As the world grapples with the concept of Web3, many claim it’s nothing more than a speculative playground where millionaires are minted overnight. Memes seemingly win out over actual utility, causing long-term builders and dreamers to lose faith in the industry’s future. However, despite these narratives, there are indeed bright spots.
Blockchain and Crypto: Benefiting Humanity
Blockchain and crypto are genuinely making a positive impact on humanity, especially in emerging markets. They’re helping address societal shifts by providing financial inclusion and combating the deficiencies of modern traditional institutions in finance and beyond.
Investment Needs to Follow
The investment community needs to recognize the potential in emerging markets. According to estimates from the World Bank, 1.4 billion people worldwide remain unbanked as of 2024. Decentralization is fundamentally about addressing uneven value distribution. The industry must support more builders who are committed to driving change.
Emerging Markets Dominate Adoption Rankings
The adoption of crypto and blockchain technology is not limited to developed countries. In fact, emerging markets are leading the charge in terms of adoption rankings.
Africa: A Leader in Crypto Adoption
Africa is one of the regions that’s been at the forefront of crypto adoption. This is mainly due to limited access to banking services, which severely limits people’s ability to conduct everyday transactions and save for the future.
Statistics on Cryptocurrency Adoption in Sub-Saharan Africa
- According to Chainalysis’ 2024 Global Crypto Adoption Index, developing nations dominate the rankings, with countries such as India, Indonesia, and Nigeria leading.
- As of 2023, Sub-Saharan Africa had the highest Bitcoin (BTC) adoption rate in the world, with Nigeria ranking second globally on the Global Crypto Adoption Index.
- By mid-2023, Sub-Saharan Africa accounted for 2.3% of global cryptocurrency transaction volume, receiving around $117.1 billion in on-chain value.
Functional Use Cases
In emerging markets, we’re witnessing the functional use of crypto rather than just its use case as a speculative asset. Local entrepreneurs with first-hand insights into local problems drive meaningful change, and new technological innovations fit for purpose.
- Initiatives like CARE’s pilot programs in Kenya and Ecuador demonstrate how crypto can provide access to essential goods and services while fostering economic recovery from the COVID-19 pandemic.
- Non-fungible tokens have become accepted cross-border fundraising vehicles.
- Acute governance problems can also mean adoption is growing by necessity.
Real-World Applications
Recent examples of blockchain technology in action include:
- The Indian city of Raipur recently put real estate records on the blockchain with an innovative encryption startup called Airchains. This blockchain-based solution aims to prevent forgery and reduce processing time from a month to three days.
- In developed countries, there would typically be an inquiry to consider the issue. Raipur, however, had a tendering process and a strong desire to solve a challenging problem urgently.
Fund Adoption, Not Shiny New Things
While capital flows into crypto projects in emerging markets are becoming more significant, they still fall short compared to the funding available for projects in well-developed nations.
- In 2023, developed nations, particularly the United States, led with approximately $1.975 billion invested in Q3 alone, with US-based companies accounting for 34.5% of all crypto VC funding.
- In contrast, emerging markets struggled to secure comparable funding, with Africa’s total venture capital investment around $1 billion for the entire year, highlighting the challenges projects face in these regions.
Conclusion
Crypto is a functional tool, rather than a speculative asset, in emerging markets. Investment should now pay attention to where mass adoption is happening.
Ayush Ranjan is the co-founder and CEO of Huddle01. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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