Crypto-Assets Activity around the World : Evolution and Macro-Financial Drivers

On-chain crypto-assets transaction volumes have grown rapidly, particularly during the COVID-19pandemic. Crypto-assets activity appears to be a global phenomenon, although it still remains modest relative togross domestic product for most countries. Panel regressions across more than 130 countries show that the variation incountries’ monthly crypto volumes is mostly driven by globally relevant factors such as real U.S. longer-terminflation expectations, U.S. real Treasury yields, and gold and crypto-asset prices, rather than recent country-levelmacroeconomic developments. Cross-sectional regressions offer tentative evidence that crypto activity is higher incountries 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 thatcrypto-assets are perceived as a risk asset, a potential macro hedge, and a potential tool to support cross-bordertransactions. However, the results come with caveats: a significant portion of the sample period includesextraordinarily loose global financial conditions; the crypto volume data have a short history, rely on importantlimiting assumptions, and do not represent all crypto activity; and crypto-assets represent a fast-evolving,increasingly diverse asset class and industry.