Many people believe that Web3 is simply a speculative playground because it has the power to create millionaires overnight and because memes seem to be more successful than actual utility. Long-term builders and dreamers can quickly lose hope in the future of the industry. However, despite these perceptions, there are positive aspects to consider.
Blockchain and cryptocurrency are genuinely benefiting humanity, especially in emerging markets. Web3 technology is bringing about fundamental societal shifts by helping the underserved and underbanked populations and addressing the shortcomings of traditional financial institutions and beyond.
However, for these positive changes to continue, there needs to be more investment in the industry. It is important to support builders who are committed to driving change.
Emerging markets are leading the way in crypto adoption. According to the World Bank, as of 2024, 1.4 billion people worldwide still do not have access to banking services. Decentralization is fundamentally about addressing the uneven distribution of value. In Africa, limited access to banking services has led to the region embracing crypto adoption. Even in 2021, around 300 million adults in Sub-Saharan Africa could not access essential banking services. This lack of access severely limits people’s ability to conduct daily transactions, save, invest, or run a business. However, crypto is changing this narrative.
According to Chainalysis’ 2024 Global Crypto Adoption Index, developing nations dominate the rankings, with countries like India, Indonesia, and Nigeria leading the way. Sub-Saharan Africa had the highest adoption rate of Bitcoin (BTC) in the world as of 2023, with Nigeria ranking second globally on the Global Crypto Adoption Index. By mid-2023, Sub-Saharan Africa accounted for 2.3% of the global cryptocurrency transaction volume, receiving around $117.1 billion in on-chain value. In these regions, crypto serves practical purposes beyond speculation.
In emerging markets, we are witnessing the functional use of crypto rather than just its use as a speculative asset. Local entrepreneurs who understand the local problems are driving meaningful change, and new technological innovations are being developed for specific purposes. 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 and contribute to economic recovery from the COVID-19 pandemic. Non-fungible tokens (NFTs) have also become accepted as cross-border fundraising vehicles. Additionally, acute governance problems can drive adoption out of necessity.
An Indian city called Raipur recently put real estate records on the blockchain using an innovative encryption startup called Airchains. This blockchain-based solution aims to prevent forgery and reduce processing time from a month to three days. In developed countries, there would typically be an inquiry to consider such issues. However, Raipur had a tendering process and a strong desire to urgently solve a challenging problem.
Despite the potential in emerging markets, the funding for crypto projects still falls short compared to the funding available for projects in well-developed nations. In 2023, developed nations, particularly the United States, led the way with approximately $1.975 billion invested in Q3 alone. US-based companies accounted for 34.5% of all crypto venture capital funding. In contrast, emerging markets struggled to secure comparable funding, with Africa’s total venture capital investment being around $1 billion for the entire year. This highlights the challenges that projects face in these regions.
Recently, there has been growing recognition of the potential in emerging markets. Crypto investments should now focus on where mass adoption is happening. In emerging markets, crypto is seen as a functional tool rather than just a speculative asset.
Ayush Ranjan is the co-founder and CEO of Huddle01.
Please note that this article is for general information purposes only and should not be considered as legal or investment advice. The views, thoughts, and opinions expressed are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.