Over the years, more and more people have adopted cryptocurrencies like Bitcoin as a vehicle for financial freedom and a safeguard for savings. The largest cryptocurrency by market capitalization is generally preferred by those who want to protect their money against political and economic unrest.
Despite this, not everyone facing economic hardship can dive straight into the flagship cryptocurrency or any other digital asset with volatility risk. A recent article by former NFL player and Bitcoin advocate Russell Okung has sparked a discussion on the adoption of Bitcoin and stablecoins in Africa.
Stablecoins preferred to Bitcoin in struggling economies
Professional athlete Russell Okung sparked a debate on X (formerly known as Twitter) after sharing his experience advocating for the Africa Lighting Network. Okung, known for his advocacy for Bitcoin over the years, explained that this experience caused him to face a "cold, hard realization" about his perspectives on the adoption of the cryptocurrency in Africa.
In the post, the former NFL player explained that he found people were more interested in USDT before Bitcoin despite his efforts to champion the flagship cryptocurrency:
They wanted USD, even if they were synthetic versions.
Members of the crypto community have shared their thoughts on the topic. Many users, including Bitcoin podcaster Peter McCormack, pointed to similar experiences in Africa and countries like Argentina and Lebanon.
Individuals living in underdeveloped countries or struggling economies are turning to “more stable assets,” as many pointed out in the responses. Without a doubt, exposure to a currency like USD through stablecoins seems to many to be a better and safer option than their devalued national currency.
A recent report from Mexican crypto exchange Bitso revealed data suggesting that stablecoin adoption is favored over Bitcoin in countries like Argentina and Colombia.
Analysis of data from the exchange shows that both Latin American countries have high crypto adoption. However, due to their struggling economies, most users on the platform revolve around stablecoins like USDT and USDC instead of Bitcoin.
During the discussion, another X user pointed out that these struggling economies do not offer crypto enthusiasts the “luxury” of considering the long-term benefits of holding Bitcoin as a “store of value,” because their short-term needs outweigh any future compensation. they could receive.
Stablecoins: a springboard for crypto enthusiasts
Austin Campbell, founder and managing partner of Zero Knowledge Consulting, took Okung's position to share his perspective. Campbell noticed the same adoption pattern as Okung during his time at Paxos, observing people's preference for USD stablecoins as a digital asset to hold their money.
However, the stablecoin philosopher does not consider that this behavior comes from ignorance. Instead, he believes it fits with understanding Bitcoin as a store of value rather than an everyday transaction cryptocurrency.
Campbell made a comparison between gold and Bitcoin to further explain his point of view. In his comparison, he pointed out that people do not pay with gold for everyday items, like sandwiches. Instead, they store an asset like gold and partially resell it from time to time for “a more liquid fiat currency, with which we buy sandwiches.”
According to the professor, cryptocurrencies will be no different in the long term, as no single form of money is “good for liquid, deep transactions at any time and a good store of value.”
However, Campbell considers that choosing to leave local financial systems, even if they are USD stablecoins, “is still a significant improvement over most local systems in many countries.”
Finally, angel investor Stephen Cole expressed a similar view. Cole shared his acceptance of USD stablecoins as an “important part of the journey” toward Bitcoin ultimately replacing fiat currency. The investor sees stablecoins as “a lifeline for many people who face hyperinflation and are not able to think about long-term savings.”