Ranking crypto “investment” by country is difficult. Since on-chain value flows are better than survey guesswork, I use Chainalysis’s regional and national tallies, supported by additional internet research. Admittedly, the time period for the Chainalysis figures ends in June 2024, but it gives us a rough idea of who uses the most crypto. These are rough estimates:
We see that the U.S. writes the headline numbers, though large emerging markets are catching up.
What would these figures look like if adjusted for population? Here is the per capita breakdown (source):
While India has the largest number of crypto owners (93.5 million people), on a per-capita basis, small, tech-savvy hubs such as the UAE, Singapore, and Vietnam punch far above their GDP weight. Export heavyweights like Japan and Germany lag. Regulatory clarity and mobile-first finance, not just income, drive adoption.
Lessons for Regulators:
Based on the first round of mainstream crypto adoption, we have a good idea of what good and bad pro-crypto regimes look like:
A. Pro-crypto regulatory regimes with good outcomes:
- UAE: Light-touch licensing plus clear AML rules attracted Binance, Bybit, and significant family-office funding, as well as high crypto investment by residents.
- Singapore: Stablecoin framework sets quality-reserve rules, keeping bank ties open while filtering out shadier exchanges.
- Switzerland: Tokenized-asset trading systems now run under full regulatory approval, linking straight into the banking payment rails.
B. Pro-crypto regulatory regimes with bad outcomes
- Bahamas: A head-start sandbox lured FTX. Its spectacular 2022 collapse torched local credibility, forcing a 2024 rewrite of the law.
- El Salvador: Though Bitcoin was announced as a national currency, the hype fell flat with most Salvadorians opting out. The government backtracked quietly this year.
C. Mixed regulatory regimes
- United States: Enforcement-first SEC policy has kept firms guessing. (This may change with Congress passing a stablecoin bill and Circle seeking a national trust bank charter.)
- European Union: The Markets in Crypto-Assets Regulation (MiCA) offers hard rules, but a two-year “grandfather” grace period means each member state still runs its own patchwork — a difficult environment for investors and entrepreneurs to navigate.
- India: Crypto is not prohibited, but punitive taxes and tax withholding stifle exchange volumes. Still, retail interest remains significant.
D. Prohibitive regulatory regime:
- China: Trading is banned, though there are reports of underground OTC desks.
4. The Coming Paradox
Governments are finally warming to blockchain’s efficiency. Yet, they fear its independence and decentralization. So, we are seeing the emergence of government-backed blockchains:
- Stablecoins: U.S. dollar-backed tokens already settle >$200 bn/month. New legislation could vault them into the heart of payments. Yet, every major bill demands bank-style reserve audits and blacklist procedures.
- Central Bank Digital Currencies: From China’s e-CNY to the European Central Bank’s digital euro pilot, state coins bake in traceability and gatekeepers by design.
- Exchange licensing: The fastest-growing hubs (Dubai, Singapore, Hong Kong) all require real-time transaction monitoring and off-chain identity checks.
Crypto’s headline numbers, both absolute (like $750 bn into U.S. wallets) and per-capita (like one in three Emiratis), keep increasing.
However, many of the traits that made Bitcoin intoxicating in 2013, like permissionlessness and monetary policy outside political reach, are being watered down. Some feel that Bitcoin’s “ideology” is being sacrificed for its “adoption.”
Lessons for Regulators
Countries that blend clarity with credibility — i.e., enough freedom for builders while ensuring that there are enough guardrails for institutions — will succeed in attracting crypto flows, entrepreneurs, and ecosystems. Regulatory regimes that are prescriptive by being too “pro-crypto” risk chaos, while those that are unclear or prohibitive risk missing out on the next wave in fintech.
—
Shaan Ray
