Cryptocurrency transactions in Eastern Asia more than halved year-on-year, according to a Chainalysis report.
The firm’s Geography of Cryptocurrency document says Eastern Asia’s volume of crypto transactions fell from 31% in the period between July 2019 and June 2020 to only 14% between July 2020 and June 2021.
On top of that, the overall transaction volume in the region grew by 451%, making it the slowest-developing region in the world.
China – the zone’s largest market by far – was propelled by decentralised finance (DeFi) like the North American market, which accounted for 49% of all cryptocurrency transactions in the country.
However, the next two largest crypto-economies in the region – South Korea and Japan – saw a comparatively much smaller volume of DeFi trade.
Chainalysis found that just 15% of South Korea’s cryptocurrency transactions were DeFi. In Japan that only rose to 32% of transactions.
One of the main reasons for the step backwards in cryptocurrency in Eastern Asia has been the recent Chinese clampdown on crypto activities.
At points in recent years, China has had more than 60% of the Bitcoin (BTC) hashrate – the measurement for total computing power being put toward mining a cryptocurrency – but the Chinese government took steps to limit this.
In the timescale for Chainalysis’ research, the Chinese government threatened limiting mining. Since then, the government has made mining illegal in the country and made all cryptocurrency activities completely illegal.
This ban will cripple the East Asia crypto market. China’s share of the crypto market stood at $256bn received in the period between July 2020 and June 2021. South Korea, the next largest, received only $150bn.