Developing nations have been big on crypto.
Reports listing the countries with the biggest cryptocurrency use will point you to Vietnam, the Philippines, and Ukraine as the top three. Some use crypto like Bitcoin as an inflation hedge, others use it as an alternative to their country’s weak fiat currency, and others use crypto to get around remittance transaction fees. Yet, the common link between all these reasons is that people are simply trying to get their money’s worth.
Thus, it should be no surprise that the countries with the friendliest crypto regulations are mostly developing nations. From El Salvador to Slovenia, these countries do everything from encouraging the use of crypto in retail even to outright declaring it as legal tender.
But how do these countries decide why crypto is so valuable in the first place?
Recently, the Chamber of Deputies of Brazil, a federal legislative body, has passed a regulatory framework that legalizes the use of cryptocurrencies as a payment method within the country. While it still requires the signature of Brazil’s president, it is nonetheless great progress for the nation’s crypto scene.
The regulatory framework comes off the back of the growing popularity of tokenized assets. The nation’s Central Bank also shared its objectives to create a sovereign Brazilian digital currency pilot before the end of the year.
There’s also the fact that 10 million Brazilians, or about 5% of the population, trade crypto assets. Even though crypto traders use the popular exchange Mercado Bitcoin, the FTX collapse fuels movements in the Brazilian Senate and Chamber of Deputies towards the legislation of cryptocurrency in the country.
For Brazilians, crypto represents a new digital asset they can take advantage of. The millions of Brazilians using it show there’s already a use case for it — making adoption even easier. Simply put, Brazilians are using crypto because it is a new frontier with many opportunities for the taking.
There’s also news that Russia intends to launch a national crypto exchange of its own. What’s significant is that the Ministry of Finance and the Central Bank of Russia, which have disagreed in the past over the country’s regulation of cryptocurrencies, both support this initiative.
The reasoning behind wanting to launch a national crypto exchange is that it allows the government to control the circulation of crypto. One state official highlighted that the initiative only makes sense given the billions of tax rubles of lost tax revenues to the federal budget. By creating a national crypto exchange, the state brings crypto back into its income stream.
Crypto service operators tighten the corporate governance
Compliance has become a key element in global crypto adoption, as more and more states are realizing there are too many opportunities to be had with crypto. It’s even worth arguing that meltdowns like FTX can be prevented by instituting greater corporate governance.
At Pundi X, we conduct a client onboarding process which ensures that all the XPOS merchants are compliant with both Singaporean and their local regulations regarding cryptocurrency. The aim is to provide a reassuring crypto transaction experience for all customers through a trustworthy ecosystem.
Crypto and the underlying systems behind it are capable of adjusting to greater demand, increased regulatory scrutiny, and so much more. With more and more governments deciding that the opportunities it presents are too good to ignore, it is perhaps time the world listens.
A look at how nations and governments are re-examining crypto’s intrinsic value was originally published in Pundi X on Medium, where people are continuing the conversation by highlighting and responding to this story.
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