From South Africa to Latin America, developing countries currently top cryptocurrency usage.
NEW DELHI: The rallying cry for cryptocurrency use in the West and Europe could very well be about long-term investment in the most lucrative and stable digital asset.
People in developing countries with a shifting economy, on the other hand, use cryptocurrency to send diaspora remittances or seek financial relief from spiralling unemployment.
Separate surveys on cryptocurrency ownership, adoption, and usage, conducted by Statista in March 2021 and Finder and Chainalysis in August 2021, listed such developing countries among the top 20.
The survey identified Nigeria in South Africa, Vietnam and the Philippines in Southeast Asia, and Venezuela and Argentina in Latin America as major players.
Here are their stories:
Nigeria:
This country has the most cryptocurrency usage, with 32 percent, according to a Statista global survey conducted in March 2021.
Because of the strict laws and steep costs paid on inbound remittances, Nigerian expats have turned to cryptocurrencies to send money home to their relatives.
Surprisingly, Nigeria's official records show a steady fall in remittances from $2.5 billion in January 2021 to $54.4 million in September 2021.
Private cryptocurrency providers, on the other hand, continued to receive remittances. The government is currently planning to establish its own e-naira to replace cryptocurrency.
Vietnam:
This country's economic predicament pales in comparison to its unwavering determination to prosper through bitcoin services. The Chainalysis Adoption Index ranked it first.
Previously, the necessity to send remittances to families for support drove Vietnam's bitcoin adoption, but now it's being diverted for future investment.
With the price surges of altcoins and Bitcoin, Vietnam saw a return of crypto mining activity and demand for mining rigs in September 2021. Crypto mining, on the other hand, is still not a regulated activity in Vietnam.
Philippines:
The Philippines is among the top five countries in the world for funding received from overseas, according to the World Bank, with an annual remittance of $32.5 billion.
The Central Bank of the Philippines has licenced numerous crypto exchanges to function as remittance and transfer organisations in the country, acknowledging the impact of cryptocurrencies in transforming the country's diaspora remittances and fundraising potential. The use of cryptocurrencies for both investment and revenue creation has expanded in this country.
Filipinos contribute for 40% of the over 1 million Axie Infinity players. Many residents saw this as an economic opportunity in the aftermath of the pandemic, which had resulted in widespread unemployment. The jobless in the Philippines, Brazil, and Venezuela were helped by Axie Infinity, a crypto-based play-to-earn game.
Venezuela:
Venezuela's crypto boom has been fueled by skyrocketing inflation in 2020, a minimum pay of less than $10, and inexpensive electricity.
Cryptocurrencies are a convenient and affordable alternative for Venezuela's 5 million diaspora to transfer money home.
Crypto mining has exploded as a result of the low cost of electricity. Since November 2020, cryptocurrency mining has been a regulated activity in Venezuela. Getting into the Axie Infinity crypto game through scholarships is another option for people who cannot afford to buy expensive mining gear.
Argentina:
By May 2021, this Latin American country, which was suffering from 45 percent inflation, 42 percent poverty, and a 9.9% GDP contraction in 2020, had recruited 2 million cryptocurrency users. Argentinians have turned to cryptocurrency services and trading to escape the country's economic troubles.
Colombia, ranked 11th in the Chainalysis bitcoin adoption index, and Brazil, ranked 14th, have both geared up for cryptocurrency use as a hedge against various economic difficulties in their respective countries.
