Bitcoin adoption in developing countries (press release)
The developing economies have increasingly embraced cryptocurrencies. Below is a review of Bitcoin adoption in developing countries.
While mainstream institutions in the developed world still view crypto with suspicions, these new financial instruments have fertile ground in developing economies. The Bitcoin adoption in developing countries has increased by huge margins in the past few years, with El Salvador making history as the first nation to make it a legal tender.
Multiple studies and industry reports reveal that cryptocurrencies such as Bitcoin are fast becoming daily transaction mediums in countries with financial instability ground and restrictive investment policies. Several businesses and individuals in the developing world have increasingly embraced Bitcoin as a transaction currency and a store of value.
In 2021, a Chainalysis study ranked Vietnam first for crypto adoption, with Asia accounting for half of all crypto users worldwide. Emerging markets including Pakistan, Nigeria, Ukraine, Kenya, and Venezuela also rank among the developing countries with the highest crypto adoption rates. Several leading crypto platforms say most customers come from developing markets in Latin America, Africa, and Asia. The following article explores the accessibility and usage of Bitcoin in developing economies.
An Alternative to Weak Currencies
Cryptocurrencies are increasingly gaining root in the developed world, mainly because fiat currencies have failed to meet their expectations. Most national currencies in developing countries have often fallen short of serving as means of exchange and units of account. The unpredictable inflation and fast-moving exchange rates in developing economies have significantly weakened the developed world’s local currencies.
The national currencies in most developing countries are also subject to strict financial restrictions, regulatory uncertainties, and costly banking systems. Such factors have increasingly undermined the fiat currencies in developing economies, impacting the need for alternative money.
Several developing countries rely on the US dollar as their reserve currency. However, the supply of the USD is also subject to various factors. For example, a drop in exports could squeeze the dollar supply, exposing developing countries to significant economic challenges. That has convinced the developing world to seek an alternative currency, not subjected to political influences.
Several institutions, businesses, and individuals in developing countries have turned to crypto to break away from the restrictive conventional financial systems. Bitcoin offers a better alternative to weak national currencies because it is decentralized. It has no central authority that influences its supply and usage, offering investors a better hedge against inflation. Bitcoin transactions are also not subject to any government or banking regulation.
Several developing countries rely on remittances from aid organizations, families, and friends in the developed world. However, moving money through the traditional channels has been very costly. Bitcoin offers an alternative to conventional remittances, facilitating instantaneous and low-cost international remittances.
A Reliable Transaction Currency and Investment
Bitcoin undoubtedly has robust real-world applications. However, most businesses and individuals in developing countries use it as payment and a store of value. Several merchants now accept Bitcoin and other cryptocurrencies as payment for goods and services in their stores. As many users report, Bitcoin facilitates faster, secure, and cheaper cross-border money transfers.
The big exchanges such as www.BitcoinEras.com still dominate crypto services across multiple developing countries. However, we have also witnessed the proliferation of several local-based crypto businesses in the developing world. Nevertheless, crypto exchanges account for more than 80% of all cryptocurrency transactions in developing nations. They bring Bitcoin closer to the general public and facilitate transactions. That has made it easier for businesses and individuals to move funds, trade, and invest, driving Bitcoin adoption.
Overall, several developing countries have suffered restrictive financial policies and weaker infrastructure for decades. Thus, they have increasingly embraced Bitcoin and other cryptocurrencies as the best alternatives to their more vulnerable and unreliable local currencies.
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