In Lagos, Nigeria’s commercial capital, a software coder bills her client in London and is paid in bitcoin, sidestepping a costly banking system and the naira currency’s miserly official exchange rate. In São Paulo, Brazil, a dentist puts his monthly savings into an exchange traded fund investing in a basket of cryptocurrencies that is the second most popular ETF on the local bourse. Individuals and businesses in Vietnam invest, trade and transact so much in bitcoin and other cryptocurrencies that the south-east Asian nation has the world’s highest rate of crypto adoption.
In advanced economies, cryptocurrencies are viewed by many in the financial world with suspicion — the domain of zealous “crypto bros” and a speculative and highly volatile fad that can only end badly. Regulators in Europe and the US have issued stark warnings about the dangers of trading crypto.
But in the developing world, there are signs that crypto is quietly building deeper roots. Especially in countries which have a history of financial instability or where the barriers to accessing traditional financial products such as bank accounts are high, cryptocurrency use is fast becoming a fact of daily life.
“While everyone was paying attention to [Tesla chief executive] Elon Musk’s tweets, and which institutional investor or CEO was saying what they thought about bitcoin, there was this entire story unravelling in emerging markets around the world that’s really powerful,” says Kim Grauer, director of research at Chainalysis, a leading data company in the sector.
“There’s a massive crypto footprint in many of these countries . . . [and] a massive amount of entrepreneurial opportunity.”
Chainalysis ranks Vietnam first for crypto adoption worldwide — one of 19 emerging and frontier markets in its top 20, with only the US among advanced economies making an appearance at number eight in 2021. “It’s very striking this year, [adoption] is a story of emerging and frontier markets,” adds Grauer.
Separate data from UsefulTulips.org, tracking bitcoin transactions on the world’s two biggest peer-to-peer crypto trading platforms, show that in the past few weeks, sub-Saharan Africa has overtaken North America to become the geographical region with the highest volume of this kind of crypto activity.