Home
News
There are more users now in Nigeria than in the US
- Bitcoin is changing emerging-market finance in Africa
- El Salvador recently made bitcoin legal tender
- Bitcoin can bring finance to the “unbanked.”
Cryptocurrencies are slowly making it to the mainstream, and a whole lot of accessories like crypto-backed bank cards, investment products and traders, both big and small, have entered the arena driving the likes of bitcoin, ether and dogecoin to prominence.
In the developing world and especially in Africa, cryptocurrencies are finding increasing acceptance. Young and tech-savvy populations, Brazil to Nigeria, are driving the surge in the use of cryptocurrencies. Unfortunately, the present financial regime is seething with corruption, and a large percentage of the population is devoid of access to banking services.
The acceptance level of Bitcoin in third world countries is very high.
James Butterfill, an investment strategist at CoinShares and Reitz, the general manager in Africa of crypto exchange Luno, are at pains to explain the social benefits of bitcoin in third world countries. Talking to Insider Butterfill said that the acceptance level of Bitcoin in third world countries is astonishing. Moreover, the Bitcoin volume growth is also massive.
One in three people in Nigeria said that they owned cryptocurrencies
According to a Statista survey of global consumers in February, one in three people in Nigeria said that they held, or used, cryptocurrencies, versus just 6 out of every 100 in the United States in 2020.
El Salvador became the first nation to make bitcoin a legal tender through a vote in its national Legislative Assembly. However, the World Bank has said that it will not work with the nation on its cryptocurrency plans. The World Bank believes that cryptocurrency prices are too volatile to be used as a currency.
Bitcoin trading in emerging economies is increasing at a phenomenal rate. For example, trading volumes in Brazil in crypto assets have surged by 247% year-on-year in 2021. Likewise, Venezuela, which is facing hyperinflation caused by political chaos and economic mismanagement, has seen crypto trading volumes increase by 833% in the last 12 months, according to data provider Kaiko.
The same story repeats in other developing economies. In Nigeria, which is also one of the largest economies in Africa, trading volumes in crypto assets have risen by 128% this year. Turkey also saw a steep rise in crypto trade after inflation and economic decline hit the lira. The popularity of cryptocurrency sent the central banks in Turkey into jitters before it ordered a clampdown on cryptocurrency trade.
Bitcoin has been trading between $40,000 and $31,900 over the last month. However, it has moved between $30,000 to $63,000 and, despite its volatility, is still increasing in popularity in third world countries.
Cryptocurrency can bring financial services to the unbanked population
Butterfill said that 1.7 billion people do not have banking facilities. However, 48% of the global population has a smartphone and, in theory, has access to the internet. Cryptocurrency can bring financial services to the unbanked population and help them in alleviating their poverty. For example, in Latin America, 30% of the population over the age of 15 have a bank account, according to 2019 data by consultant Mckinsey. Bitcoin can help these unbanked populations have access to banking services.
The African Continent is still not integrated with the world economy, and cryptocurrency can achieve this. Most African nations have unstable governments and rampant corruption. The value of the native currency is also volatile. Cryptocurrency offers the population of these nations sufficient money to do business and commerce. It is also one reason why Crypto use has also grown in Ghana, Kenya, South Africa, Botswana and Zimbabwe.
Another critical factor that is encouraging cryptocurrency growth in Africa is the cost of transferring money. According to a World Bank Report in 2020, sending money to Africa via traditional bank transfer cost an average fee of 8.9% compared to the global average of 6.8%. In addition, sending money overseas or receiving funds is tiresome and time-consuming and is littered with additional and hidden costs. Crypto is helping fill that gap.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
