Perhaps, mass adoption might occur in places we least expect
Three Common Traits of Countries Welcoming Crypto
Over the past month, I've immersed myself in Vietnam, exploring its bustling blockchain market. The most striking takeaway? Some Vietnamese Web3 startups are focusing their efforts on Africa and Latin America. Despite Vietnam leading the global 'crypto adoption' race, these startups harness their local development capabilities and tech prowess to lure customers from Africa and South America.
This intriguing trend is consistent with my interviews with Web3 fintech companies in South Korea. Some African nations have already mainstreamed crypto payments. This shows a shift away from developed nations, plagued by complex regulations, to places with less developed economies and infrastructures, where businesses can operate freely.
Initially, I struggled to grasp this phenomenon. It seemed transient, exceptional, and tricky to tie to 'mass adoption.' But upon further exploration and understanding in Vietnam, I uncovered a possibility: our stereotypical crypto users may unexpectedly emerge from developing countries. This revelation uncovered a new potential: unforeseen developing nations might soon become strategic users of crypto.
Take Salvador as an example. It is the first country to recognize Bitcoin as legal tender. Similarly, countries like the Central African Republic embrace tech advancement and innovation, integrating crypto into daily life.
So why is crypto more welcomed in these countries compared to more developed nations? Here are my three personal observations:
First, these places lack traditional capital market infrastructure. The existing capital markets are underdeveloped, and fail to provide the benefits of finance that people in more developed nations are accustomed to. Moreover, faith in central banks is shattered; they can't control price or unemployment. Therefore, the benefits and use of crypto feel nearer and more relevant to the citizens here.
Second, unstable regimes utilize crypto as a political agenda. As mentioned, these countries lack a reliable capital market infrastructure. This breeds discontent among the populace who are privy to global happenings online. Consequently, politicians use crypto as a political tool, positioning it as a solutions for a corrupt and incompetent central bank and a path to wealth for all citizens. Most developed nations are relatively politically stable (When I say relatively stable, it means no military coup d'État), viewing crypto as more of an unregulated and risky asset class needing caution, not a political agenda.
Lastly, there's a very strong desire for quick wealth accumulation. People here often grapple with a GDP below $1,000, a scenario where buying one NASDAQ stock may require a year's worth of work. It's nearly impossible to amass wealth with normal expected returns even when adjusted for economic growth. The education and social infrastructure leave much to be desired. So, they are more eager for the possibility of rapid wealth creation in volatile markets like crypto despite the risks.
Ironically, all these seemingly negative factors might provide a solid user base for unexpected mass adoption. In a crypto ecosystem, we expect a balance of Web3 projects, content creators, developers, and users. Even without an abundance of Web3 companies and developers, the potential for a large user base might begin in places we have yet to consider.
