• In emerging economies, inflation is pushing crypto acceptance

  • While the crypto sector has several applications, the most common appears to be as a hedge against growing inflation.

    According to a recent CoinMarketCap Twitter thread, inhabitants of countries in emerging economies dealing with inflation mostly use their crypto holdings as a hedge against their declining national currency.

    Venezuelans are embracing cryptocurrency to hedge against inflation.

    According to CoinMarketCap, Venezuela’s inflation rate is at an all-time high of 472 percent, forcing many inhabitants to turn to cryptocurrency. According to the survey, there are 2.9 million crypto users in the country, accounting for 10.23% of the population.

    Because they are a direct substitute for fiat currency, #cryptocurrencies are frequently regarded as a hedge against inflation, and many famous cryptocurrencies have proven to be just that.

    Other countries with high inflation rates, such as Brazil, Nigeria, Pakistan, and Colombia, have also embraced cryptocurrency as a viable alternative to their national fiat currency, according to the survey.

    Meanwhile, approximately 8% of US residents — who are also dealing with rising inflation — have entered the digital assets field.

    Crypto adoption is hampered by a lack of internet connectivity.

    According to the CoinMarketCap research, certain countries with high inflation rates, such as Sudan and Lebanon, which have over 200 percent inflation, and Syria, which has 139.46 percent inflation, are still low adopters of cryptocurrency.

    According to the report, only 0.91 percent of Sudanese inhabitants had adopted cryptocurrency, while the number in Syria and Lebanon is barely above one percent.

    This low adoption rate does not reflect residents’ attitudes toward cryptocurrency. Instead, it demonstrates the difficulties in obtaining crypto services due to limited internet connectivity and a lack of fiat on/off ramps. Internal discord could also be a factor.

    Stablecoins are preferred by residents of poor countries.

    A look at consumer behavior in these nations reveals that citizens in poorer countries prefer to invest in stablecoins such as USDT rather than volatile digital assets such as Bitcoin. Residents in wealthier countries, on the other hand, take larger risks since they prefer to invest in risky cryptocurrencies.

    CoinMarketCap stated that the development of DeFi-native stablecoins by MakerDao, Anchor Protocol, and others may someday assist individuals holding stablecoins in hedging against growing inflation.

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