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Emerging economies are constantly cited once decentralized finance (DeFi) and cryptocurrency use cases are discussed. However, there is a huge gap between the theories and the actual work on these surfaces.
Emerging markets remain proving to be the foundation of amazing creations. Whether out of a greater need or a broad pool of talents to draw from, the nations commonly held up by their "developed" counterparts remain proving to be sites of astonishing creation and growth.
Research shows that the fastest growing business areas are in the Middle East, Africa and Asia. Furthermore, these are not just micro-businesses, but huge-scale technology organizations that aim to compete on a global stage.
Once we talk about blockchain and cryptocurrencies, this is no different. In addition, emerging economies continue to consistently show use cases for these technologies at an incredible rate.
Several in the United States and Europe have the ability to consider Bitcoin as the next universal currency. As both, African, Asian and Latin American societies continue to put tokens to work for their benefit.
In terms of adoption, emerging economies remain well ahead. Data from a 2020 survey by Statista showed that lower-middle-income nations continue to invest and hold crypto at vastly higher rates.
Exemplifying, Nigeria showed that 34% mentioned that they have or use crypto, 20% in the Philippines. Comparatively, Germany and Japan remain at only 5% and 4% respectively.
What do emerging economies require?
Emerging economies have a huge focus on growth. This is because the initiative is that they are expected to grow to consume with “first world” standards. However, what many emerging economies lack is access to funds.
This is consistently simply because high unemployment is often a cause for concern. However, constantly employed inhabitants also have no possibility to easily enter, distribute or spend their funds.
This may be due to the volatility of local currencies, the lack of industries in smaller metropolises or rural regions, or regional instability.
Africa and blockchain
Johannes Schweifer, co-founder and CEO of CoreLedger, said in this special:
"Blockchain technology can solve relevant local problems in developing societies, and the regulatory frameworks that are constantly in place are more conducive to these improvements happening."
From a regulatory criterion, this is already remarkable. The USA has been circling around the regulation of cryptocurrencies and blockchain. As both, El Salvador has made Bitcoin legal tender.
While this is an extreme exemplification, the interest in seeking external solutions to institutions that have failed before is in the interest of emerging economies.
This is well illustrated by the violent attitude against the International Monetary Fund and the World Bank, especially in territories where their loans have only increased the burdens for the inhabitants.
For example, in Kenya, the inhabitants fought against a loan from the International Monetary Fund thanks to the public debt that the territory faces and corrupt politicians embezzling the funds.
However, without interest in these giant fiduciary funders, companies need to find alternative sources of liquidity. This is where cryptocurrencies come in.
Africa BTC
Supporting ongoing projects
Once we talk about projects that remain on the blockchain, the new local organizations are where a lot of innovation is.
Support and financing in the crypto society
Without monumental injections of funds from international players, the crypto society is constantly stepping up in support of projects. That is, through technical support, awareness or even fundraising.
A sample case is the CoreLedger grant program. Its aim is to contribute to the projects with its tokenization ambitions.
The company has already been successful in Argentina with farmers tokenizing their soybeans to increase liquidity and market entry. Schweifer stresses:
“A few years ago, an important part of the focus around blockchain technology was on its disruptive potential. One of the most famous themes of this change was effect initiatives. Bringing financial integration to the unbanked, providing digital identity possibilities to refugees and migrants, and obviously opening up local economies to the world. An important part of the known approach has moved away from this class of resolutions towards speculation. However, we still believe that blockchain technology can do a lot of good. "
This is where CoreLedger wants to invest. With people on the lot who require help to develop a plan that will help their societies and economies.
By providing login to an active sandbox, those in the program have the ability to test their use cases. Thus ensuring that they are functional, not just speculative.
Another example of a similar local plan is the Finka token. It is helping Bolivian ranchers to tokenize their assets, in this situation, the cows. Regional and external investors have the possibility to participate by buying the token to favor farmers. Everything is on the blockchain and it is not defined by borders.
Putting bitcoin in the economies of South African municipalities
However, not all projects directly support each other. Certain only provide inspiration. This is the situation in South Africa, where a scheme promotes the use and adoption of Bitcoin in nearby informal settlements.
Hermann Vivier was inspired by the Bitcoin Beach del Salvador plan. As a consequence, he introduced Bitcoin to surf instructors who work as part of his NPO, The Surfer Kids. Vivier explains:
“I spent June, July and August 2021 educating The Surfer Kids coaches on all things Bitcoin. As they both worked to detect and integrate spaza stores in the municipality that were willing to accept BTC as payment for groceries. "
And it incorporates:
“At the end of August, we had incorporated at least one store. We started paying The Surfer Kids coaches a small part of their salary in BTC. Which they spent on buying food in the municipality store ”.
So far, the plan, dubbed Bitcoin Ekasi, has incorporated 3 stores where trainers spend their BTC.
For Vivier, Bitcoin gives the possibility for those who live in low-income areas to save, invest and challenge recent prejudices and stereotypes about their financial interests:
“One of the most relevant lessons learned from the Bitcoin Beach plan is to understand that it is a mistake to think that the poor population is not interested in saving. In truth, low-income individuals simply never had access to an efficient form of savings. […] Fiat money is a melting ice cube. Even if you don't understand what inflation is or where it comes from, in no part are the effects felt more acutely than in societies where the population lives day by day, from check to check ”.
Kenya: non-blockchain economic integration, through currency
This "melt the money" initiative is notable in many nations. Looking back at Kenya, while the Kenyan shilling is not drastically volatile, it has been weakening. Furthermore, the entry and saving of physical cash is not straightforward, especially in rural regions.
This is where the Grassroots Economics plan aims to support. You want to empower local economies through currencies of community integration.
While these coins do not remain on the blockchain, they provide the same kind of support that they remain doing work on other crypto projects for.
Its objective is to defend companies from lack of funds and to encourage business and investment. As a consequence, empower those who use it to build businesses and pay for goods and services, creating better market security.
Why is it critical to pay attention to the economies of the entire developing world?
While Europe, the US, and China are making headlines with their crypto news, a large part of this concerns the recent ups and downs of the market.
In developing countries, the use of this technology is usually more comfortable. For example, remittances from cross-border migrants have been used on a much larger scale in lower-middle-income countries than on the "developed" planet. Schweifer explains:
