November 28, 2022

A new report has found that non-fungible tokens (NFTs) may be the biggest driver of crypto adoption in Central and South Asia and Oceania (CSAO).

as In the September 21 Chainalysis titled “Cryptolusion Steadies in South Asia, Soars in the Southeast,” NFT-related actions accounted for 58% of all web traffic to crypto services from this region in the second quarter of 2022.

Meanwhile, another 21% of this quarter’s traffic went to for-profit (P2E) blockchain gaming websites, with major titles including Axie Infinity, STEPN and Battle Infinity.

Chainalysis notes that P2E blockchain games are “inextricably linked” to NFTs, with most P2E games featuring in-game items in the form of NFTs that can be sold on markets like MagicEden and OpenSea, which means:

“NFTs are perhaps the biggest increase in CSAO’s crypto trend today.”

CSAO countries include India, Thailand, Vietnam, Australia, Singapore, the Philippines and Indonesia, among 25 other countries, and is home to seven of the top 20 countries in Chainalysis’s Crypto Adoption Index.

According to a heatmap of web traffic, NFT-related websites accounted for the majority of web traffic in nearly every country in the CSAO region, although blockchain gaming and entertainment also saw a significant share of traffic.

Heat map of web traffic in the regions of Central and South Asia and Oceania. Source: Chainalysis

Chainalysis notes that this is “not necessarily surprising: CSAO is a hub for innovation in blockchain-based entertainment,” adding:

“Game-based blockchain developers Polygon and Immutable X are headquartered in India and Australia, for example, and Axie Infinity and STEPN, the two largest play-for-profit games, are based in Vietnam and Australia, respectively.”

Vietnam topped the Chainalysis cryptocurrency adoption index for the second year in a row, but the Philippines surprisingly emerged second after being ranked 15th in the latest report.

“Both countries have similar growth engines: play-for-profit (P2E) games and remittances,” explained the blockchain analysis firm.

On the other hand, traffic to websites on other topics, such as decentralized exchange contracts, has declined in recent quarters, according to Chainalysis — said to be likely linked to the bear market and the ongoing crypto winter.

Related: Emerging Markets Top Global Adoption Index: Chainalysis . Report

The report also touched on cryptocurrency adoption in India and Pakistan, noting that while both ranked second and third in terms of cryptocurrency adoption worldwide in 2021, the countries this year fell to fourth and sixth positions, respectively.

Recent regulatory developments are listed as potential reasons for the change.

In January, the Central Bank of Pakistan and the government recommended a ban on cryptocurrency, while the Indian government imposed a 30% tax on all crypto gains in April and an additional 1% fee on each crypto transaction in July.