Many Emerging Markets Are Now Increasing Their Crypto Investments

Various large countries globally, such as Nigeria and Pakistan, are now turning towards cryptocurrencies due to the economic turmoil. While government officials are bringing new ways to curb crypto activity, citizens continue to look up to cryptocurrencies as a hedge.

Since the U.S. is currently stuck in a political debacle, other regions are focusing on building frameworks for the crypto industry. It is worth considering the outlook and the evolution of the on-the-ground demand for virtual currency.

Additionally, it is getting more relevant with some major countries in the world dealing with staggering inflation, weak currencies, and autocratic control over the financial system. With people becoming more aware of cryptocurrency, they are now considering it as a hedge.

Nigeria and Turkey Going Through a Currency Devaluation

Nigeria, which has a population of around 218 million and is the sixth-largest country, is also going to devalue its currency with the new president taking charge to improve its balance of payments (BOP) and dollar shortages.

The Chainalysis global crypto adoption ranking shows that the country is in the 11th position. The Google Trends in the last 3 months shows that Nigeria is the first and second ranking country for searching the term “crypto” and “Bitcoin,” respectively.

Similarly, Turkey the 18th biggest country in the world with a population of 85 million people is also seeing a growing crypto adoption. The nation’s currency reached an all-time low as the nation braced for Erdogan’s come back to power in the runoffs on 28th May.

Kaiko, a crypto market data firm, published data showing that lira-based activities are significantly higher than euro-based activity. Many experts believe that this will continue to increase as people will look to invest in crypto to hedge against rising inflation.

Pakistan Seeing a Rapid Crypto Adoption Despite Fresh Bans from Government

Last week, the Pakistani government officially banned cryptocurrencies stating that the digital asset “will never be legalized” in the country to avoid fines and penalties by the FATF (Financial Action Task Force).

However, it might sound again a bit different from the FATF stance on the crypto market. Last Thursday, the organization’s issued a letter that focuses on the crypto regulation instead of a complete ban.

But let’s not forget that Pakistan has a tense relationship with FATF as the country has just exited its “grey list.” Furthermore, the country is also in a grapple with the worst economic crisis in its history.

It’s also not hard to see that the International Monetary Fund is also playing a role here. Pakistan is currently in talks with the organization regarding a bailout package, although negotiations seem stalled, due to IMF’s concern about the country’s political and economic issues.

Many experts believe that the country might not be able to secure external financing without the IMF. The organization has not been shy about its unease with crypto markets, and a few months ago, reports surfaced that it had applied crypto-suppression conditions to negotiations with Argentina.

Inflation and Currency Devaluation a Major Reason behind Growing Crypto Adoption

One of the major reasons that there is a growing adoption of cryptocurrencies in countries like Turkey, Pakistan, and Nigeria is high inflation which is leaving the local currencies to lose their value at a rapid pace.

The PKR (Pakistani rupee) has seen a decline of around 20% against the U.S. dollar year-to-date. It has also depreciated by more than 30% over the past year. The case is no different for the Turkish Lira which has also seen a massive devaluation in the last couple of years.

As a result, the citizens of these countries are going towards crypto assets to protect their money from devaluing.