• Tue. Jul 23rd, 2024

Crypto Adoption Explodes In Brazil And India, What Does The Future Hold?

Crypto Adoption

There is a rapid growth rate of crypto adoption in Brazil and India. Analysts believe that the 2021 crypto market bull run has pushed more people in these two countries to acquire a variety of assets to either balance their portfolios against any financial crisis or escape poverty.

In India, millennials are flocking to cryptocurrency trading and shunning investments in the stock markets. Most of the young people living in smaller Indian cities are turning to cryptos like Solana, Bitcoin, Cardano, and Ethereum, as highlighted by the Economic Times that cited data from Indian cryptocurrency trading app CoinSwitch Kuber.

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These figures show that 25-55% of the young users who make up a total of 11million users on the platform live in cities outside of Mumbai and New Delhi. Based on a statement by Sharan Nair, CoinSwitch Kuber’s chief business officer, millennials appear to prefer cryptos over stocks because they have grown up on the internet. Sharan stated:

“Many are techies like us who like to solve problems in the crypto world by contributing code. What can they do as shareholders of a bank whose website they don’t like?”

Data gathered from crypto exchanges that operate in India shows that investors from these small urban areas are investing significantly in Bitcoin and other major altcoins.

Related: Armoney Recommends Only the Following Cryptocurrencies in India

Most of these young investors are possibly deriving their inspiration from different social media platforms. Also, the aggressive marketing methods adopted by the operators in the crypto industry are attracting the Indian youth to try their hand in the nascent sector.

Concurrently, the effects of the COVID-19 pandemic have compelled people to venture into cryptocurrency seeking to improve their lives that were ravaged by the health crisis. So far, digital assets have emerged as a dependable hedge against instances of economic crisis.

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Reports indicate that cryptos in the Asia subcontinent are perceived to be similar to mutual funds, which are preferred by older investors.

India Is Second On Global Crypto Adoption Index, Chainalysis Data

A new report published on October 4, 2021, by Chainalysis stated that crypto usage in Pakistan, Vietnam, and India ranked at the top of the Global Crypto Index. In India and Vietnam, crypto usage is similar to gambling. However, crypto investment was seen to be considerably mature in India with Ethereum adoption also picking speed in the country.

Western countries and the European Union might be leading in crypto regulation currently. Nonetheless, the rate of crypto adoption has been surging rapidly in Central and Southern Asia and Oceania (CSAO). The new report from Chainalysis also shows that the Philippines and Thailand appear in the top 15 spots on the Crypto Adoption Index.

The CSAO market is currently the fourth biggest crypto market in the world. Based on the Chainalysis report from earlier this month, it pegged up to $572.5 billion in crypto value between July 2020 and July 2021. That represents, 14% of the global transaction value within that period. Chainalysis stated in a blog post:

“CSAO’s transaction activity grew by 706% compared to last year in terms of raw value, and its share of global cryptocurrency activity grew by 2%, making CSAO one of the fastest-growing of all the regions we study.”

Cryptocurrency Adoption Keeps Growing In India

The Indian market is much bigger than the rest in the region dominated by “high levels of grassroots cryptocurrency adoption”. Furthermore, it records a bigger segment of activity happening on several decentralized finance (DeFi) platforms. Notably, India recorded 59% of its cryptocurrency activity from the DeFi platforms compared to 47% in Vietnam and 33% in Pakistan.

Related: MRHB DeFi and Coinsbit India Partner to Bring Halal Crypto to India’s 200 Million Muslims

DeFi growth is great news for developing countries like India. The applications use technology to introduce more accountability to crypto and blockchain-based lending platforms and investment schemes.

In that context, they are believed to be easier for the regulators to accept than mere crypto trading activities. For example, it enabled the US Securities and Exchange Commission (SEC) to approve a cryptocurrency-based fund called Arca in July 2020.

Chainalysis noted that DeFi adoption grew by 641% in India. This increased adoption rate has resulted in the growing use of Ethereum in India since a majority of the DeFi apps are currently powered by the Ethereum blockchain.

Transaction sizes in India are big, with the large institutional-sized transfers of more than $10 million worth of crypto representing 42% of all the transactions recorded from the Indian-based addresses.

India’s Cryptocurrency Regulation

The rapid increase in the number of crypto investors comes after small efforts of enacting viable regulations. These friendly laws have now enabled operators like CoinSwitch Kuber to grow their network within the nation in 18 months. CoinSwitch Kuber has managed to attract funding from venture capitalist Andreessen Horowitz.

Even though India is among the countries trying to develop a clear crypto regulation infrastructure, operators in the industry are convinced that the government will implement the right measures. Investors believe that the government has no choice but to accept the crypto sector since it might have a major positive impact on the Indian economy.

Related: India Lifts Crypto Ban, South Korea Imposes New Rules and the US Remains Stagnant

The growing consideration of crypto investment in India shows the general adoption atmosphere of digital assets in the nation. Based on Kantar’s research, nearly 83% of the urban Indians know cryptocurrencies, while around 16% own them.

Brazilians Acquire $4 Billion Worth Of Crypto In 2021

Another country that is involved in massive crypto adoption like India is Brazil. The Brazilian residents have acquired considerable amounts of cryptos even as the South American nation aims to implement new laws to regulate the crypto industry.

Based on Bruno Serra’s data seen by Finbold, the nation’s central bank confirmed that residents have acquired $4.27 billion worth of cryptos in 2021. The biggest amount of crypto was bought in May in the wake of bitcoin surging to reach the then all-time high of around $65,000. In that month, residents acquired $756 million worth of crypto.

In January, residents bought $419 million in crypto while August saw $496 million worth of cryptos purchased by Brazilians. The least amount of cryptos was acquired in March standing at around $357 million.

What Is Pushing Brazil’s Crypto Investment?

The value of the cryptos that are purchased indirectly shows the role that digital assets play in a country’s economy. More people around the world are now turning to nascent investment space after the pandemic resulted in the debasement of most of the national currencies.

Related: Coinqvest Partners with nTokens to Bring Enterprise Cryptocurrency payment Processing to Brazil

Brazil’s economy is languishing in the wake of inflation, hyperinflation cycles, and deflation. This economic crisis has pushed crypto to become a major hedge to cushion the residents against losses.

Most of the crypto purchases are believed to be serving the huge unbanked population in the  South American country. Relying on digital assets like crypto is sensible for the population that seeks amens of financial inclusion. The crypto industry does not have any stipulated entry conditions or barriers.

Moreover, Brazil’s youthful population is believed to be a force behind the increased rate of crypto adoption. The younger generation around the world is leading the way in the rate of cryptocurrency adoption. Notably, these huge Brazilian investments correlate with the crypto bull market that has seen the value of the industry grow to surpass $2.6 trillion in market capitalization.

Brazil To Adopt Bitcoin As Legal Tender

The debate for digital assets adoption in Brazil came up several years ago. Currently, the government seems to be nearing the final plans to adopt crypto with the help of the Central Bank.

Aurero Ribeiro, Brazil’s Federal Deputy, said in an interview on October 3 that Brazilians can soon buy properties, cars, and McDonald’s with Bitcoin once its law is approved. Ribeiro believes that the approval will happen soon.

The commission met and then voted for the approval of this opinion in recent weeks. This bill is awaiting the next stage, which is the plenary of the Chamber of Deputies. Ribeiro insisted that he is happy with the approval of the Bitcoin law since it will help prevent the set up of crypto pyramids that seem imminent currently.

According to the Deputy, the Brazilian market is sustainable. He declared the move to recognize Bitcoin as legal tender to be sustainable and innovative in an industry that is already functional globally. Cryptocurrency is here to stay. Therefore, crypto adoption seems inevitable in the future. He stated:

“We want to separate the wheat from the chaff, create regulations so that you can trade, know where you are buying, know who you are dealing with, and have this asset to buy a house, a car……It will be a currency in the country as it happens in other countries.”

Bitcoin valuation exceeds all returns on the assets that are listed on the stock exchange. In general, Bitcoin might be adopted as a legal tender in Brazil before the end of 2021. This highlights Brazil’s strategy towards becoming a leader in the world of new foreign investments.

Brazil’s Cryptocurrency Regulation Efforts

Crypto adoption in Brazil comes after speculation that the South American nation wants to follow in the lead of El Salvador to recognize Bitcoin as legal tender. But, legislators in the country are debating on a bill that aims to regulate the industry.

Related: Brazil Watchdog Tells Crypto Exchanges to Answer Questionnaire or Face a Fine

The bill combats the perennial hiccups of scammers that are linked to the crypto adoption efforts. Interestingly, Brazil is not going in the way of the jurisdictions that have gone ahead and implemented tough crypto regulations.

Cryptocurrency proponents are convinced that positive legislation will eventually push the price of Bitcoin higher. The biggest cryptocurrency is currently consolidating around $66,000.

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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.