Why developing countries are demanding crypto as legal tender
According to the World Bank, the number of people living in extreme poverty — on less than $1.90 per person per day — has been increasing in the past three years following the effects of COVID-19, rising global conflicts, climate change, and unchecked inflation.
For almost 25 years, extreme poverty levels were steadily declining before the disruption caused by the global pandemic. Furthermore, between 75 million and 95 million additional people could be living in extreme poverty in 2022 compared to pre-COVID-19 projections, majorly in developing countries.
The post-COVID period has seen developing countries face more challenges such as high crime rates, rising unemployment, political instability, and corruption, which translates to rising poverty levels. Due to this citizens lack an opportunity to be better, many of whom are unable to find the means to support themselves and their families financially. Notwithstanding, the issues faced in developing countries push the citizens to look for greener pastures elsewhere (mainly in developed countries), draining their own home countries of potential manpower and skills.
To this end, several countries are looking for solutions to the rising poverty, with crypto assets becoming increasingly popular across the globe. According to a seasoned Bitcoiner and co-founder of Philcoin, Dunstan Teo, “Crypto can provide not just a new stream of individual income, but also a new economy for governments to tap into to help rebuild their financial sovereignty”.
The rise of crypto as a legal tender across developing countries
In 2021, the world stood shocked as El Salvador became the first country to accept Bitcoin (BTC) as legal tender and hold Bitcoin as a reserve on the country’s balance sheet. The move opened up the global governments to start considering crypto as a legal tender, with the Central African Republic (CAR) joining the band, making BTC a legal tender earlier this year.
Shortly after, El Salvador’s president, Nayib Bukele, invited monetary authorities and central banks from 44 countries to the country’s Bitcoin Conference. The conference was largely dominated by representatives from African countries and other developing nations, with the meeting discussing “financial inclusion, digital economy, banking the unbanked, the Bitcoin rollout and its benefits in El Salvador.”
