Crypto Payments in Emerging Economies: Case Studies and Impacts

Crypto Payments in Emerging Economies: Case Studies and Impacts

In recent years, the world has witnessed a remarkable surge in the adoption of cryptocurrencies as an alternative form of payment. Cryptocurrencies have the potential to address longstanding issues related to financial inclusion, cross-border transactions, and economic empowerment.

Beyond being just digital assets, cryptocurrencies have extended their influence into the realm of payments, presenting a novel solution with profound implications, particularly for emerging economies.

Financial Inclusion and Accessibility

One of the most compelling narratives surrounding cryptocurrency adoption in developing economies is the promise of financial inclusion. Millions of people in these regions lack access to traditional banking services, leaving them excluded from the formal financial system. Cryptocurrencies offer an avenue for these underserved populations to participate in global economic activities without the need for a traditional bank account.

In Kenya, the success story of M-Pesa, a mobile money platform, paved the way for further experimentation with alternative financial solutions. The BitPesa initiative emerged, allowing users to send and receive remittances using Bitcoin. This provided a cost-effective and swift alternative to the traditional remittance channels, enabling families to receive funds from abroad more efficiently.

In fact, Kenya is leading Africa's adoption of cryptocurrency with an estimated 10.7% adoption rate as of 2022. While there is no outright ban on cryptocurrency in the country, it still stands in a legal grey area as future regulations may impact its performance.

Afghanistan, which is currently ruled by the Taliban, has little to no exposure to the international market with payment companies like PayPal, Venmo, Western Union & Swift no longer operational in the country. The citizens have lost all opportunities to connect to the outside market. This is where cryptocurrencies enter the landscape and provide a sight of relief to its citizens.

Afghanistan ranked 20th in the world crypto adoption index back in 2021 but the Taliban crackdown on cryptocurrency in late 2022 led to widespread arrests of crypto dealers and businesses, leading to a crypto exodus in the country. Given crypto privacy and anonymity, it is still possible for citizens to access crypto through P2P but given the political climate of the country, people need to exercise extreme caution when dealing with crypto.

Mitigating Inflation and Economic Instability

Developing economies often grapple with high inflation rates and currency devaluation, eroding the purchasing power of their citizens. In countries like Venezuela, Turkey, Argentina & Zimbabwe, where hyperinflation has wreaked havoc on local economies, cryptocurrencies like Bitcoin have become a lifeline for citizens seeking to preserve their savings.

Venezuela is one of the most rapid adopters of cryptocurrency on the globe. In addition to holding crypto as a long-term hedge, crypto is also used for day-to-day transactions. Back in 2020, crypto payments processor Cryptobuyer announced a deal with Venezuelan payments firm Megasoft to bring crypto point-of-sale capabilities to more than 20,000 merchants across Venezuela.

In May '23, Zimbabwe launched a gold-backed digital token, the latest attempt by the government to fix its decades-long battle with hyperinflation. While critics have pointed out that this move will not essentially fix the broken currency of the country, there is some enthusiasm amongst market players in the country as the central bank of Zimbabwe received 135 applications for a total of 14.07 billion Zimbabwean dollars to buy the gold-backed cryptocurrency.  

Argentina is another country that is suffering from hyperinflation and a weakened economy, and despite the government's attempt to discourage crypto usage as is evident by its latest ban on payment providers in the country from dealing with digital assets, the country sees one of the highest adoption rate of cryptocurrencies in the world.

In a 2022 survey, roughly 60% of respondents in Argentina said they had "a lot" or "some" trust that Bitcoin and other cryptocurrencies would perform well in 1–2 years.

Turkey hit an inflation rate of 85.51% in October 2022, as prices increased for almost every purchase in the country, and citizens relied on foreign currency as a refuge. It is quite common in the country to use the US dollar for gold as an inflation hedge so crypto's acceptance wasn't a foreign concept to the people there.

Turkey took at #12 spot in the global crypto adoption index in 2022 and while crypto remains in a legal grey area, in 2021, the Central Bank of the Republic of Turkey (CBRT) issued a regulation stating that “crypto assets cannot be used directly or indirectly for payments” This regulation effectively banned the use of cryptocurrencies for payments in Turkey.

But despite the soft ban crypto usage still remains high in the country with many using it as an investment hedge against its failing currency.

Cross-Border Trade and Remittances

Cross-border transactions can be cumbersome, expensive, and subject to intermediaries that take a cut of the funds being transferred. Cryptocurrencies eliminate these barriers by enabling borderless transactions with minimal fees.

The Philippines, for instance, has witnessed an increase in the use of cryptocurrencies for remittances from overseas Filipino workers. By using cryptocurrencies, these workers can send funds to their families with reduced fees and faster processing times compared to traditional remittance methods.

The Philippines is one of the largest remittance markets valued at over $35 billion dollars and companies are already using blockchain technology to provide faster and cheaper international payments. Digital payment firm Strike is expanding its international money transfer service that runs on Bitcoin’s Lightning Network to the Philippines.

Nigeria is another country that is seeing a big uptick in crypto remittances. According to a global survey, Nigeria has one of the highest crypto adoption in the world with a 10.3% adoption rate. In 2022, according to a Chainalysis report, Sub-saharan Africa accounted for $100 billion in on-chain cryptocurrency volume, 16% higher than in 2021.

Similar to the Philippines, Strike, partnered with Bitnob, a Nigerian payment company by introducing a "Send Globally” feature, enabling instant, low-cost payments to Africa.

In May '23, a new finance act was signed that will tax gains from digital assets at a rate of 10%.

Entrepreneurship and Economic Empowerment

Cryptocurrencies also empower individuals in developing economies to become entrepreneurs and participate in the global digital economy. The rise of freelancing platforms that pay in cryptocurrencies has enabled talented individuals from these regions to offer their services to clients worldwide. This not only creates opportunities for income generation but also helps bridge the income gap and reduce unemployment rates.

LaborX is a global talent marketplace for cryptocurrency payment for freelancers, gigs on a short-term basis, or permanent positions. Clients and freelancers are able to enter into smart contract agreements built on the Ethereum Blockchain. This ensures smooth payments and job protection.

Other popular platforms include Ethlance, CoinGigs,, CryptoGigs, Coinbase Earn.

Challenges and Considerations

While the adoption of cryptocurrencies in developing economies presents numerous benefits, it also comes with its share of challenges. Regulatory uncertainty, lack of infrastructure, and limited technical knowledge can hinder the widespread adoption of crypto payments. Moreover, the volatile nature of many cryptocurrencies can pose risks to those who are not familiar with the technology.

Governments in developing economies often grapple with how to regulate cryptocurrencies effectively. Striking a balance between fostering innovation and ensuring consumer protection is a delicate task. Some countries have chosen to embrace the technology and create favorable regulatory environments, while others have taken a more cautious approach.


The case of developing economies adopting crypto payments underscores the transformative potential of these digital currencies. From enhancing financial inclusion to providing a hedge against economic instability, cryptocurrencies are reshaping the financial landscape for the better. By leveraging blockchain technology, these nations can create more transparent and efficient payment systems that empower their citizens and connect them to the global economy.

Cryptocurrencies have the ability to drive positive socio-economic change and uplift communities that have long been marginalized by traditional financial systems. As the world continues to evolve in the digital age, the lessons learned from the experiences of these developing economies can inform and inspire a more inclusive and equitable financial future for all.