In the last few years, adoption of cryptocurrency has continued to grow in emerging markets.
The 2022 Global Crypto Adoption Index released by blockchain analysis firm Chainalysis showed the Top 20 countries that had the most people put the biggest share of their money into cryptocurrency. Emerging markets dominated that list with 18 out of 20 countries including Vietnam, Nigeria, Morocco, Nepal, Kenya, Indonesia, Thailand and Argentina. The United States and United Kingdom were the only two developed markets featured in the Top 20.
What is driving the interest and appeal for crypto in emerging markets? High inflation, unstable fiat currencies, regulatory and banking system failures are just a few factors.
In emerging markets, saving in a stable foreign currency like the US Dollar has historically been seen as a way to guard against inflation and local currency volatility. However, local regulations often meant there was limited access to getting or holding foreign exchange, which made crypto attractive as an alternative way to store value.
Stablecoins like USDC can be especially appealing in emerging markets due to their stability and accessibility. Because stablecoins have their value pegged to the value of a more stable fiat currency or commodity, they are less volatile compared to crypto currencies like Bitcoin and Ethereum.
It remains to be seen whether the current crypto adoption trends are sustained into the future for emerging markets.
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