In the developing world, sending and receiving money is costly and sometimes time-consuming. According to The World Bank, the global average cost of sending $200 in the first quarter of 2018 was 7.1 percent, more than twice as high as the average cost of the 3 percent target set by the Sustainable Development Goals. Among the regions of the world, Sub-Saharan Africa is still the most expensive region to send money to, where the average remittance cost is 9.4 percent.
Additionally, many people in the developing world are completely cut out of the financial system. According to the latest Global Findex Report, From 2014 to 2017, the number of people who have an account with a financial institution or through a mobile money service in developing countries rose from 54 percent to 63 percent. This still leaves a big gap between disconnected people. The story is different in the developed world, where financial inclusion is high and where the existence of numerous fintech firms have enabled low-cost money transfers.
What this signifies is that as cryptocurrencies sweep across sectors of the global economy, their impact on developed economies will differ from developing ones. Thus, we can't push the same use cases that are gaining grounds in the developed economies onto the developing world. What the developing world needs is a native approach to cryptocurrency adoption. But how would that play out?
The low level of knowledge on the nature of cryptocurrencies has already cost some countries. While Argentina is seeing an influx of Bitcoin ATMs but without much adoption, Venezuela is also impacted by an unprepared national cryptocurrency implementation program. These issues stem from the lack of deep knowledge about cryptocurrencies, which would need to change if these countries want to reap the benefits of virtual currencies.
Developing economies need cryptocurrency use-cases that take into consideration the financial system in these regions. This means crypto and blockchain startups need to find a way of building solutions that tackled the highly inefficient, less developed, and corrupt financial system in the developing world. In order to achieve these goals, cryptocurrencies need to grow beyond trading tools into currencies that can save the ordinary citizen.
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