Developing nations have always lagged behind when it comes to implementing new technologies that the rest of the world is already using. However, it is encouraging to see that this gap is closing fast.
These days, many developing economies find themselves on the cutting edge of technology, even though various challenges still make it difficult to implement their visions fully. If you look at developments such as online casinos, you will find that they are available all over the world, even in developing countries.
However, if you click “fun 777 play” in a third-world country, you may not get all the features you would have had access to were you in, for example, a developed European country. These small differences are a sign of some of the obstacles that developing countries still need to overcome.
Role of Cryptocurrency in the Global Economy
While the concept of digital money may have seemed alien a few years ago, many governments around the world are already laying the foundations for a future built on crypto and blockchain technology.
As more people begin to accept crypto as an inevitable outcome of the advancement of technology, new ways of using digital systems in various industries are being discovered.
In the US, people have already witnessed first-hand the power that cryptocurrency has in the 2024 presidential elections. In the race for senate seats, some states were won as a result of massive election campaigns funded by crypto companies.
Opportunities for Developing Nations
With all the overwhelming evidence supporting the usefulness of crypto, developing nations can no longer sit back and allow the world to move on without them.
The following are a few opportunities that adopting digital assets can create in such economies:
1. Innovation and Entrepreneurship
Once crypto has been embraced by a government, its citizens will start to work on new ways to create solutions to existing challenges using this technology. New business models will also be developed, which can create jobs and further streamline various processes. Such a reaction leads to the creation of new industries, which is vital for any developing economy.
2. Access to Global Markets
A lot of business is now being conducted using digital currencies around the world. If developing countries want a piece of the pie, they have to first embrace crypto and create an environment where it will thrive within their country. Access to global markets will help small businesses within these countries to grow thanks to the improved cash flow.
3. Lower Transaction Costs
One of the biggest obstacles small businesses in developing countries face is the high cost of conducting global transactions. Often, buying from or selling to international sources can cost a lot of money. This makes such transactions difficult to conduct regularly.
However, with the use of a decentralized cryptocurrency, this will no longer be an issue, and businesses in developing countries can enjoy their profits without having to pay huge transactional fees.
4. Financial Inclusion
Many people in developing countries have the ideas and willingness to work that are required to create businesses and job opportunities. However, they lack the required funds and are, therefore, financially excluded from the market.
Cryptocurrencies have various technologies that can help with this, such as tokenization which allows partial ownership of assets. With the little money they have, people can invest and pool their resources until an idea becomes feasible.
Common Obstacles to Overcome
It is easy to get excited when reading about all these opportunities that can be created by adopting cryptocurrency. However, the other side of the coin also has a few obstacles that need to be overcome, such as:
1. Volatility
If there is one thing the crypto crash of 2018 taught the world is that the crypto market can be very volatile. While the majority of developing countries were spared the brunt of the crash due to limited access to this technology, the whole world witnessed the drama unfold over the next couple of years.
As such, market volatility is something that developing countries need to be well prepared for if they are to join the digital markets. Learning from the mistakes of the past and improving regulation and legislature are some of the ways to overcome this issue.
2. Technological Barriers
While the willingness and knowledge might be there, most developing countries are still woefully behind in terms of technology. It will be a long time before we see the likes of Silicon Valley being created in third-world economies.
This creates a bottleneck that slows down any plans for progress that are being considered. In many countries, things that developed nations take for granted, such as internet access, are not so easy to come by. As such, the development of blockchain technology in developing countries will always be a few steps behind.
3. Regulatory Uncertainty
Lastly, developing economies still have a long way to go in terms of regulation of the crypto landscape. Much of what is used is simply an adaptation of whatever rules and regulations developed countries are using.
However, such a technique means that this type of legislature may not be ideal for the developing economy in which it is being implemented. Besides the fact that it will not be as effective as possible, there is also a concern that these digital platforms will be used as a breeding ground for money launderers.
Such a situation further fuels the uncertainty surrounding the implementation of crypto in developing countries, which delays its adoption even more.
Final Word
The good thing about crypto being adopted in developing economies is that the pros outweigh the cons, which provides a lot of encouragement. With a little bit of work and help from developed nations, cryptocurrency can easily be adopted in developing economies.
However, it is important to be very pragmatic and not make the same mistakes of the past. A crypto meltdown would be very devastating for an emerging economy. That is why the advice in this article needs to be remembered when laying the foundation of a strong and long-lasting crypto landscape.
Header image: Photo by Jakub Żerdzicki on Unsplash
