Developing countries have chosen crypto adoption

Against the backdrop of a dollar shortage and high inflation, residents of Bolivia are turning to digital assets. This is reported by Reuters.

The country is almost out of reserves of American currency, and inflation has reached a 40-year high. The price of boliviano on the black market has fallen by half since the beginning of the year, although the authorities are artificially supporting the official exchange rate.

Cryptocurrencies as an Alternative

In these conditions, Bolivians turned to cryptocurrency exchanges like Binance, Bitcoin, and the USDT stablecoin from Tether. They use digital assets to protect themselves from the devaluation of the boliviano.

According to the central bank, the volume of cryptocurrency transactions in October last year amounted to $24 million. Analysts believe that the figure has significantly increased since then.

The head of the Bolivian Blockchain Chamber, Mauricio Torreiro, compared the pace of cryptocurrency adoption in the country to that of Argentina and Venezuela. However, the overall market volume still significantly lags behind that of its South American neighbors.

Payments and Savings

In the city of Cochabamba, local entrepreneurs are actively implementing cryptocurrencies. The owner of the steakhouse, Pablo Unsuehta, has installed a crypto ATM that allows exchanging coins for Bitcoin through the Blink wallet. He also accepts payments through Binance accounts.

"If you go to the bank today, there are no dollars there. Paying for chicken with bitcoin is the most innovative thing our city can do," said Unsuita.

The owner of the spa salon, Karla Jones, offers discounts to clients who pay with cryptocurrency. According to her, this attracts young people and helps save funds.

Tether's CEO Paolo Ardoino sees this as a "quiet revolution." He published a photo from a Bolivian duty-free shop where goods are sold for USDT. In his opinion, digital dollars provide economic stability.

"Cryptocolonialism" as a response to the crisis

However, experts warn that the rise in the popularity of cryptocurrencies is not a sign of stability, but a reflection of desperation.

Former central bank head Jose Gabriel Espinosa noted that the digital asset market in the country is still "emerging." According to his estimates, the daily trading volume of USDT is around $600,000. This is a small fraction compared to the formal financial sector ($18-22 million) and the cash black market ($12-14 million).

Peter Houson, an associate professor at the School of International Development at Northumbria University in the UK, warned about the volatility risks for the population. He referred to what is happening as "cryptocolonialism," where companies persuade poor residents to invest their last money in risky assets.

Digital colonialism or independence?

State Strategies: From Mining to Reserves

The Kingdom of Bhutan has taken a different path. The country secretly built six mining centers powered exclusively by hydroelectric energy. The income from the rising price of Bitcoin allowed the government to increase the salaries of civil servants and strengthen its foreign currency reserves.

Bhutan's state bitcoin reserve has reached 12,062 BTC ($1.29 billion), which accounts for nearly 40% of the country's GDP. This has placed the kingdom among the top three global leaders in this regard.

Data: Arkham.

Cryptan Bhutan. How one of the most closed countries taught the world about "green" mining

This experience is being observed in other countries as well. A representative of India's ruling party, Pradip Bhandari, has called for the launch of a pilot project to create a government Bitcoin fund. He considers this a strategic step towards economic resilience.

Bhandari noted that the USA, China, Russia, and Brazil are actively developing their crypto initiatives without waiting for global consensus. In his opinion, clear regulation and the creation of a sovereign reserve will strengthen India's economy and protect investors.

Recall that ForkLog found out how Bangladesh is trying to combine its drive for innovation with the growing environmental crisis.

The Global South has led the race in cryptocurrency adoption. Experts' opinions