Publication: Crypto-Assets Activity around the World: Evolution and Macro-Financial Drivers
Date
2022-03-08
ISSN
Published
2022-03-08
Author(s)
Feyen, Erik H.B.
Kawashima, Yusaku
Mittal, Raunak
Abstract
On-chain crypto-assets transaction
volumes have grown rapidly, particularly during the COVID-19
pandemic. Crypto-assets activity appears to be a global
phenomenon, although it still remains modest relative to
gross domestic product for most countries. Panel regressions
across more than 130 countries show that the variation in
countries’ monthly crypto volumes is mostly driven by
globally relevant factors such as real U.S. longer-term
inflation expectations, U.S. real Treasury yields, and gold
and crypto-asset prices, rather than recent country-level
macroeconomic developments. Cross-sectional regressions
offer tentative evidence that crypto activity is higher in
countries with higher information and communications
technology adoption and higher reliance on remittances.
Taken together, the findings shed new light on the drivers
behind crypto activity and offer support to the notions that
crypto-assets are perceived as a risk asset, a potential
macro hedge, and a potential tool to support cross-border
transactions. However, the results come with caveats: a
significant portion of the sample period includes
extraordinarily loose global financial conditions; the
crypto volume data have a short history, rely on important
limiting assumptions, and do not represent all crypto
activity; and crypto-assets represent a fast-evolving,
increasingly diverse asset class and industry.
Citation
“Feyen, Erik H.B.; Kawashima, Yusaku; Mittal, Raunak. 2022. Crypto-Assets Activity around the World: Evolution and Macro-Financial Drivers. © Washington, DC: World Bank. http://hdl.handle.net/10986/37115 License: CC BY 3.0 IGO.”
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