Paxful, the cryptocurrency P2P finance platform, realizes the key role Bitcoin plays in providing a steadying influence to developing markets, such as Africa or South America, that feature dire economic systems.
Many people are lucky to live in a country that has a stable economic system. Individuals living in Japan, the United States, or Germany don’t worry about rampant inflation, a national infrastructure that is at the point of collapse, or the availability of basic necessities, such as food and medicine. Yet millions of people in developing markets throughout the world do have these issues to contend with. However, cryptocurrency, in the form of Bitcoin, is proving vital in helping shore up the unsteady financial systems found in developing markets, and Paxful, the peer-to-peer cryptocurrency exchange, is helping to lead the way.
A Foundation of Quicksand
Many countries feature dire or shaky economic systems that greatly impact their citizens. Some of these countries include Venezuela in South America as well as Kenya, Nigeria, and Zimbabwe in Africa. People living in such countries have been failed by their centralized, national financial systems that are controlled by the government. It’s no wonder that those living in such regions have looked to P2P finance via Bitcoin in order to have some measure of stability.
To understand the vitality of Bitcoin in Africa and other developing markets, let’s take a quick look at the dire economic circumstances that people in such regions face on a daily basis. A good example to start with is Venezuela. The current and previous socialist governments have completely destroyed the once-thriving economy. In the first quarter of 2018, inflation hit a massive 454%. Basic items, such as food and medicine, have become increasingly scarce due to hyperinflation of 440,000%. In a 6 week period, the price of a cup of coffee at a cafe rose from 5,500 bolivars to 45,000 bolivars. People are literally starving, which is evident by the fact that the average Venezuelan lost 24 pounds in 2017.
Many countries in Africa are also plagued with unsteady financial systems. Zimbabwe is clawing its way out of an extremely dire mess that saw an eye-watering 231 million percent hyperinflation impact its fiat that helped push the unemployment rate to 95%. Eventually, the country dropped its own fiat and adopted the US dollar as its official currency. By contrast, Nigeria is in a far better place. Political and economic instability led to inflation and a pronounced lack of productivity. However, economic reforms have turned things around, and the GDP is growing. Yet there is still a lack of firm stability, as is evident by the current poverty rate of 33.1%, not to mention the 2017 inflation rate of 16.31%. Kenya is a relatively strong emerging market, serving as a regional hub for communications, transportation, and finance. Its inflation rate has dropped from 11.7% (April 2017) to 4.73% (November 2017).
Bitcoin Providing Relief
The growing popularity of Bitcoin in Africa and other emerging markets is providing a welcome element of stability, security, and opportunity. In Venezuela, Bitcoin can literally be the difference between life and death. Many desperate people are surviving due to mining the cryptocurrency in order to buy food. Paxful fully understands that people are looking to Bitcoin as a viable alternative to a national fiat that is often suffering from massive inflation. Another important factor in Bitcoin’s economic role is that many of those in developing markets are unbanked and have little to no access to centralized financial institutions. Instead, people are turning to each other for economic support via P2P finance, which is why Paxful works tremendously hard to provide a safe and stable platform for users to buy and sell Bitcoin in such areas.
The use of Bitcoin in Nigeria and other developing markets also leads to greater economic opportunity. A farmer in Venezuela can sell his goods for Bitcoin instead of worthless bolivars. Using Bitcoin allows people to be an active participant in a global economy, unhindered by bureaucratic red tape or needing a bank’s approval. Items that are needed for a business or for daily life can be purchased from anywhere in the world through the use of cryptocurrency. Another major boost that Bitcoin offers developing markets is an easy means of capital infusion. Individuals working abroad in other countries can send money back home instantly and for a low cost by using a peer-to-peer cryptocurrency exchange like Paxful.
Cryptocurrency provides a steady pillar of support to people living in developing markets. Far too often, government and centralized institutions fail them, but people are seizing the reins of economic freedom for themselves via P2P finance through virtual currencies. Paxful helps facilitate such opportunities by focusing on emerging markets. They understand the transformative power that cryptocurrency has. Paxful also ensures financial safety for their users through their escrow system. A buyer is fully protected from scammers as all bitcoins being purchased are held in an escrow account until the transaction is completed. Once done, the coins are deposited into the user’s Bitcoin wallet for future use. In the end, Bitcoin is proving itself to be a reliable, and even life-changing, asset for developing markets.
How important is Bitcoin for providing stability to developing markets? Let us know in the comments below.
Images courtesy of Pixabay and YouTube/@Paxful.