It is a truth universally recognized by experts in the Crypto community on Twitter that emerging markets are more likely to see revolutionary use of bitcoin, at least in the near future, than Silicon Valley.
However, the term "emerging markets" encompasses most of the planet, excluding a handful of wealthy nations. In general, regions with weak states and diasporas see more massive cryptocurrency adoption.
For example, Lebanese entrepreneur Michel Haber said that most of the 26 remote workers involved in his web services startup, cNepho Global, now prefer bitcoin salaries.
This is no longer a fringe perspective. Arab Weekly ran an article in April about how the collapse of the banking system is destabilizing Lebanon. Protests hit the central bank in April, and riots around bank branches were even deadly.
The situation continues to simmer. “The peer-to-peer bitcoin market is very robust because the Lebanese banking system has failed and people have more money than banks have,” Haber said.
This does not mean that Bitcoin will easily replace local currencies. As was the case in Iran, once home to a thriving bitcoin mining and retail use industry, authorities have curtailed usability once adoption of fiat money has grown. But rather than annihilating demand for cryptocurrency, crackdowns can change its manifestation.
Volatility of stablecoins
In regions with volatile currencies and little access to dollars, the demand for stablecoins is on the rise. According to a bitcoin trader in Iran, who asked not to be named just to be safe, the collapse in oil prices has not increased local demand for bitcoin.
This is partly due to government efforts to promote the local stock market. However, as the dollar exchange rate fluctuates and banknotes become scarce, Tether (USDT) stablecoins sell for more than a dollar per Iranian rial.
What makes stablecoins more desirable isn't any stability mechanism or guarantee, it's simply network effects. After all, the reason many of these users are turning to cryptocurrency is because they want a global asset, whether that takes the form of paper invoices or software.
The Middle East is also one of the few regions where non-gambling-focused decentralized applications (dapps) continue to attract repeat users. Dmail founder Mohamed Abdou, whose Egyptian team built a privacy-focused email service using Blockstack, said the dapp now has 15.000 monthly active users.
As such, Dmail raised $500.000 in April. While Dmail doesn't collect user information (and therefore doesn't know where users are), this Egyptian project was inspired by a local context where international remittances and payments offer a lifeline to an economy hit by currency reserves out of stock.
Also very popular are automatic trading apps such as Bitcoin system. These allow you to trade bitcoins even without any trading experience, so they are easy to use.