The Crypto or DeFI Space as everybody called it is indeed a new world for everybody who is not familiar with it. Going back 4 to 5 years from now, the DeFI is probably only known within the IT community or millennial generation but now everyone wants in on this opportunity. From Hedge Funds to Nations, DeFI Space has managed to garner interest from every part of the world, and each with its own plan to maximize the opportunity. So let’s take a closer look at the nations that are leading the way in DeFI 2023 and who can take the leap forward in the years to come.
Emerging Markets with the edge forward
Bring yourself back to the pre-21st century and you will see the growth in the economy reaching its all-time high. As the 21st Century rolls up with 2 crashes in the first 8 years and then it is expected that people’s trust in the traditional system is diminishing. Amid the Great Depression, Bitcoin was introduced in the world as a possible solution to this traditional system, and over the years it has built its own Decentralized Community with plenty of keen enthusiasts.
The journey of this DeFI Community was certainly a strange one from being deemed worthless by many traditional investors to being at the top of everybody’s mind during the 2021 Boom. It went from being relatively unknown in the early and mid-2010s to being the topic in every headline by the end of it and possesses an incredible growth that is still quite unmatched by other asset classes. As more people take an interest in this space, it also expands the capabilities that were originally introduced by Bitcoin.
Of course, it is also without its flaws as the amount of volatility, speculation, and scams happening in the space is not helping at all in allowing this community to grow. With this, some countries take extreme measures to protect their citizens but others are more interested in regulating the space so it could grow sustainably. Over the years more countries are eager to maximize the opportunity that is provided by the DeFI Space to attract more interest and revenue into the country.
When you talk about countries within the DeFI Space it is obviously EL Salvador which provides all of us with a landmark moment in 2021. Bitcoin became the first Digital Currency to be adopted as a Legal Tender by El Salvador in mid of 2021 in what was deemed a risky move by many. El Salvador was quick to bank on the opportunity that Bitcoin provides but it fails to predict what would come along after its peak growth. As of April 2023, the country still holds 2546 Bitcoin in its reserves and is still active in developing the world’s largest Bitcoin Mining Farm. If we look at it right now this investment might be only worth half of what it used to be but as Bitcoin showed much more stability throughout 2023 and possibly growth in 2024, El Salvador should be in pole position to capitalize on it.
In assessing who is the next superpower in the DeFI Space, we can also point out the 2 superpower nations within the traditional economy which are the USA and China. While China decided to outlaw digital currency in 2021 despite being the world leader in Bitcoin Mining at that time, the USA adopts a different approach in aiming to regulate Digital Currency. It is fair to assume that the interest coming from the USA for DeFI is really high as two of the largest exchange in the world Coinbase and Binance has their footing in the USA. USA is also amongst the highest in terms of Digital Currency Adoption with its Bitcoin Conference in Miami being one of the most anticipated events in the DeFI Space. With many institutions such as RippleLabs and Solana tracing their origins back to the USA, it never fails to surprise us that the USA could become a global leader as the next boom comes along.
When we look at the Data reflected throughout 2023, it actually paints a contrary picture as Emerging Markets such as India, Vietnam, and the Philippines are countries that are showing huge growth so far. India which currently has the largest population is an obvious sight as the country is pretty tech-savvy and currently holds more than 100 Million people within the DeFI Space. India’s recent Crypto Bill also has helped the growth of the DeFI Space within the country and with its vast population that is in their working age, India could expand its dominance within the DeFI Space.
Other countries such as Turkey, Nigeria, and Iran paint a different story than previously mentioned as the economic situation within the nations forces them to adopt digital currency as an alternative. The Turkish Lira, Iranian Rial, and Nigeria Naira have suffered a massive depreciation in value that in turn forced its people to turn to Bitcoin and USDT as a means to protect their wealth. Argentina and Venezuela also suffer from the same cause but if the DeFI Space does experience a huge boom in 2024, we can also expect more growth on the DeFI Space within these countries.
Vietnam is also a country to look for in terms of the DeFI growth during the pandemic era has been remarkable, to say the least. Vietnam currently is amongst the top 5 nations in terms of growth adoption rate with an estimated 20% of the population owning digital currency. Vietnam is also experiencing massive growth in terms of its GDP and its young tech-savvy generation could also spur its growth. Its growth could also be thanks to the rise in popularity of Axie Infinity throughout 2022 with its Co-Founder Trung Nguyen being a prominent figure in the Vietnam DeFI Space.
One of the last key determinants in assessing the next great superpower in DeFI Space is in finding out how friendly the regulations are within the country. We look at Coindesk’s top 5 Crypto Hubs 2023 ranking which comprises Zug, Singapore, London, Seoul, and Dubai. It is a familiar sight to see Singapore and Switzerland as these countries have been the global reserve hub for decades but the others in Dubai, South Korea, and the UK are present there due to their friendly regulation. Dubai introduced the Virtual Asset Regulatory Authority (VARA) which has since attracted firms like Binance or Lbank to obtain licenses within the country. South Korea and the UK were also pretty early in introducing a regulation within 2021 that has ensured the growth of the DeFI Space within the country.
There are also countries like Indonesia and Brazil that might not be the global hub it was right now but shows signs of massive growth in the DeFI Space within the country. There is no clear-cut leader as of yet within the DeFI Space with a lot of countries maintaining growth in various sectors in the space but rest assured that we could expect major global developments in 2024 as the uptrend trajectory continues.
Growth or Slump in 2024?
A usual case that happens with approaching the end of the year is people then start to deliver predictions of what may happen in 2024. However, this year hopefully ends with a much more positive sentiment than 2022 as Digital Asset starts to stabilize and there was less of a downturn/collapse that happened so far this year. There are still plenty of months to go through but let us assess some of the outlook in 2024.
One of the anticipated events in 2024 is Bitcoin Halving which is usually followed by a slump in the market and this could cause a shake-up in the DeFI Space. Currently, the Emerging Markets are leading forward due to the absence of China and the USA still not having a concrete regulation. Although regulations in the US are expected to be completed within 2023 and this paired with a high amount of DeFI Activity within the US should boost the growth within the country.
Although a key factor that could affect this will be the high-interest rate within the US as this would reduce the number of investments made to the space. This then leaves room for countries such as India with its huge population or Dubai with its crypto-friendly regulation to take the leap forward. We can also expect that the economic pressure from the high-interest rate will continue until 2024 and this would affect any growth made within these countries.
With all this in mind, it is fair to expect that growth at a slow pace will happen during the end of 2023 and through 2024. This growth will mainly be fueled by countries within the Asia region as the most population and DeFI activity are situated within this area. We also cannot rule out the EU Region as the MICA Regulation ensures a seamless adoption within the EU Countries but the Asia region shows magnificent growth within the past years and should be able to continue in 2024. With many countries in contention, it is an exciting time for DeFI enthusiasts to look forward to in 2024.
We at Nagaya Technologies certainly believe that there is a huge potential to be found in the DeFI space. We hope that the development going around the world should be able to help to nurture growth for the rest of 2023 and beyond. That is also why we created the world’s first hybrid digital assets called Nagaya which will soon be a part of the revolution needed towards sustainable Digital Assets for the Global DeFI space. Interested to know more about Nagaya, you can visit our website at www.nagaya.co
Or you can talk to us at t.me/nagayaofficial