Cryptocurrency in Emerging Markets - Is it growing?(Nigeria & Costa Rica)

Popular Question: Is Cryptocurrency Growing in Emerging Markets?

Introduction

Bitcoin, a cryptocurrency rose to $58,332 in February 2021 for a brief period - a rise of over 300% over the course of 2020. The surge in demand for Bitcoin since the beginning of the COVID-19 pandemic has helped many emerging economies recover from the economic fallout.?

Cryptocurrency is however, notoriously prone to instability and fluctuations. The recent need to move away from physical cash and adopt digital transactions has shown how important a role cryptocurrency can play in the coming few years in the emerging markets.

Cryptocurrency adoption in emerging countries

Let’s take Nigeria, for example. Nigeria was the leading emerging market to adopt Bitcoin to transfer funds internationally. There has been an uptick in their use which is also associated with the spike in demand with remittances.

There was an article in the BBC that mentioned, a 2020 online survey by data platform Statista found that?32% of those Nigerians who took part used cryptocurrencies?- the highest proportion of any country in the world.

Cryptocurrency adoption is also facilitated by the fact that they can be traded via mobile devices. This is useful in to regions where access to computers is limited.

There has also been a massive spike in cryptocurrency adoption in countries like Cuba, and Myanmar. This shows how cryptocurrency is making a mark around the world, even in countries marked by instability.

Governmental control on cryptocurrency

Another prime example of an emerging market that has successfully integrated cryptocurrency is Costa Rica, where workers are even being paid in cryptocurrencies. The adoption has resulted in a spike in cryptocurrency usage across the nation. This is excellent news, considering how Costa Rica is dependent on renewable sources of energy.

Most governmental interventions in cryptocurrency adoption have been to make mining less environmentally damaging. The Bitcoin currency also threatens governments since they will likely lose power over the transactions.

Emerging countries like the Philippines, Vietnam, Nigeria, and Morocco are quickly becoming part of the global cryptocurrency revolution despite governmental regulations and laws.

For ongoing growth of cryptocurrency use, there needs to be more awareness about using cryptocurrency in the emerging markets and in addition to this, there needs to be ongoing improvements to digital infrastructure.

Arguably, governments and regulators should work in collaboration with payment providers to improve the payment ecosystem.

Recently, El Salvador has become the first country in the world to officially classify Bitcoin, cryptocurrency as legal currency...The new law means every business must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to do the transaction. Will this have an impact on emerging markets? I would say, yes, most definitely.

Chances of blockchain-based national digital currencies

I would like to briefly mention Central Bank Digital Currencies or CBDCs which may affect the growth of crypto payments. It is a solution presented to create a blockchain-based national digital currency. It is essentially a digital form of hard cash that the central bank can issue.?China has adopted it with the Digital Yuan. We might see other countries catching up with the trend as well. This could be the banks defence against cryptocurrency or it could be the start of them exploring ways to work more with it...

This topic needs an essay...

Cryptocurrency has a lot to offer to the emerging economies and the trends suggest cryptocurrency usage will grow.

What do you think about crypto?

Faye Eldridge - Fintech & Tech Consultant | Payments consultant at #Payfuture | www.payfuture.net

Using reading:

1. Cryptocurrencies: Why Nigeria is a global leader in Bitcoin trade

https://www.bbc.co.uk/news/world-africa-56169917

2. Can cryptocurrencies drive a Covid-19 recovery in emerging markets?

https://oxfordbusinessgroup.com/news/can-cryptocurrencies-drive-covid-19-recovery-emerging-markets

3. In a world first, El Salvador makes bitcoin legal tender

https://www.reuters.com/world/americas/el-salvador-approves-first-law-bitcoin-legal-tender-2021-06-09/

#Bitcoin #Cryptocurrency #Fintech