By @ivyfanshao
Crypto presents two faces in different regions: it is a speculative object in developed areas and a financial firestarter in emerging regions. When a country's economy faces collapse, Bitcoin and stablecoins take the opportunity to gain popularity among the public, as seen in Ukraine, Turkey, and Argentina. Over the past decade, the Turkish lira, Argentine peso, and South African rand have been among the world's three weakest currencies.
In regions where fiat currencies are weak, there are foreign exchange controls, and mainstream currencies like the dollar and euro lack liquidity, Crypto finds fertile ground—providing local residents with tools for value storage and financial freedom.
I once heard a friend from Argentina talk about using Crypto to pay for his clinic fees, renew his Spotify subscription, and shop at the supermarket. This is a scenario I cannot imagine. To understand the world from more perspectives, I interviewed residents from seven countries and regions during my time at ZuConnect, attempting to explore the role of Crypto from the perspective of payment finance and how its adoption affects local life.
Image: Crypto adoption rates in 2023, with Nigeria, Vietnam, Turkey, and Argentina ranking 2nd, 3rd, 12th, and 15th respectively. Source: https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/
1. Turkey - 52% of Turkish adults invest in Crypto, financial freedom, and relaxed regulations#
Overview#
With inflation reaching 80%, no foreign exchange controls, and the lira freely traded against the dollar and euro, Turkey has a highly developed banking system with easy account openings and low KYC requirements.
Low investment threshold for crypto: Local licensed exchanges in Turkey (binance tr & coin tr) allow direct deposits and withdrawals to bank accounts, and even cash transactions (in dollars/lira/euros) at offline stores. There are many shops in bustling areas where fiat currencies can be exchanged for crypto, with real-time prices flashing like a barrage. These cash exchange shops operate legally and must pay taxes to the government. However, crypto payments are illegal, as merchants report their income annually, and income tax is a core source of government revenue.
Free flow of foreign exchange: Individuals face no currency exchange restrictions, while corporates have an upper limit of 800,000 USD. There are numerous currency exchange shops that do not require KYC, making it easy for Turks to hold dollars and euros for savings.
Image: Trading volume of USDT/TL far exceeds that of other emerging market currencies.
In 2021, the lira collapsed against the dollar, and USDT/TL even surpassed USDT/USD in trading volume at one point.
Image: The collapse of the lira against the dollar in November 2021, with daily crypto trading volume approaching half of Turkey's daily foreign exchange trading volume.
Cross-border remittances: Local PayPal has been unavailable since 2016 due to regulatory issues, with Wise or Western Union being the general alternatives.
Cards as mainstream payment: The use of debit and credit cards is widespread in Turkey. According to data from the Turkish Interbank Card Center (BKM), the total number of credit and debit cards in Turkey reached 291 million in 2021, including 150 million debit cards and 83.8 million credit cards. In terms of total card numbers, Turkey ranks first in Europe. The total transaction volume using credit and debit cards in Turkey reached 17.1 trillion lira in 2021.
Turkey's banking sector is developed, far surpassing Europe. There are over 50 commercial banks, most of which can provide an experience comparable to Alipay.
Relaxed fintech regulations:
Even with a developed banking system, Turkey still has a high percentage of unbanked individuals, at 26%. A payment product outside the banking system, Papara, has 17 million users and only requires a local Turkish phone number and email, with no ID KYC needed, allowing for zero-fee transfers. It collaborates with Mastercard to issue physical cards, regulated by the Turkish central bank, while also offering a degree of financial freedom and convenience akin to decentralized wallets.
Case Study: Papara, a payment product outside the banking system#
Image: Papara exists outside the banking system, providing a card experience similar to bank cards.
Image: Papara product features include sending and receiving currency, paying bills, and subscription fees. Source: https://www.papara.com/en
High degree of digitization in population information/residency/government affairs: Residents can handle all government affairs, pay fines, file taxes, apply for passports, and obtain student enrollment certificates from home.
Image: Turkey's open government platform turkiye.gov.tr/
Smooth deposit and withdrawal channels: Licensed exchanges binance TR and coinTR allow direct withdrawals to bank accounts, with a fee of only 3 TL.
Crypto adoption rate
As of October 2022, approximately 8 million people actively invest in cryptocurrencies. Including immediate family members, the number is about 14 million.
Source: https://www.kucoin.com/blog/more-than-half-of-Turkish-adults-invest-in-crypto
Turkish Crypto exchanges:
Licensed exchanges in Turkey that support card deposits and withdrawals:
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binance TR
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coinTR
Common local exchanges in Turkey: Local exchanges Paribu and Btctürk both have over 6 million registered local users.
Image: BtcTurk branding is ubiquitous at Istanbul Airport. Source: Author's photo.
Notably, CoinTR, a state-owned enterprise among exchanges, has partnered with two national banks in Turkey, Zirrat Bank and Vakif Bank, to establish fiat deposit and withdrawal channels. It operates more like a company formed by regulatory authorities, traditional banking institutions, and international tech teams, attempting to address Turkey's exchange rate and dollar reserve issues since its inception.
2. Argentina - 25% of Argentine adults frequently trade Crypto and use it as a daily payment currency#
Overview#
People in Latin America need to address issues such as inflation, remittances, value protection, and savings, benefiting from Crypto and becoming its most enthusiastic supporters. In Argentina, it has become mainstream, with about 5 million people (out of a total population of 45.8 million) using it.
Image: Crypto trading volume surged when the Argentine peso faced inflation. Source: chainalysis
Inflation: In October 2023, Argentina's inflation rate soared to 121%, and such inflation has persisted for years.
Foreign exchange controls: The Argentine central bank faces a shortage of foreign exchange and implements controls to prevent capital flight. The central bank mandates that exporters must repatriate profits from overseas sales within five days, and institutions and banks need authorization to purchase dollars in the foreign exchange market. Argentine citizens have a monthly dollar purchase limit of no more than 10,000 USD.
The desire for dollars and foreign exchange controls have fostered a black market, with the demand for dollars pushing black market rates up nearly 600 times in 2023. When people cannot obtain dollars, they seek alternatives, namely crypto. This financial environment has spurred Argentines' demand for investment, inflation resistance, and financial freedom—about 25% of adults in Argentina hold crypto.
Crypto adoption rate: According to Americas Market Intelligence data, Argentina's cryptocurrency adoption rate is growing rapidly. At the end of 2021, only 12% of Argentine smartphone users had purchased cryptocurrency, but by April 2022, this number had risen to 51%. Additionally, as many as 27% of Argentine consumers claim to be regularly purchasing cryptocurrencies.
Local exchanges in Argentina:
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Binance
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Bybit
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eToro
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OKX
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Gate.io
Image: Binance advertisement—Argentine merchants contribute to financial freedom in Latin America through Binance P2P.
Economic structure and geographical factors: Approximately 50% of Argentina's economy is gig-based, with a high demand for cross-border payments. Argentina shares time zones with North America, and its education level ranks among the highest in Latin America, providing ample time and space for Argentines to offer R&D services to North American companies.
Crypto in the daily lives of Argentines: According to AMI statistics, 71% of Argentines hold crypto for investment, 67% for inflation resistance, and 46% for financial freedom.
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Daily life: 25% of Argentines frequently use crypto for daily consumption and value storage. Ordinary housewives can skillfully use cryptocurrencies for daily shopping and paying clinic fees.
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AMI data shows that Argentina is an important market for crypto debit and credit cards. For example, Mastercard and Binance have decided to jointly launch prepaid crypto debit cards nationwide. According to Mastercard's statistics, at least 51% of Latin Americans use cryptocurrencies for shopping. Moreover, during the period from 2021 to 2022, the total inflow of cryptocurrencies in Latin America exceeded 562 billion USD, a 40% increase compared to 2020.
Image: In the past year and a half, the number of debit cards issued by local exchanges such as Lemon, Buenbit, and Belo has rapidly increased.
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Value storage investment: According to AMI survey data, over 50% of Argentines purchase crypto assets as a "hedge against inflation," similar to gold.
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Remittances: World Bank data shows that Argentina receives approximately 650 million USD in remittances annually. Chainalysis has found that an increasing number of Latin American immigrants use Bitcoin to remit money to their families back home. Argentines can now access the Bitcoin Lightning Network through applications like Strike, and more Argentine immigrants are beginning to enjoy the benefits of cross-border transactions using cryptocurrencies.
Case Study: Crypto payment app Belo—providing value storage and financial freedom tools for Argentine residents#
Belo is a local payment app in Argentina that combines the advantages of web2 and web3, integrating the banking system, fintech, and crypto payments. The receiving end can achieve unverified cross-border payments, enabling fast and secure fund transfers. The payment end allows payers to spend Crypto directly while recipients receive fiat currency, akin to a debit card experience. Opening a Belo account requires an Argentine ID or passport.
Image: Belo—providing value storage and financial freedom tools for Argentine residents. Source: belo.app
Payment features:
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Card payments: Payers spend in crypto, while recipients receive fiat currency. C-end users can spend any crypto (BTC, ETH, USDT) and then pay in fiat (Argentine pesos) in the form of a debit card, receiving a similar experience to Mastercard, with 2% cashback on each transaction.
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Numerous daily consumption payment functions that are highly localized, such as phone top-ups, utility payments, financial insurance payments, basic service payments, shopping services, dining services, and telecom services (supporting four telecom operators). Users can also create unlimited virtual cards, similar to Wise, with each virtual card having a daily spending limit for various subscription services.
Receiving/recharging:
1. Transfer to Payoneer balance
Transfer funds from Payoneer (a Latin American online payment company) to Belo with no delay. Funds will be automatically converted to USDC at the current exchange rate upon deposit for storage, exchange into other cryptocurrencies, or use with the Belo Mastercard. A 4% commission is charged for deposits, with a minimum amount of 5 USD and a maximum of 5 withdrawals per day, amounting to 5,000 USD.
2. Cross-border receipt of euros
Belo supports SEPA transfers to receive euro payments. In the future, it will also support receiving dollar payments through SWIFT and ACH transfers.
Incoming payments from abroad incur a 1.5% commission and may take 1 to 4 business days to arrive. Balances will be automatically converted to USDC at the current exchange rate, and users with an Argentine DNI can create accounts to use with the Belo Mastercard.
3. Directly recharge crypto via address
Image: Belo supports SEPA transfers to receive euro payments, transfers to Payoneer balance, and direct crypto recharges. Source: https://help.belo.app/es/articles/5705712-ingresar-fondos-desde-el-exterior-a-tu-cuenta-de-belo
Key success factors: The Belo product is created by Argentine founders, and the local team has several advantages:
- Deep and refined insights into users' daily needs. As PG said, where things seem smooth, there are still gaps when magnified a thousand times, and these gaps are areas for product optimization, such as automatically converting peso balances into stablecoins with selectable conversion cycles (daily, weekly, monthly).
- Bridging the web2 and web3 account systems: Transferring funds using USD to local banks, fintech (Payoneer), crypto, and several other account systems, achieving seamless connections between fiat and crypto requires strong local relationships and resource integration.
3. Africa - Significant regional disparities, fragmented markets, ambiguous crypto regulations, limited infrastructure always find solutions#
Overview#
Africa's situation is complex, with significant regional differences, 54 sovereign countries, and over 900 million people. Geographically, Africa is often divided into North Africa, East Africa, West Africa, Central Africa, and Southern Africa. Africans and Latin Americans are eager to share, hoping that the economic and financial conditions of their countries will be heard and seen by the world.
Mainstream payment and account systems in Africa:#
Mobile money is a significant driver of inclusive finance in sub-Saharan Africa. It promotes account penetration through mobile payments, savings, and lending.
Mobile money account penetration rate: Mobile money account owners do not only use their accounts for P2P payments as initially designed. In 2021, approximately three-quarters of mobile account owners in sub-Saharan Africa used their mobile money accounts to make or receive at least one non-personal payment.
Mobile money accounts have also become an important savings method in sub-Saharan Africa, with 15% of adults (and 39% of mobile money account holders) using mobile money accounts for savings, a rate comparable to those using formal accounts at banks or other institutions.
Mobile money as the infrastructure for financial institutions: 7% of adults in sub-Saharan Africa also use mobile money accounts for borrowing.
Image: The World Bank's 2021 Global Financial Index found that 55% of adults in sub-Saharan Africa have accounts, with 33% having mobile money accounts. Source: The Global Findex Database 2021.
Mobile money technology implementation: USSD#
USSD has very low infrastructure requirements, making mobile money a powerful payment method in Africa. USSD technology allows users to create mobile wallets using their phone numbers to electronically store funds and directly perform fund transfers, bill payments, top-ups, and merchant payments on their phones. It is accessible and usable globally without an internet connection, catering to all types of consumers.
Image: USSD technology allows users to create mobile wallets using their phone numbers to electronically store funds. Source: Author's photo.
Image: USSD user flow. Source: https://www.digitalvirgo.com/mobile-payment/ussd/#down
Nigeria - 25% of Nigerians hold Crypto, another solution for no-threshold financial services#
Nigeria's currency is weak, with a significant disparity between black market and official exchange rates. According to World Bank statistics from 2021, the proportion of unbanked individuals in the region is as high as 55%. All of this greatly stimulates local residents' demand for Crypto.
Image: In 2021, the proportion of unbanked individuals in Nigeria reached 55%. Source: The Global Findex Database 2021.
Image: Nigeria's cryptocurrency adoption rate increased by 9% year-on-year. Source: Chainalysis. The regulatory environment remains strict, with most areas prohibiting crypto payments. Binance C2C is the most commonly used deposit and withdrawal channel.
4. Vietnam - 16 million Crypto holders, strong economic growth momentum, and a young population#
Overview#
Vietnam's crypto usage and regulatory situation is very similar to that of China, with the vast majority holding crypto for speculative purposes, primarily using centralized exchanges for trading, and KOL-led trading being common. Additionally, Vietnam has a very high crypto adoption rate, increasing the attractiveness of the Vietnamese market for global projects.
Foreign exchange controls: Vietnam has strict foreign exchange controls.
Inflation: The inflation rate of the Vietnamese dong (VND) at 4-7% can generally be offset by bank deposits with interest rates of 6-7%.
Economic and geographical characteristics of Vietnam#
Vietnam's economy has grown significantly over the past decade, with an average annual GDP growth rate of 6%, making it one of the fastest-growing economies in Southeast Asia.
The booming economy, along with its strategic geopolitical positioning, has attracted leading tech companies like Apple, Samsung, and Intel to establish their manufacturing bases in Vietnam. In addition to manufacturing, Vietnam often exports software development services to developed countries and regions.
Demographically, Vietnam is one of the youngest countries in the world, with 30% of the population under 25 years old. Young people aged 10-24 make up 21% of the total population, or 20.4 million. This demographic window is expected to last until 2039.
Source: vietnamplus.vn
Vietnam has over 16 million crypto holders, with about 31% holding Bitcoin, accounting for approximately 17% of Vietnam's total population. The motivation for holding crypto is primarily speculative, leading to a significant number of local crypto trader KOLs.
Vietnam has about 200 active blockchain projects, mainly in DeFi, NFT, infrastructure, and GameFi sectors. Notable projects include Axie Infinity, Kyber Network, and Coin98.
Regulatory environment: In 2020, the State Bank of Vietnam announced that it does not accept cryptocurrencies as legal tender or payment methods. Crypto payments remain in a gray area.
Local payments#
MoMo (digital wallet) is the most popular e-wallet in Vietnam, with 20 million users, leading the mobile wallet sector, followed by Mocan and Zalo Pay.
In Vietnam, credit cards remain the primary online payment method, accounting for 31% of the market share.
5. Switzerland - Zug, an experimental ground for Crypto Valley#
Switzerland is known as Crypto Valley, primarily due to historical developments, with the Ethereum Foundation registered in Switzerland. Zug is also a pilot city for crypto payments. However, wealthy low-tax areas like Zug do not need crypto as a supplement to financial infrastructure; establishing crypto payment special zones is more experimental in nature.
Additionally, in the 2021 Economist Democracy Index, Switzerland ranked 9th, making it a suitable region for DAO practices.
Conclusion: The duality of Crypto—speculative object in developed regions vs. financial firestarter in emerging regions#
In areas with weak currencies, where mainstream currencies (dollars, euros) are hard to obtain (due to foreign exchange controls and insufficient liquidity), Crypto finds fertile ground, providing local residents with tools for value storage and financial freedom.
Among the four countries and regions mentioned above, Argentina has the best soil for crypto payments;
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Turkey has a developed banking system and a relatively high degree of financial freedom, but the crypto payment ban looms overhead, making it unsuitable for developing crypto payments; Vietnam has a good crypto ecosystem, but the motivation for holding crypto is primarily speculative;
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Africa lacks financial infrastructure, making it difficult to open bank accounts, and with weak currencies, there is a strong demand for stable currencies and cross-border remittances, but the lack of infrastructure and regulatory issues have caused many crypto wallet projects to fail;
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Wealthy low-tax areas like Zug in Switzerland do not need crypto as a supplement to financial infrastructure, and establishing crypto payment special zones is more experimental in nature.
Moreover, Crypto and fintech products like Papara and mobile money can help users gain financial accounts without barriers.
According to World Bank data from 2021, 1.4 billion unbanked adults believe that lack of money, distance to the nearest financial institution, and insufficient identification are the main reasons for not having accounts. This can be addressed through some technical solutions and financial regulatory policies, referencing the technological experiences of mobile money popularized in Africa; it can also be achieved by directly using unlicensed crypto accounts to increase the penetration rate of accounts among the population.
Image: Proportion of unbanked populations by country in 2021. Source: The Global Findex Database 2021.
As two friends from Africa and Argentina said,
“Living in China, the US, Japan, and Korea, you don’t really need Crypto. They hold crypto to speculate.
People in Africa and Argentina need Crypto to live.”
“People don't care about self-custodial, they don't give you a shxx
People care about how to transfer money across borders easily.”
Crypto presents two faces in different regions: it is a speculative object in developed areas and a financial firestarter in emerging regions. For residents living in regions like China, the US, Japan, and South Korea, Crypto is not a necessity and is more often used for speculation and narrative. However, residents of Africa and Argentina genuinely need Crypto to improve their daily lives, which is unrelated to narrative.
References#
State of the Industry Report on Mobile Money 2023 https://www.gsma.com/mobilefordevelopment/resources/state-of-the-industry-report-on-mobile-money-2023-2/
The Global Findex Database 2021 https://www.worldbank.org/en/publication/globalfindex/interactive-executive-summary-visualization
INFOGRAPHIC: 2022 CRYPTO LANDSCAPE IN ARGENTINA https://americasmi.com/insights/crypto-landscape-argentina/
The 2023 Global Crypto Adoption Index https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/
Man of Crypto: Vietnam - 16M Crypto users, Growing Economy, Young Population https://mirror.xyz/manofcrypto.eth/5w7JpuzW-M4FMl-Na9zUADq3LMApvg-G1r4Ddduka5k