Cryptocurrency In Developing Countries

The Cryptocurrency market was valued at $2.22 trillion not so long ago and with public interest in DeFi soaring, the sky’s the limit. While it feels like the world is abroad the crypto train, a mere 6% of Americans hold any form of cryptocurrency. This low percentage isn’t reflected in many developing countries around the world, where crypto has become a very attractive and lucrative investment.

Leading trading platforms such as Coinbase and Nova exchange offer the public a quick way to access crypto markets, buying and selling coins from their mobile phones. With such a tiny fraction of major countries investing in digital currency, one wonders where all the everyday investors reside.

Which developing countries are the biggest investors in crypto?

Based on the most complete data, it’s the continents of Africa, Asia and South America that stand out as regions that are more likely to see a thriving cryptocurrency market, than more developed continents like Europe, North America, and Australia.

Taking a closer look, it’s clear that one nation stands above all the rest. Nigeria is the leader in terms of cryptocurrency ownership, with 32% (almost 1 in 3) residents reporting to have some form of crypto in 2020. One can speculate on how that figure may have evolved.

In the East, Vietnam and the Philippines have led the way in terms of crypto ownership, especially now China has imposed a ban on cryptocurrency trading. Both countries have growing economies and crypto has helped them to grow. With 21% of the population in Vietnam and 20% in the Philippines holding cryptocurrency, there is a certain belief in the progress of digital currency.

Moving across to Latin America, there has been a surge in the number of users since the pandemic began. One of the leading countries is Brazil, where 18% of people who took part in a survey claimed to use crypto as a form of payment. Colombia boasts the same percentage of users.

While down in the South of the continent, Argentina has 16% of users. It’s quite understandable for Argentinians to look for alternatives to the native Peso, as it defaulted their currency against the dollar 2 decades ago and has never recovered. Peru also has 16% of users reporting the use of cryptocurrency. Their Southern neighbours Chile report that 11% of the population own cryptocurrency of some kind, though the industry is just beginning to gain traction there compared to neighbouring countries.

In Central America Mexico is the nation that leads the way in terms of public investment in cryptocurrency with 12% of the population claiming to do so. El Salvador is certainly worth mentioning, as its ambitious president Nayib Bukele recently passed a law making Bitcoin legal tender. We will get more statistics regarding the success of this project later in the year.

 Why is it popular in these nations?

As is the case for all the countries we’ve discussed in this article, the main driving force for investment in crypto is poverty. Where traditional financial systems have failed users, many citizens in these countries seeked out other means to spend and invest.

Regardless of where you go in the world, even in nations of abject poverty, people often still own mobile phones. This has fueled the rising number of crypto users in leading nations like Nigeria. This coupled with the fact extremely high inflation is commonplace in developing nations. The prevalence of crypto in these nations is unlikely to slow down, as citizens are believing in the value of digital currency, opposed to the failing financial institutions they’ve had to put up with for so many years.

What is the future of crypto in developing countries?

A recent report from the World Bank stated that 1.7 billion people do not have access to bank accounts in their own countries. In most cases, a failing traditional banking system has forced residents to become early adopters. In nations like Venezuela, Zimbabwe and Iran, there has been a thriving community of crypto users, though the statistics aren’t as accessible as that of the aforementioned countries. The lack of a functioning market and an underperforming domestic currency is a common factor relative to all these nations.

So, in terms of the future, it’s likely to see the percentage of users in each nation continue to rise. The only blocker is the ability for customers to easily spend and make everyday purchases using their digital currencies. However, with the rapid development of the fintech crypto industry, solutions will already be on their way to these developing nations.