One-tenth of all Bitcoin transactions are in Eastern Europe

Ukraine and Russia are leading countries in terms of cryptocurrency adoption in Eastern Europe.

The Eastern European crypto markets rank as №4 globally in terms of total transaction volume, Chainalysis researchers say.

According to Chainalysis, Eastern Europe accounts for 12% of the total volume of cryptocurrency transactions from July 2019 to June 2020. The total amount of sent and received funds during this period was $82 billion. 86% of digital assets received by the region came from exchanges, 35% — from mining, 11% — from illegal operations, 5% — from smart contracts and wallets, 4% — from gambling.

At the same time, 50% of illegal operations were carried out by scam projects, 45% — in the segment of darknet, 4% — stolen funds. The cryptocurrency market in Eastern Europe is the fourth largest in terms of volume of transactions, but the region has two countries that are the leaders in the number of active users of digital assets — Ukraine and Russia.

According to Chainalysis estimates, from July 2019 to June 2020, Russia sent more than $16.8 billion and received $16.6 billion in cryptocurrency. Ukraine for the same period sent $8.2 billion and received $8 billion. Belarus took the 3rd place in the region and 19th place in the world due to the population activity in the p2p trade sector.

Chainalysis explains the high popularity of crypto assets in Russia and Ukraine due to the population’s distrust of the government, banks, business and media.

“Bribery, cronyism, and other forms of corruption are common in [Russia and Ukraine,] and it’s common knowledge that funds can be seized from businesses and private citizens who find themselves out of favor with government officials. Banks in particular face a lack of trust, with … much of the negative sentiment stemming from the nation’s economic crises in the 1990s.”

After the crisis of the 1990s, 56% of Russians do not trust banks. Similar sentiments are observed in Ukraine after the collapse of several large banks over the past decade.

The widespread and popularity of electronic payments contributed to the introduction of cryptocurrencies. The survey conducted in 2014 showed that 46% of Russians regularly use electronic money for online purchases, mainly through the platforms Yandex, WebMoney and Qiwi.

An additional incentive for the increased popularity of Bitcoin in Russia and Ukraine was the lack of reliable infrastructure for domestic and foreign money transfers. Chainalysis researchers emphasize that the widespread use of cryptocurrencies in both countries occurred against the background of the lack of legal regulation of the market.

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