Published: December 10, 2024
Countries like Nigeria, Türkiye, South Africa and the UAE are seeing considerable growth within the crypto space, pointing to a promising future for digital currencies.
Cryptocurrencies have experienced mixed fortunes over the past few years. From the highs of 2021, when values surged, to the crash of late 2022, and more recapturing some of their earlier appeal. Basically, the crypto economy has been marked by fairly dramatic cycles of boom and bust. There remains interest even though some would-be traders have lost interest: according to the blockchain analysis firm Chainalysis, ‘grassroots adoption’, best framed as retail investors, was down worldwide in 2023.
There was, however, one notable exception in the overall dip in grassroots adoption and this was in lower-middle-income countries, which account for around 40% of the world’s population. Here, adoption of cryptocurrencies shows no sign of slowing down. Chainalysis states that ‘this could be extremely promising for crypto’s future prospects’, explaining that trends that take root in fast-developing countries could have long-term sticking power.
Kate Leaman, chief market analyst at the global online trading broker AvaTrade, agrees. She points out that many people in lower income countries lack access to traditional banking services, meaning cryptocurrencies function as an effective alternative.
“In regions where the local currency is volatile or where banks cannot be accessed easily, cryptocurrencies are vital,” she tells EMEA Finance. “For instance, in countries such as Nigeria and Zimbabwe, stablecoins such as USDT [cryptocurrencies that maintain stable value and are often linked to real currencies like the US dollar] are used to protect their money’s value. Additionally, with cryptocurrencies it is easier and cheaper to send money across borders, benefitting people who receive remittances from family members overseas.”
This trend is particularly pronounced in Nigeria, one of the world leaders for crypto adoption. A 2022 study by cryptocurrency exchange KuCoin found that 35% of working age Nigerians are recent crypto investors, and that 52% of these crypto investors allocate more than half their assets to crypto. With the naira having substantially depreciated since the central bank floated the currency in June 2023, and prohibitively high fees for cross-border payments, cryptocurrencies have greater appeal. A similar rise is being noted in Türkiye, South Africa and parts of the Middle East.
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