Cryptocurrencies are developing an economy in the developing world
The Future. Many citizens in the developing world, including Cuba and Nigeria, are using cryptocurrencies to bypass strict government controls and partake in the global economy. While the unregulated nature of crypto could also allow for these same governments to fund illegal activities, it may be time to acknowledge that a decentralized, internet-based financial system may be a key avenue for impoverished people across the world to change their circumstances.
It’s all fun and games to talk about getting rich through cryptos, NFTs, and social tokens… but for much of the developing world, cryptocurrencies are bringing people into the global economy for the first time.
- In Cuba, citizens have bypassed economic sanctions by using sites such as Bitrefill, which allows people to sell gift cards for cryptocurrencies, which they can use to buy domain names or a streaming service subscription.
- Now, the communist Central Bank of Cuba is trying to regulate crypto use on the island, while the U.S. State Department is researching how to use it for remittance networks that bypass Cuba’s taxes.
- In El Salvador, controversial president Nayib Bukele made Bitcoin legal tender. There are now more citizens using the country’s issued Bitcoin wallets than there are in El Salvador’s entire banking system — a win for the chronically unbanked.
- In Venezuela, citizens are bypassing the country’s cutoff to the global financial system through peer-to-peer markets that let them exchange Bitcoin for cash.
- And all over Sub-Saharan Africa, Bitcoin trading volume rivals North America’s. When the Nigerian government put up capital controls, citizens started switching to crypto to get around the barriers.
There are even more crypto uses that are changing the international economy — including the rise of more globally-regulated stablecoins and even crypto-gaming platforms such as Axie Infinity. For many citizens under governments in the developing world, who have no intention of lifting them up financially, crypto may be their best shot.