Bitcoin Adoption Grows Rapidly In Emerging Markets: Here’s Why

Bitcoin was the first ever cryptocurrency to launch and even now it remains by far and away the most dominant form of digital money. Indeed, so strong is its primacy in the crypto world that it’s leading the way in terms of adoption. These days, Bitcoin is becoming increasingly prominent as a medium of payment and exchange in dozens of emerging economies, where people are more resistant to its renowned price volatility. 

A new study by Forrester, commissioned by AAX Exchange, reinforces this view with the finding that BTC is rapidly being embraced for everyday transactions. AAX’s survey found that BTC adoption and awareness is growing across emerging markets in regions such as Africa, Latin America, the Middle East, and Southeast Asia.

Just as important, the study found that consumers in these regions do not just see BTC as a speculative investment like most users in developed economies do – they’re using it for its intended purpose too. 

The results are all the more telling because Forrester surveyed 806 individuals spread across the above regions between February and June 2022, at a time when crypto was in decline. As part of the survey, Forrester also conducted a series of “qualitative interviews” with eight senior decision makers at leading financial firms and insurance institutions in the four regions. 

Bitcoin In Everyday Life

One of the most illuminating findings of the survey is that almost three-quarters (74%) of participants stated they are aware of BTC and its existing use cases. Moreover, another 52% reported an increase in BTC adoption from May 2021 to May 2021. 

There’s a general consensus that people in the four regions believe BTC will play a significant role in building the future digital economy, with 91% saying they see its importance growing in future. 

What’s more exciting is the surprising level of adoption of BTC across emerging markets. The findings of the study suggest that Bitcoin is positively thriving as an alternative form of money. In the Middle East and Southeast Asia, consumers have embraced Bitcoin as a means of money management. What that means is consumers in those regions are using BTC to save money to preserve the value of wealth. They’re also using it as an investment with the hope of making longer-term gains, and as a hedge to offset against the potential losses of other investments they make. 

Meanwhile, in Africa, Bitcoin has gained a foothold there as an alternative means of payment. The study found that 46% of African respondents primarily use BTC to make payments and transfer funds. Of those, 63% were using BTC to send funds to others domestically. Africans provided a variety of reasons for their adoption of Bitcoin, with 69% saying they were looking to take advantage of its lower fees, 68% citing its innovative nature, and 66% using it for pseudonymity. 

“A currency with no intermediaries involved is something exciting,” one Ugandan consumer said. 

Bitcoin is also proving popular in Latin American countries, where almost 40% of survey respondents confirmed that they’d received payments or made transfers in BTC. In another encouraging sign of adoption there, 53% of Latin American BTC users confirmed they had received 25% or more of their income in BTC over the previous 12 months. 

Asked what value Bitcoin provides, one Brazilian consumer said “Bitcoin helps customers gain complete control over their funds and allows them to send [money] anywhere in the world.” 

A Promising Future

Perhaps the biggest takeaway from the report is that it suggests Bitcoin adoption across emerging markets is likely to expand as more people become familiar with the cryptocurrency, thanks in part to its unique ability to bridge the digital transaction gap. Despite all of the price volatility of BTC, it’s still viewed as an excellent way to facilitate low-cost transactions, both domestically and internationally. 

As to why Bitcoin usage appears to be more entrenched in emerging economies than developed markets, Forrester speculated that one of the likely reasons for this is the volatility of domestic currencies in many of the nations it surveyed. 

Consumers in emerging markets have become accustomed to the volatility of their own national currencies, Forrester said, meaning that they’re less likely to be deterred by the ups and downs of crypto. Given that their own currencies can lose value too, consumers do not face the stark choice of stability vs wild volatility like those living in developer economies do. 

So not only is the volatility of BTC less of a factor, but it has significant advantages vs traditional forms of money. For instance, it enables faster, more secure, and lower-cost cross-border transfers than what local banks can provide. As such, consumers in developing economies see fewer disadvantages and more benefits to Bitcoin than their counterparts in the Western world. 

As a further advantage, consumers in developing countries cited the financial independence Bitcoin provides them. Holding funds in Bitcoin means greater privacy and control over their finances, consumers revealed. 

“Bitcoin is my own bank,” was how one consumer from Congo told it. 

AAX Head of Research and Strategy Ben Caselin summed it up when he said that Bitcoin is an alternative to traditional banking systems that are not only easier to access and more secure but protected from government interference. 

“We believe this study really shows us the potential of Bitcoin to power a different, fairer, and more inclusive financial system for everyone, not simply an investment vehicle for institutions and a wealthy minority,” he said. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice