Emerging Markets: Crypto where you least expect it.
Words you may not hear often in the crypto sphere: Jamaica, Kenya, Uruguay and Panama, yet these are just a few of the countries playing host to a growing group of venture-backed bitcoin companies that are using blockchain technology to tackle their national payment challenges. Even the government of Argentina, one of the richest countries at the turn of the 19th century, has defaulted on debts in the past. The result was that anyone saving in the Argentinian currency lost everything, becoming worthless because faith in the government was gone.
Wall Streeters may see Bitcoin as tulip bulbs for millennials, but for the long-suffering citizens of Venezuela or Zimbabwe, the cryptocurrency is emerging as a safe haven. Developing markets within second or third world countries, with high government debt levels and a sense of eroding currency value are ripe for the transparent, peer to peer system that Bitcoin and blockchain technology represents.
Let’s remember that “the highly developed countries in total comprise only 15% of the world’s population. In other words, 85% of the world’s population lives in places less developed than Kuwait” — Haseeb Qureshi (GP at MetaStable Capital). Those countries are increasingly considering the use of Blockchain to solve problems of institutional inefficiency, governmental instability and fail of a financial system.
Let’s take a look at some examples. In Haiti, it was used to rebuild a nation where property ownership information was lost after a catastrophic earthquake in 2010 and in Georgia, it was used to move land registry records from state institutions to Blockchain ledgers; and in many vulnerable countries it is being used to better track the flow of humanitarian aid and finance. Central, South American and African countries are embracing cryptocurrencies and using them daily for payments for goods and services. Kenya, in fact, is the world leader in digital and mobile money with over 75% of the adults in Kenya using a digital currency called M-Pesa. Hundreds of millions of developing-world residents are educating themselves to embrace digital currency bypassing their outdated banking systems. Yet still, over 2 billion adults remain unbanked.
While much of institutional money may fear smaller countries political unrest, domestic volatility, and supposed unskilled workforce, it is the former that blockchain technology can ease and the later that is untrue. Governments’ old world mentalities are failing while the people themselves are hungry for change, excited for opportunity, and becoming more and more qualified. 3rd world coding boot camps, shifting awareness and increased inclusion will bring countries long forgotten by silicon valley to the forefront. Furthermore it will be these emerging markets that will catch up to the rest of the world quickly and without hesitation.