent Chainalysis report ranked Turkey as the country with the highest crypto transaction volume in the Middle East.9 In a similar vein, according to Chainalsysis, Ukranians are the most active retail users of digital currencies globally.10
Ukraine, which has largely flown under the radar of the global crypto community, sent $8.2 billion worth of cryptocurrency and received $8 billion worth between July 2019 and June 2020.11 These numbers are supported by Ukraine’s first crypto exchange, Kuna, who reported that they receive $800,000 worth of retail crypto trades daily.12 Local exchanges in India have also published some impressive numbers: WazirX, India’s largest exchange, grew 400% in March 2020 and 270% in April 2020 on a month-over-month basis.13 Even more remarkable, Paxful reported 883% growth in India between January to May 2020, from around $2.2 million to $22.1 million.14 If more proof of India’s exponential growth in crypto adoption is needed, Coinswitch, who launched its India business, CoinSwitch Kuber, in June, reported that Indian users made up over 15% of their total volume, with 400,000 customers signing up in 4 months.15
Though there is some contention regarding the accurate crypto adoption rate in Turkey, the growth in trading volume on numerous global exchanges speaks for itself.16 Paxful reported that new registrations on its platform had increased by 274% between October 2019-2020, with the company stating that it sees “massive potential for crypto adoption in the region”.17 A spike in trade volume was also announced recently by CoinTelegraph Turkey, with daily volume occasionally going over $200 million.18
Though India, Turkey, and Ukraine may not be the first countries that spring to mind when hearing the words “digital revolution”, the momentous growth rate has far surpassed many other nations throughout the world.
Know that this is just the beginning
Something else these regions have in common is their lack of crypto regulation. While both Turkey and Ukraine have secure plans to enact regulations in the near future, with the latter already securing its first successful legislative effort,19 the Indian government regularly fluctuates between wanting to ban crypto and wanting to regulate it.20 In order to reap the full revenues of crypto adoption, India will have to recognize crypto as a currency first.
With such enormous volumes of crypto adoption and trading in 2020, there is no doubt these regions are on the right track for a booming year to come, especially with continued support from their respective governments. In addition, with an ever-growing number of on/off-ramping platforms in these regions, those that still are still unsure about how to enter the world of crypto (and there are many, especially in India), will have numerous simple, easily accessible ways to do so.
It is not by chance that these regions have seen such vast crypto adoption numbers this year. With COVID-19 exasperating already volatile currencies, economies, and political landscapes, looking into digital finance alternatives has been the logical step for these countries. As crypto adoption continues to advance, there is growing opportunity for these regions to boost their economies along with closer regulation of the crypto market.