- >Five Countries That are Ripe for Adoption of Cryptocurrencies
Five Countries That are Ripe for Adoption of Cryptocurrencies
In the beginning, cryptocurrency was seen as a frivolity, something to rock the boat for no reason at all. At least, that was the attitude of most finance and tech experts. Even when Bitcoin was riding high in its biggest bull run, critics dismissed it as a bubble that would pop. But years later, crypto is stronger than it ever was, and some countries out there are making serious headway in its adoption. Get this: it’s not even the world’s economic superpowers that are at the forefront with this. It’s the least unexpected countries, where everyday, average users are leading the charge.
This article explores countries that have demonstrated readiness for crypto adoption. Whatever the backstory for each – intriguing, or otherwise, the point is that these countries are ripe for cryptocurrency.
CryptoVantage Staff | Dec 7, 2020
Iran is a country that’s famous for many things, like a repressive regime, but not so much for forward-looking technology. And yet it’s at the forefront of crypto adoption.
At the moment, the country is the first in the world to adopt crypto at the state level. In October, the cabinet and the Central Bank of Iran approved for cryptocurrency to be used to fund imports. Across the country, citizens are turning to crypto to maintain value. Many convenience stores are accepting Bitcoin, as students pay for tuition with the currency. Last year, the government legalized crypto mining in a tentative embrace of crypto. Per data by EXIR, the country’s crypto exchange, activity on the platform increased by 200% in the past three years alone. These and more examples depict a country that’s poised for crypto adoption.
Iran started edging towards crypto after US sanctions crippled the economy, with the Covid-19 pandemic exacerbating the problem. At the time of writing, one US dollar is worth 42,000 rials, with a staggering inflation rate of 34%. Crypto’s autonomy means no government can shut it down or restrict its movement. This makes it an attractive option for maintaining economic value for the country and its citizens
India flirted with cryptocurrency for several years. That was before the Reserve Bank of India (RBI) slapped a ban on any crypto-related services in banks in 2018, throwing much of the country’s crypto infrastructure into disarray. Then things began looking up again when the supreme court overturned the ban.
The crypto scene is now alight, and investors are descending in full swing to identify opportunities. American billionaire investor Tim Draper has “met several Bitcoin and crypto startups” in the country, and he’s hoping to “fund a number of them.” So big is the crypto boom that the country’s daily trading volume was going up to 30 million during the lockdown. Crypto exchange WazirX saw a 400% increase in signups in just months. This August, Mumbai-based crypto exchange CoinDCX launched a staking program in which users can earn lucrative returns staking in three cryptocurrencies: Harmony, Qtum, and Tron. This is the first of such a move in the country.
Part of what makes India ripe for crypto adoption is its large swathes of unbanked people of nearly 190 million. This population comprises mostly young people who are not only more receptive to cryptocurrency but are buoyed by quality internet standards and affordable smartphones. Indeed, India is one of the emerging economies leading the way in adopting fintech, with 87% of its population on board. This and the flurry of crypto activity already present foreshadows a country that will be a future champion of crypto adoption.
Crypto is full of surprises, and that’s why we have Ukraine on this list. According to a recent report by Chainalysis, the country is the most crypto-active in the world right now. Something particularly eye-opening about the report is that it’s not the crypto whales fueling adoption in the country. It’s grassroots users.
Ukraine is warming up to crypto due to an unstable political environment that has spawned an unstable economy. Another reason is a tech-savvy population. Apparently, this creates the perfect recipe for cryptocurrency adoption, as echoed by Gleb Naumenko while speaking to Coindesk: “Our political situation is somewhat unstable, and Ukrainians are tech-savvy, so this combination creates incentives for people fleeing from Fiat to crypto.”
Like in many other jurisdictions that are embracing crypto, the motivation to hedge against inflation is a major driving force for adoption here. Between political tensions and an increasingly depreciating currency, people are looking to cryptocurrencies to de-risk their savings.
For years, Nigeria’s government clamped down on anything crypto, citing unregulated activity on crypto exchanges and exploitation of crypto for criminal use. Now, it’s singing a completely different tune after realizing the crypto train had left the station and there was no turning back. Nigeria is one of the most crypto-active countries in Africa, and the government’s efforts to suppress the surge were all for naught.
Crypto’s burgeoning clout in the West African country was on full display in the recent #EndSARS protests. Protesters turned to Bitcoin to keep donations flowing after the government blocked them in all centralized financial venues. Also, Nigerians living abroad routinely use the crypto exchange Paxful to send money back to family. At home, many more Nigerians use crypto to bypass trade restrictions in China.
The country’s Securities and Exchange Commission has now resorted to regulating the sector after it proved irrepressible. The commission made sure to clarify that the end goal wasn’t to “hinder technology or stifle innovation but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.”
Venezuela would have been a beacon of crypto adoption in the Latin American region, were it not for the dire reasons pushing this adoption. For citizens of the country, cryptocurrency is not an option but a lifeline. This is because the country’s national currency has become practically worthless in recent years – in light of political unrest, runaway corruption, out-of-control money printing, and crippling US sanctions.
In their 2020 Geography of Cryptocurrency Report, Chainalysis notes that much of the crypto movement is driven by peer-to-peer action, especially on Localbitcoins. So active are Venezuelans on the platform such that the country ranks only after the US and Russia in terms of P2P trading.
This September, president Nicolas Maduro announced that Venezuela would start using cryptocurrency in international trade in an effort to fend off US sanctions. The country, which previously frowned upon other cryptocurrencies apart from its oil-backed Petro coin, has also recently legalized crypto mining.
These countries are proving the inherent importance of cryptocurrencies and how the world can no longer wish it away. Do they signal more adoption from here on? That’s a real possibility to keep an eye out for. At present though, it’s clear that the least expected countries are leading the charge, and not the world’s ‘obvious’ economic heavyweights. Whether this changes is a matter of wait-and-see.
Author: Hope Mutie