Which Markets Could Benefit the Most from Crypto?

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Over the past decade, thousands of crypto tokens and crypto projects have made their way to the market, with a range of purposes from revolutionising transactions or [anti-money laundering] AML processes to allowing secure and transparent donations to charities. However, when the first cryptocurrency, Bitcoin (BTC), was created, its overarching goal was to allow more people to engage in the financial system without relying on banks or governments.

Many think of crypto as being purely for speculation, but innovations have allowed the technology behind crypto to be integrated into various processes, many of which people don’t think about. While these new use cases are no doubt a positive move for the crypto industry, it’s important not to forget the original idea behind digital currencies and to continue to explore which people could benefit the most from mass crypto adoption.

The effect on different markets will vary, but crypto could arguably have the most wide-reaching impact on emerging markets by revolutionising the financial system and allowing mass participation in the financial market for those currently excluded.

Early emerging markets

Crypto has the potential to have a huge, long-term impact on emerging markets. There are estimated to be 1.7 billion unbanked people worldwide, with the vast majority of these living in what are often considered ‘emerging markets’; cryptocurrency gives the unbanked population a new way to participate in the economy. With digital banking becoming the norm in many countries, it can cause difficulties for those with unbanked populations who aren’t able to transact digitally or have their wages paid into a bank account.

Established markets

Those in established markets also have everything to gain from crypto. With the digital economy set to overtake the outdated traditional economy, these countries will likely look to integrate crypto into their financial systems to ensure they can compete with the rest of the globe.

The USA is a good example of an established market that suffers from high costs for money transfers. Research has shown that the average cost for a domestic wire transfer in the USA is USD 25 – USD 30, while some companies offer free crypto transfers between individuals. 

But despite the USA being considered ‘established’, the Wirex and Stellar survey found lower levels of crypto awareness and usage than expected. 

This may be due to the dominance of the banking system in the USA, meaning Americans either aren’t aware of or aren’t seeking out alternative methods for remittance and banking. This demonstrates that even though many established markets have solid financial systems, there is still a place where crypto could benefit the average citizen, providing awareness increases.

While some don’t consider Singapore to be an established market, when it comes to crypto regulation the country possesses some of the most forward-thinking regulatory frameworks regarding crypto. Up to 86% of Singaporeans surveyed agreed that crypto was a viable alternative to traditional money transfer services. 

Singapore is ahead of the game when it comes to integrating crypto into day-to-day life and a good example of what the future of crypto could look like.

Established economies need to decide if they want to continue to keep up with the advancing digital economy or hold back and risk having fintech innovators move elsewhere.