In 2019, an average of 5.5% of Internet users worldwide owned one or another. However, this figure is quite different from country to country. Surprisingly, globally, the first places are countries of the African continent, Southeast Asia, and Latin America. Why do residents of developing countries have such high interest in cryptocurrencies while the most developed countries still question the crypto market?
Crypto in Developing Countries
Dependence on transmittals and the omnipresence of peer-to-peer phone payments have led to a sharp rise in digital currency use in Africa’s primary economic sector. Seventy-four countries participated in a Global Consumer Survey conducted by Statista; Nigerians were the most likely to say they used or owned cryptocurrency.
Crypto enthusiasts say that Bitcoin and other currencies can solve the problems of those who do not have access to banking services. However, in the past decade, something has already been done in this direction, primarily by telecommunications companies. Mobile money – a service offered mainly by cellular providers in Africa – has fundamentally changed the situation with access to financial services. In some African countries, the entire adult population uses mobile money for money transfers, payment for goods and services, obtaining microloans, etc. Thus, cryptocurrencies in Africa have to compete with a relatively modern and convenient service.
Why are Cryptocurrencies on the Rise on the African Continent?
Mobile money services do not solve the international payments issue; these services don’t provide a wallet with E2E encryption, while the need for them is very high. The African middle class (around 330 million) is eager to buy goods on Amazon, Alibaba, eBay, and other global platforms, but they do not have the opportunity to do so. And not at all because they have no money. It’s just that their money is either in the form of cash or on local cards of African banks, which are not accepted abroad. Last year, PayPal cut off Nigeria from its service, making Lagos, Nigeria’s business capital, break the world record for the number of Bitcoin searches on Google. There’s your reason!
Approximately 30% of Nigerians reported this applied to them. The expensiveness of conventional cross-border money transfers has caused many to turn to cryptocurrency exchanges. They offer much cheaper money transfer options to migrant workers and their families. Recently, businesses in some African countries have been adding crypto plugins to their phone payment options, adding another way in which locals can use cryptocurrency in their everyday lives.
We also need to understand that the share of consumers with Internet access among African countries is much smaller than in developed markets. Nevertheless, the share of crypto users among Africans is unusually high. It would seem that these figures are entirely compatible with the fact that Africa is an up-and-coming region; locals actively use smartphones, popular messenger services (secure messengers like Whatsapp). Africa has stepped from the cash economy immediately into a bright digital future, bypassing the traditional banking system. However, upon closer examination, it turns out that there are no fewer factors that hinder the development of cryptocurrencies than those that contribute to their development.
Other Developing Countries with a High Rate of Crypto Owners
The second and third highest cryptocurrency rates in the survey were recorded in Vietnam and the Philippines, respectively. Similarly, cross-border money transfers play a role in the everyday use of crypto. The Philippines’ Central Bank even has given several crypto exchanges the status of “remittance and transfer companies.”
Latin America is another world region that’s home to many crypto owners: Peru leads acceptance with 16% of respondents; Brazil, Colombia, Argentina, Mexico, and Chile also reach double digits. Switzerland and Greece are the countries with the highest adoption rate in Europe (11% each).
Japan was the country where the fewest people said they used or owned cryptocurrency. Only 4% claimed ever to have experience with crypto: the lowest indicators of the in-depth survey, together with Denmark.