Russia and the United States may soon compete for the title of world leaders in cryptocurrency adoption. This is revealed by a research published on the sector research site, Statista, entitled Digital Assets: Market Data & Analysis.
According to the data, Russia could have 38.5 million crypto users by 2027. Compared to the 19.3 million recorded in 2022, this would be a 15% increase on an annual basis. This is the highest average growth rate compared to other countries surveyed.
Russia is the world’s second largest cryptocurrency user, behind only the United States. But it also outpaces some of the countries with the most widespread crypto culture, such as the United Kingdom, Japan, Canada, and Germany.
In the United States, crypto users reached 52.8 million in 2022. This is slightly above the estimates for Russians by 2027.
The user base is also expected to grow in the United States. The number could nearly double in five years to 102.2 million by 2027. Overall, the annual growth rate for the United States, Japan, and Europe between 2022 and 2027 is estimated at 14%. One point less than Russia.
In total, Europe had 101.5 million crypto users in 2022 , a figure that is set to rise to 191.6 million by 2027.
The rest of the world will see exponential growth in cryptocurrency adoption.
There are currently 291.7 million total users, excluding the United States and continental Europe. This figure will increase by 20% year-on-year to 729.3 million in 2027.
Cryptocurrencies, NFTs or DeFi?
An interesting thing to note is that the popularity of NFTs and decentralized finance protocols varies by geography . NFTs are undoubtedly more popular in the United States than any other country. In 2022, there were 900,000 users, a figure that will increase to 1.6 million by 2027.
But almost no one else takes NFTs so seriously. The second largest adopter, Russia, currently has only a third of the NFT users compared to the US. Estimates for 2027, however, remain stable and it is believed that the move from the current 300,000 Russian NFT owners to 600,000 is possible.
In Europe in general, NFTs and dApps have a certain appeal and the data is positive in many respects. The report highlights the leading role of tokens (both fungible and non-fungible) and decentralized applications that will remain a point of reference especially once the legislative gaps are filled.
Setting rules fuels adoption rate
The definition of a clear regulatory framework on crypto is the element that plays in favor of the greater adoption of crypto.
It is easy to understand this statement if you look at what has happened to Russia in recent years. According to a Singaporean research firm, TrippleA, at the beginning of 2021, about 17.3 million Russians owned cryptocurrencies. At the time, this figure represented 12% of the population. The following year, this figure grew by 2 million.
Such high numbers are not surprising in a country where in 2022 46% of purchases of goods and services on the Internet were made with electronic money. This amount also includes on-chain transactions worth 16.8 billion.
In the past, the Central Bank of Russia and the Kremlin have taken restrictive positions towards the adoption of cryptocurrencies, in particular mining activities have been discouraged. But it is after the invasion of Ukraine and the imposition of sanctions on the country that the government has opted for greater flexibility towards crypto transactions.
Recently, the Russian parliament discussed a new bill proposed by miners that calls for recognizing the activity within the country's business fabric. A part of the parliament supports the bill, but it still needs the green light from the Ministry of Industry and Trade.
In general, the Russian government's approach to crypto has changed over time. Much attention has been paid to the development of the digital ruble , despite crypto having demonstrated its potential to circumvent international sanctions.
The Role of Crypto Regulations in Determining Adoption Levels in the US
Regulatory developments also play a key role in determining the level of crypto adoption in the United States, although for different political and geopolitical reasons.
In the United States, the push for crypto adoption comes from the recent listing of spot Bitcoin ETFs. ETFs are investment vehicles linked to funds that buy and hold Bitcoin to create and sell shares linked to the value of the funds on the stock exchange.
The crypto sector had high expectations regarding the effects of the US approval of Bitcoin spot ETFs . In particular, it was expected that new investors would join the scene, such as asset managers and family offices, typical figures in the US financial landscape who manage the pension investments of various categories of workers. Authorization to list ETFs represented a legalized, and therefore protected, way for these entities to gain exposure to Bitcoin and exploit its earnings potential.
Many countries have legalized ETFs in recent years, including Canada and Europe. However, the likelihood that these vehicles could be listed in the United States seemed more remote, where the position of the Securities and Exchange Commission (SEC) has been clearly anti-crypto since the inauguration of Chairman Gary Gensler in 2021. Since then, a long season of trials has begun against various crypto companies accused of not complying with securities regulations.
US Could Lose Its Lead in Crypto Adoption
Last year, things changed. A federal court overturned an SEC ruling denying financial firm Grayscale’s request to convert its Bitcoin-related trust into an ETF, effectively an ETF tied to the token’s spot price. The judge called the SEC’s denial “arbitrary and capricious.”
From that moment on, the process was set in motion that led to the SEC approving eleven applications for spot Bitcoin ETFs in 2024. This is one of the most successful ETF launches in history: to date, inflows of over $11.7 billion have been recorded.
Yet the United States may soon find itself far behind the EU and Canada in terms of regulations. Changing this will require U.S. companies operating in the sector to maintain their international leadership.
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