The report, issued last month, states that the cryptocurrency ecosystem has grown by 2,300% between September 2019 and June 2021, and that the Covid-19 pandemic was one of the main catalysts for this growth.
Venezuela Among Countries With Most Crypto Adoption
A report issued by the United Nations Conference on Trade and Development has found that Venezuela ranks third among the countries with the most cryptocurrency adoption, only behind Russia and Bulgaria. The report, which also deals with the causes of this growth and crypto regulation, found that 10.3% of citizens in Venezuela held cryptocurrencies.
Russians were second on the list, with 11.9% of the population holding crypto, while Ukraine ranked first, with 10.7% of its citizens holding some kind of crypto. This can be explained by the economic situations these countries are facing and the swings their currencies are experiencing due to conflict.
The report also shows that developing countries have been more receptive to the cryptocurrency proposition. Of the first 20 countries with the most adoption, 15 are qualified as developing countries under United Nations standards.
Reasons for Growth
The study also tries to explain the reasons that have made crypto grow so much in these developing countries. The document notes that the Covid-19 pandemic played an important part in the adoption of crypto. It states:
The use of cryptocurrencies was an attractive channel, in terms of price and speed, through which to send remittances. During the pandemic, the already high costs of traditional remittance services rose even higher during lockdown periods due to related disruptions.
The second reason that propelled this growth has to do with the view that citizens of these countries have about crypto as a useful tool to hedge their savings. This is why countries like Argentina and Venezuela, which have faced tough inflationary periods, are ranked high in cryptocurrency adoption reports.
This expansion has also fueled a regulatory response from governments in the area. Venezuela already has a fairly clear cryptocurrency legal framework, that establishes bitcoin and crypto mining as legal activities. Russia and Ukraine are in the process of also establishing clear rules for the use of crypto.