In this article, wee will continue to explore other drivers behind Bitcoin's adoption and look at the migrant workers trend. They have to send back home bns of USD.
Intermediary fees are usually very high; therefore these workers are using more and more Cryptocurrencies in order to preserve wealth and have faster and less expensive transactions.
We will look at the most significant example: India.
Migrant workers abroad
2 major application for cryptocurrencies in Inda:
- Used as a cross-border remittance currency
- Asset to protect wealth against depreciation
These remittances are very important for many emerging economies
In 2018, Indians sent more than $80bn back home and paid as much as $5.67bn in fees to intermediaries.
As mentioned in one of my previous blogpost 👑 Why Bitcoin will be crowned the global reserve currency 👑 - Part 1; Cryptocurrency is used as a vehicle to convert Indian Rupee into other more stable fiat currencies.
According to blockchain media The Block, as of 2020 Q1, cryptocurrency exchange Bitso has captured more than 2% of U.S. to Mexico remittance market, even Spanish banking giant Santander is now bringing its Ripple-powered payment solution to Mexico this year to catch the trend.
What is true for India is also for Mexico and to a larger extent Africa. LocalBitcoins marketplace is also reaching ATH in South Africa or Nigeria (Africa Is Experiencing a Crypto Renaissance ).
The value of Indian Rupee is not stable, especially during the COVID-19 epidemic. Due to foreign exchange regulations, it is difficult for Indian citizens to buy USD.
Depreciating Rupee vs USD
Paxful & Localbitcoin have seen increased volumes for the past 12 months
OKEx and Kraken see, to be the biggest Exchange winners
Below is the increase in website traffic from India to different exchanges over Q1-2020
India has more than 1.3bn inhabitants and will be the most populous country in the next few years, it represents 3.3% of thhe world's GDP and is growing at >+6.8%.
In addition, it is a Tech friendly country and has a young tech savvy population.
Bitcoin was the first asset class that started from the bottom up ! Retail "investors and users" adopted it BEFORE Investment Funds, States, Organizations...
I also believe it will be a revolution that will come from what we call "emerging economies" as they are the one who need it the most at the moment. But as you know, with the current financial environment and quantitative easing, it will become apparent to everyone that Governments CANNOT be trusted with the money creation process.
Historically, Central Banks have been created top have some kind of neutrality/independence. As we can see in Europe/US, this is no longer the case and CBs are now serving politicians agendas.
Sources:
- https://cointelegraph.com/news/report-high-remittance-fees-and-unstable-rupee-drive-crypto-adoption-in-india
- https://blog.coinpaprika.com/updates/mapping-out-indias-blockchain-ecosystem-coinpaprika-okex-report/
- https://cointelegraph.com/news/africa-is-experiencing-a-crypto-renaissance
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