Ukraine, Russia lead in crypto adoption at all levels

Eastern Europe is seeing growth in crypto usage, driven by large transactions and retail usage amid regional instability, with institutional and grassroots adoption increasing in Ukraine and Russia.

Cryptocurrency adoption is accelerating in Eastern Europe, led by strong institutional and grassroots participation in Ukraine and Russia, according to a Chainalytics report.

Last year, Ukraine recorded an approximately 362% increase in large corporate decentralized finance transactions (exceeding $10 million), fueling much of the decentralized finance growth. Large corporate transfers in Belarus, Poland and Slovakia, as well as Russia, have similarly led to the expansion of decentralized finance, according to a New York-based blockchain forensics firm.

Year-on-year growth in Eastern Europe by country and transfer size | Source: Chainaliz

Retail crypto activity is also on the rise in Ukraine, where small and large retail transactions are up 82.2% and nearly 92% respectively. Chainalytics explains that small transactions often indicate “grassroots adoption,” and given the region’s geopolitical instability and Ukraine’s recent recovery from inflation, these small transactions may indicate investors are using crypto to increase their daily purchasing power.

Decentralized finance boom in Eastern Europe

Data compiled by Chainalytics also revealed that decentralized exchanges in Eastern Europe saw the largest increase in crypto inflows. Decentralized exchanges across the region received $148.6 billion worth of cryptocurrencies.

“Cryptos sent to DEXs in Ukraine and Russia increased by 160.2% and 173.8% respectively; “Ukrainian DEXs received $34.9 billion and Russian DEXs received $58.4 billion.”

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Chainalation analysts highlighted that by 2023, decentralized finance will account for more than 33% of all crypto activity in Eastern Europe. Globally, Eastern Europe ranks third in year-on-year decentralized finance growth, behind Latin America and Sub-Saharan Africa, particularly in regions where regulatory conditions remain uncertain.