The G20 summit was hosted in India this year. Interestingly it was also this very country that according to Chainalysis’ ‘2023 Global Crypto Adoption Index,’ placed the first position amongst all of the 154 nations, paving the road in the grassroots adoption of cryptocurrencies.
India was able to achieve this remarkable position by placing first position in 4 of the 5 analytic parameters considered for the 2023 index which are:
Centralized Service Value Received,
Retail Centralized Service Value Received,
DeFi Value Received
Retail DeFi Value Received.
It is an incredible achievement for the country noting the fact that it was in 4th rank last year. Aside from India, comes other developing countries such as Nigeria in second and Vietnam in third proving the fact that the number of people embracing cryptocurrency is expanding every day.
You now know that India placed the top position in crypto adoption according to the ‘2023 Global Crypto Adoption Index.’ But you may wonder what the Crypto Adoption Index is exactly.
In simpler terms, the Crypto Adoption Index is used to assess and identify countries where most of the citizen are adopting and putting a large amount of their share of wealth into cryptocurrency.
According to the blockchain data platform ‘Chainalysis,’ the Global Crypto Adoption Index uses five sub-indexes to measure a country’s everyday usage of cryptocurrency by its citizens. Each of these sub-indexes is based on a nation’s usage of different types of cryptocurrency services and weights the rankings by characteristics like population size and purchasing power, takes the geometric mean of each country’s ranking in all five, and then normalizes that final number on a scale of 0 to 1 to give every country a score that determines the overall rankings. The closer the country’s final score is to 1, the higher the rank.
The 5 sub-indexes as mentioned earlier include: Centralized service value received ranking, Retail centralized service value received ranking, P2P exchange trade volume ranking, Defi value received ranking and Retail Defi value received ranking.
In order to calculate the sub-indexes, the platform estimates countries’ transaction volumes for different types of cryptocurrency services and protocols based on the web traffic patterns of those services’ and protocols’ websites.
After it was held in India, the G20 summit noted a note-worthy development concerning the crypto world. 20 of the largest economies in the world, such as the US, UK, India, and more joined hands in making decisions that would be applicable globally.
One such decision includes the Crypto Asset Reporting Framework (CARF), which would allow governments to gain access to cryptocurrency transactions and their participants in their respective nations. Also, it includes another important decision- the Common Reporting Standard (CRS) will also be amended to improve and systematize the reporting of taxes on crypto yields.
Set to fully function by 2027, the framework will include the exchange of information regarding data on crypto transactions each year. This will most likely focus on keeping tabs on the transactions taking place on unregulated cryptocurrency exchanges alongside wallet service providers.
It should also be taken into note that details, which also includes the beneficiaries' names, digital ledger addresses, and account number, will become attainable to governments. This will help ensure a surge in transparency and regulation along with much easier identification of the user of a crypto transaction.
This decision seems had an interesting impact on Bitcoin, one of the biggest cryptocurrencies in the world.
Bitcoin network found that there was an increase in the new addresses formed in a day’s 24 hours leading to 265k. This resulted in the second-highest single-day growth in addresses in Bitcoin's history and also the highest in five years.
The weekly average illustrated the increase to a 30% rise. This was a positive sign for Bitcoin.
Though the new transparency initiative seems to have had some positive impacts there are still some concerns that users are likely to worry about.
Crypto-assets, in contrast to traditional financial products, are able to be transferred and held without the interference of traditional financial intermediaries, such as banks, and any other central administrator.
However, with the launch of the new initiatives, there will be no anonymity of the user, as they will now have to submit their KYC for identification.
Perhaps we have seen some positive gains in the crypto adoption index taking into consideration the global crypto G20 initiatives, that sprung optimism for the future of crypto amongst investors. However, it is still too early to predict this, as some of its drawbacks may seem unattractive to new users.