Opinion by Ayush Ranjan, Co-Founder and CEO of Huddle01
Many claim that Web3 is nothing more than a speculative playground, where millionaires are minted overnight and memes reign supreme over actual utility. Long-term builders and dreamers can quickly lose faith in the industry’s future, especially when faced with the harsh realities of media narratives. However, there are bright spots in this landscape.
Blockchain and Crypto: A Beacon of Hope for Humanity
Despite the prevailing narrative, blockchain and crypto technology is genuinely benefiting humanity, particularly in emerging markets. These regions are experiencing fundamental societal shifts as Web3 technology helps to address the needs of the underserved and underbanked. In addition, it combats the deficiencies in modern traditional institutions in finance and beyond.
The Investment Needs to Follow
Emerging markets dominate adoption rankings, with Africa leading the charge in crypto adoption due to limited access to banking services. According to the World Bank, 1.4 billion people worldwide remain unbanked as of 2024. Decentralization is fundamentally about addressing uneven value distribution. The industry needs to support more builders who are committed to driving change.
Africa: A Region on the Cusp of Crypto Adoption
Africa is one of the regions where crypto adoption is gaining momentum, mainly due to limited access to banking services. In 2021, around 300 million adults in Sub-Saharan Africa couldn’t access essential banking services. This lack of access severely limits people’s ability to conduct everyday transactions and save/invest, let alone run a business.
Crypto: A Practical Solution for Everyday Transactions
Crypto is changing this narrative by providing practical solutions for everyday transactions in emerging markets. According to Chainalysis’ 2024 Global Crypto Adoption Index, developing nations dominate the rankings, with countries such as India, Indonesia, and Nigeria leading.
Sub-Saharan Africa Leads in Bitcoin Adoption
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.
Functionality is Advancing in Emerging Markets
In emerging markets, we are 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 Demonstrating the Practical Use of Crypto
Initiatives like CARE’s pilot programs in Kenya and Ecuador, which distribute crypto-based vouchers to vulnerable groups, 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.
Adoption by Necessity
Acute governance problems can also mean adoption is growing by necessity. For example, 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.
Fund Adoption, Not Shiny New Things
Capital flows into crypto projects in emerging markets are becoming more significant, but 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.
Challenges Facing Emerging Markets
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.
The Recognition of Emerging Markets’ Potential
Lately, the recognition of the potential in emerging markets has grown. Crypto investment should now pay attention to where mass adoption is happening. Crypto is a functional tool, rather than a speculative asset, in emerging markets.
Conclusion
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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