Cryptocurrency Adoption in Argentina
From Argentina’s high inflation rates to Turkey’s currency devaluation to Nigeria’s economic crisis, people in these regions are beginning to turn their attention to cryptocurrencies and view cryptocurrencies as an important tool to combat economic distress, preserve asset value, and achieve financial inclusion.
Argentina has become the most actively adopting cryptocurrency in the Western Hemisphere in recent years, and the biggest reason behind it is that Argentina is plagued by an annual inflation rate of 276%. According to an analysis report by Forbes magazine, Argentina is far ahead in the cryptocurrency adoption rate (Cryptocurrency Adoption), especially in Binance, the world’s largest cryptocurrency exchange. The number of visitors from Argentina accounts for Binance’s total visits. 6.9%.
Since Argentina hopes to solve the problem of high inflation, unlike the trend of "meme coins" popular in the general cryptocurrency industry, the stable currency Tether (USDT) is more popular in Argentina. The value of stablecoins is usually pegged to the U.S. dollar at a ratio of 1:1. Considering Argentina’s high inflation rate, holding USDT has become a way for local residents to protect the value of their assets.
Maximiliano Hinz, head of Latin America at the Bitget exchange, pointed out that many people in the Argentine market will buy and hold USDT instead of using USDT to trade other cryptocurrencies (many people in the currency circle are used to using this method Convert the currency into a stable currency before starting to buy coins).
Although Argentina is friendly to cryptocurrencies such as Bitcoin, it faces regulatory challenges. In late 2023, with President Javier Gerardo Milei taking office, Argentina officially allowed the use of Bitcoin in legal contracts. However, so far none of Argentina’s major cryptocurrency exchanges are registered with the national securities regulator.
Cryptocurrency Adoption in Türkiye
Another country that has widely adopted cryptocurrency is Türkiye, which also has high inflation problems.
According to a research survey by KuCoin, Turkey’s cryptocurrency adoption rate has increased from 40% to 52% in the past year and a half. It can be seen that the Turkish people have an increasing interest in cryptocurrency as a means of fighting inflation. High interest and acceptance.
In Turkey, 58% of respondents said their main reason for investing in cryptocurrencies was to accumulate wealth in the long term, and 37% said it was to maintain value. Bitcoin is the most popular investment object, with about 71% of investors owning Bitcoin and 45% holding Ethereum and other stablecoins.
In addition, cryptocurrency has also provided a lot of assistance for local disaster relief. During the earthquake disaster in early 2023, a number of cryptocurrency exchanges, including Binance, Tether, Bitfinex, OKX, and KuCoin, donated more than $9 million for rescue, providing assistance to the search and rescue operations and affected residents at the time.
Cryptocurrency Adoption in Nigeria
According to Statista, as of February 2024, Nigeria and Turkey lead the world in the proportion of cryptocurrency holders. The proportion of cryptocurrency holders in both countries reached 47%.
As Nigeria faces a severe economic crisis, high inflation and currency devaluation have forced Nigerians to turn to cryptocurrencies to protect their purchasing power.
According to an August 2023 report by YouGov and ConsenSys, Nigeria is the most crypto-savvy country, even ahead of the United States and Europe. The survey found that 99% of respondents fully understood cryptocurrencies, and 70% understood the value, operation, and fundamentals of blockchain.
Among them, 90% of Nigerian respondents said they would invest in cryptocurrency within the next 12 months.
Although the Central Bank of Nigeria restricted local financial institutions from providing services to cryptocurrency companies in 2021, as the world began to pay attention to cryptocurrency regulation, the government also officially passed a financial bill in 2023 to tax digital assets and treat them as Asset Class.
At the beginning of 2024, Nigeria once again tightened regulations on virtual asset service providers, but these actions did not stop the people's enthusiasm for cryptocurrencies.
Cryptocurrency adoption in Nigeria can enable broader financial inclusion in addition to fighting inflation. Due to the lack of traditional local financial infrastructure, locals can participate in the global market through cryptocurrency and obtain financial services that are difficult to provide by the local traditional banking system.
As can be seen from the cases of Argentina, Turkey and Nigeria, cryptocurrencies have become a new solution in the context of economic turmoil and high inflation. People in these countries view cryptocurrencies as a tool to combat currency devaluation and inflation, while also seeing their potential to achieve financial freedom and build wealth over the long term.
In comparison, cryptocurrency adoption in Western countries is relatively low. Taking G7 countries as an example, the proportion of cryptocurrency holders in Japan is only 6%, while the United States only has 18%.
References: cointelegraph, decrypt, cryptonews
