Cryptocurrency traction in emerging markets
Initial findings from the Luno Future of Money survey, which took the views of more than 7000 respondents across Europe, Africa and South-East Asia helps to explain this phenomenon. As large global tech firms start to move into blockchain and altcoins, the research shows why early adopters, the most important audience for these firms, will probably come from emerging markets.
Marius Reitz, Luno general manager Africa, said: “As some of the world’s largest tech giants announce they are launching cryptocurrency coins, we believe developing markets will be the lead adopters. Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer.”
When asked if they thought a single global currency would make the current financial system better or worse, almost three times as many respondents from South Africa and Nigeria said it would make it better, compared with the UK.
“The data also identified why money is such a focus in emerging markets. When asked why money is important to them, the respondents said that it was “to secure my family’s well-being” (60percent) or to “pay for my education” Nigeria 25percent, compared to 8percent in the UK. A further question regarding the setting of a monthly expenditure budget found that 80percent of people in Malaysia; 65percent in Nigeria; 73percent in South Africa; and 74percent in Indonesia do, compared to 54percent in the UK. And 33percent in Indonesia compared to 0percent in the UK, are more likely to stay within the budget they set.
“It is very clear that if money is not simply a ‘nice to have’ and is vital for your future, then you spend more time understanding it, managing it, preserving it and to an extent being creative with how you maximise the use of it. Therefore if a cryptocurrency can provide a secure and cheaper means of exchanging value, better than the existing system, it will be used. This is why we believe that as new cryptocurrencies linked to global brands are introduced, they will find an important audience in emerging markets.
“These markets are also more likely to exhibit grass-roots level adoption (versus institutional),” said Reitz.