A Chainalysis report revealed South Korea and Hong Kong are witnessing booming cryptocurrency usage.
A recent Chainalysis report indicates that Eastern Asia is witnessing spiking crypto usage, especially related to stablecoins and cross-border transactions. This surge has been linked to institutional and professional investors, considering the size of each transaction. While institutional investors mostly rely on decentralized exchanges (DEXs) and DeFi protocols, professional ones harness centralized exchanges (CEXs).
“Eastern Asia is the sixth largest cryptocurrency economy in the world this year, accounting for 8.9% of global value received between July 2023 and June 2024. The region received more than $400 billion in on-chain value during the same time period,” Chainalysis’ report read.
Source: Chainalysis
Volumes witnessed by centralized exchanges dominated their decentralized counterparts and other protocols, marking 64.7% of all value received in the region. This ties in with professional investors using CEXs, and the report mentioned how professional-sized transfers were the largest in East Asia compared to any other region it studied.
The reason for institutional investors turning to DEXs and DeFi protocols, as opposed to their professional counterparts, stems from decentralized offerings providing greater arbitrage opportunities.
South Korea and Hong Kong Take Crypto Usage to the Next Level
Within East Asia, South Korea dominated fund flows as it singlehandedly received a whopping $130 billion in the period the report considered. Since early 2023, South Korean crypto transaction value has only increased. One executive from an unnamed crypto exchange explained the rising usage to Chainalysis, saying, “As a top IT nation, the Republic of Korea provides easy access to digital asset trading through mobile apps and PCs.” They added, “The general population’s interest in crypto has grown, especially after Bitcoin surpassed $70,000 in January 2024.”
Hong Kong, not too far from South Korea, has also witnessed tremendous crypto adoption. The special administrative region experienced the greatest year-to-year growth, according to Chainalysis’ Global Crypto Adoption Index released in early September. That bolsters Hong Kong’s ambitions to become a top crypto hub globally as it makes strides in the regulatory front to attract institutions and businesses. Nearly 40% of the value received by Hong Kong residents and businesses in crypto was through stablecoins.
