Digitization and advanced technologies would always draw an idea that it will be mostly blooming in developed countries, namely Japan, China, Europe countries and the US. The interesting point is, those countries mentioned are not on-par to be the international hub for cryptocurrencies, instead the developing countries are!
Have you ever wondered why most of the developing countries are priming in cryptos? Before we jump deeper into that cognitive thoughts, let’s check on which developing countries are down for the ‘crypto stop-centre’.
I bet you must have watched the Black Panther, Marvel movie franchise which fantasizes a green, peaceful country, HOWEVER there is a hidden gem inside, it’s the sophisticated technologies. That would be the best explanation to describe Bhutan. Despite the country is isolated on the Himalayan eastern edge, known for its dramatic landscapes, steep mountains and valleys, however it is among the earliest countries that issued its own digital currency, Prizm.
Widely known for its petroleum industry, Venezuela is not an exceptional to cryptocurrency. As most of developed countries are warding off from cryptocurrency for its volatility and fluctuation, somehow Venezuela instead giving options for its citizen to either using fiat or cryptocurrency in transactions. Its support on cryptocurrency is further proven by the establishment of Bitcoin ATM in the country.
Imagine the pink beaches with sea breeze touching your face? Bermuda might be the absolute place for you. Having the third oldest continuous parliament in the world, many would have never thought that the country is one of the earliest to embrace cryptocurrency. Last month, The Government of Bermuda declared it will accept cryptocurrency for tax payments, fees and other government services apart from establishing collaboration with a start-up company on blockchain technology.
Tequila! The famous-for folk’s art tradition and soda drink country permissions cryptocurrencies as a means of payment for all types of legal transactions, which may only be transferred electronically. Therefore, in the enactment of Mexico’s Law to Regulate Financial Technology Companies, it construes that cryptocurrency is considered as representations of value electronically registered.
The Bahamas or officially known as Commonwealth of the Bahamas does not have any regulation that specifically defines cryptocurrency in the country. The archipelagic state, per contra stated that the country’s existing regulations for national electronic payments services may also be applied to the cryptocurrencies. What is more, Bahamas’ advocation towards cryptocurrency can be proven with the current development programs for blockchain-based solutions, fintech and cryptocurrency companies.
Why Developing Countries Embrace Crypto?
Apart from lack of jobs and capital, inflation, poor access to markets, most of developing countries are struggling with poverty issues. As per United Nations, developing countries are categorized by the three aspects: 1) per capita income; 2) human assets; and 3) economic vulnerability.
In hope of overcoming isolation in the global financial system, most of the developing countries are embracing cryptocurrencies as it has potential to change lives and escape from poverty. Believe it or not, according to a report, there are 1.7 billion people in the world that do not have a bank account, but more than 4 billion have access to internet. So, with the aid of huge internet access, cryptocurrencies will act as an alternative means of payment, investment and purely virtual. Moreover, its decentralised nature indirectly gains user’s trust to further exercising cryptocurrencies. For this reason, cryptocurrencies are pertained as the ‘saviour’ in an economy crisis.
For example, in order to escape from the national economy crisis, Bank of Venezuela has almost made it to become the first financial institution in the country that gives an option to its customers to choose their mode of transaction between fiat and their cryptocurrency, Petro.
Corruption is one of the faced challenges in developing countries, pertaining this case, the illicit activity may occur within the countries as the government solely control national currencies. For the demand of fiat currency in developing countries tends to be high, therefore it becomes an instrument to all sort of life be it a stored value, etc. To a certain extent, it could fuel mistrust in national currencies especially countries that have political instability and high cost of living. Compared to cryptocurrency, cash is very difficult to trace. Therefore, if a government tend to be corrupted, the cryptocurrency can be a means to track every penny that is coming in and out.
The other reason for developing countries are embracing cryptocurrency is due to inflation. As the inflation is high but somehow, the citizens do not have the purchasing power. Hence, cryptocurrencies could be the best option for citizens to sell, invest or buy goods when the fiat currency is facing inflation.
Back in 2018, Turkey’s fiat currency, Lira for instance, was plummet while the price of Bitcoin shoots up. Despite the country is not rightly accept the money for legal tender, however some Turkish investors diverted to Bitcoin instead of Lira.
2020 is less a month away, and the fact that some developing countries are still in the same states – poverty, financial crisis, inflation, and more, the governments ought to do something! Embracing cryptocurrencies is not a part of ‘escapism’, but in putting the poor to the 21st century. Allowing cryptocurrency is deemed to bring out a huge percentage of poor countries from economy crisis.
So, should Malaysia be in the same pace? Definitely!
Why? It is simple, as the explanation goes …. wait no more!
What's Your Reaction?
Experienced for only two years in journalism industry would not be enough for her dedication in conveying informational news to readers. As a Malay Journalist in Techcryption-focusing on future technology, is something new for her to 'dive in' more.