Finding Success in the Struggle: Crypto’s Presence in Declining Economies
Around the world, national economies are declining in value. As their legal tender inflates in value causing the purchasing value of the currency to decrease, many are now relying on cryptocurrency as a stable method of payment. As cryptocurrency becomes more relevant in modern society, it gains more prevalence in underdeveloped countries. It has gained such traction that these countries now have higher percentages of cryptocurrency users than that of more developed countries. Many users use it for person-to-person exchanges to circumvent legal restrictions their countries may have placed on cryptocurrency.
Nigeria now has the highest cryptocurrency percentage of any country in the world with 32%. With a legal currency of very low value, many in Nigeria rely on the United States dollar for purchasing power; however, there is a rarity to USD in the region which has led to more cryptocurrency use. With the 7th largest total population in the world, the 54th lowest GDP per capita, a ranking of 161 of 189 on the Human Development Index, and an inflation rate of 18%, the country ranked 8th in the Global Crypto Adoption Index and 3rd in Peer-to-Peer (P2P) trade volume. It is a true testament to how decentralized currency can put everyone on a more level standing as people are able to transact cryptocurrency to survive rather than an inefficient and unreliable national currency. Vietnam is at second place for the Global Crypto Adoption Index with 21% and the Philippines following closely at 20%. Argentina and Ukraine are also great examples of crypto being a solution for many citizens in a poor economy. With a greatly decreasing economy and an incredibly high inflation rate of over 40%, Argentina has seen tremendous growth in cryptocurrency usage. In 2020, one of Argentina’s largest crypto exchanges, Ripio, saw over a 250% increase in crypto users, going from 400,000 to one million. Similar to Nigerian citizens, Argentinians are buying and using crypto as an alternative to the native currency rather than the USD. This is due to the government placing restrictions on how much USD citizens can buy, $200 a month with a 35% tax! Other notable countries with high crypto adoption are Kenya, highest P2P exchange trade volume ranking, Latvia, the highest number of on-chain deposits ranking, and China with both the highest on-chain value received and on-chain retail value received (as of June 2020). The reason China ranked highest in both categories is because of China’s dominance in the exportation market. Chinese exporters are now accepting cryptocurrency as payment around the world and have found huge success in eastern Europe and various countries around the world, such as Nigeria. Obviously, the Chinese national government may soon derail China’s dominance in bitcoin adoption given recent crackdowns and regulation in 2021.
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