The 5 unexpected countries where crypto is most needed BQT.io Follow Jan 22 · 7 min read

By Edward W. Mandel

It’s easy to see how cryptocurrency might benefit the citizens of countries suffering from hyperinflation. When the central bank has completely failed and the fiat money becomes next to worthless, then the appeal of decentralized money becomes apparent.

But do countries really need a burning platform to discover crypto’s benefits? No. Here’s BQT’s list of countries where the adoption of digital coins has the greatest near-term prospects. We deliberately omitted Venezuela and any other nation that are on AML and terrorism sponsoring lists.

We also excluded such economic dynamos as the United States and China because it’s just not a fair comparison. Also, the fishing for a list like this is too easy in the former Soviet Union; these new republics are already well-known for their crypto trading, mining and development work.

Favorites like Brazil and South Africa are excluded just because we took a look, decided the hype was yet to be made real, and pushed on.

5. Argentina

Something has got to give in Argentina, and we think it’ll be the currency controls that now suppress crypto trading there.

On the one hand, crypto is held by 16% of Argentinians, putting them fourth on the leader board. On the other, President Mauricio Macri announced in September the reimposition of restrictions on foreign currency purchases. As a result, CryptoSlate reports, buying 1 BTC in Argentina will cost you $2,250 over the worldwide spot rate.

What makes us confident that crypto adopters will win this battle is that those currency controls are a direct response to the downward spiral of the local Argentine peso. You don’t stop depreciation by making it illegal. It didn’t work before crypto was an option, so it’s downright doomed to failure now.

Even so, let’s be careful not to declare victory so soon. As Ben Brown shrewdly observes in CCN, the surge has as much to do with Argentina’s local exchange’s illiquidity as it does with the central bank’s incompetence.

“Only 19 bitcoins were traded on Buenbit yesterday,” he wrote. “It doesn’t take much to distort the premiums on such a small market.”

4. Italy

Although we weren’t looking for a big economy to put on this list, turns out there was one member of the G7 that definitely belonged here. Italy’s economy might be almost as big as the United Kingdom’s but it has had more than its share of political and monetary struggles. This makes it an excellent candidate for crypto adoption.

First, it has the largest private debt in the European Union, meaning that it costs more to borrow money. In a non-EU country, that could lead to runaway inflation but, because it participates in the eurozone, it means that more tax money has to go to paying interest and less gets to be spent on public service delivery. The current government is hanging on by a thread — a statement that has held true since 1943 — and has to do something dramatic to address the debt issue so it can go about the business of statecraft.

A couple solutions have been floated. One is to stay within the EU, but leave the eurozone and reinstitute the Italian lira. Another is to issue small-denomination bonds to pay government contractors. These lower-value bonds of treasury — “mini-bots” occupy a space somewhere between debt instruments and money. The European Central Bank doesn’t like the idea but, frankly, I always thought the distinction between government debt and fiat currency was fairly amorphous.

Italians themselves aren’t sold on either of these ideas, and they’re still looking for some way out. So there’s been a spike of interest in cryptocurrency there. Cryptonewsz’s Ruti Vora reports that Italy’s parliament passed a bill offering official definitions of blockchain terms, and this is seen as a precursor to provide informed regulation for a legitimized crypto space there.

Bitcoin.com, the organ of the Bitcoin Cash project, summarizes how BCH — or really any cryptocurrency — could help in Italy.

3. Colombia

A recent survey suggests that 18% of Colombians already hodl, a tie with Brazil for second place. And Brazil is a much larger economy, so why are we fixating on Colombia? Because that’s where we’re confident that the number is growing more quickly and with fewer people noticing.

Cointelegraph reports a Paxful study that indicates 86.5% of the population there know what crypto is and 80% are open to investing in it. The study goes on to suggest that fully half of all Colombians ages 25 to 40 are already invested or are seriously studying it, and that almost one-third have actually pulled the trigger on a crypto transaction.

Paxful’s interest in this country stems from a desire to sell hardware.

“A partnership between two cryptocurrency firms could bring 20 new bitcoin ATMs to cities around Colombia,” Coindesk’s irreplaceable Daniel Kuhn writes. “The bitcoin exchange Paxful and crypto ATM company CoinLogiq announced the partnership Sept. 5. By integrating the Paxful kiosk feature with CoinLogiq hardware, users will be able to purchase BTC using cash, credit and online debit transfers.”

One more thing is driving adoption in Colombia, though: it’s border with Venezuela. Sure, Brazil has one too, but you need a machete to find it. The population centers of Colombia and Venezuela are practically next-door neighbors.

Panda Group has invested in a crypto exchange in a shopping mall on the west end of the Simon Bolivar International Bridge that enables Venezuelan refugees to exchange crypto for Colombian pesos. Specifically paired are stablecoin DAI, bellwether BTC and local favorite BCH, according to Coindesk.

2. Turkey

Turkey has a natural advantage, in that it’s bordered by war-torn Syria and crypto-friendly Russia and a Mediterranean Sea dotted with economically depressed nations (Greece), places where the economy isn’t so bad but the monetary policy has been historically self-defeating (Cyprus) and islands that are thriving in large part due to their wholehearted embrace of blockchain technology (Malta).

And yet it’s Turkey, where one out of five citizens is already holding crypto, which leads the world in this regard. Part of that has to do with the sorry state of the central bank, which is inspiring people to think that the Turkish lira might not be any more stable just because it’s state-issued. Singapore-based Huobi, one of the world’s largest crypto exchange with more than $8 billion in monthly volume, is moving aggressively to ramp up in Turkey to take advantage.

This enthusiasm among the populace has not escaped Ankara’s notice. If the government’s newly submitted economic development plan is to be believed — and I for one don’t believe it, but still — then sometime in the next four years Turkey will have its own central bank digital currency. Of course, the next nation that announces a CBDC then actually rolls one out will be the first one.

1. Austria

This is the ironic choice. The reason we find that so wryly humorous is that the crypto community is fueled in large part by the sentiments of the anarcho-capitalist movement — the people who think that all government is illegitimate, all taxes are confiscatory and, in the absence of central authority, individuals will tend to self-regulate via contracts instead of statute. It’s essentially libertarianism on steroids (or whatever random chemicals are being packaged as steroids in the absence of any consumer protections, by I digress). And, like all expressions of libertarianism, its secular church is the Austrian School of economics.

The big takeaways of Austrian economics are that a) markets are not efficient because people, though purposeful in their spending, are not generally rational, and b) planned, centralized economies are inherently bad because they rely on coercion. By calling baloney on both market capitalism and socialism, Austrian economics says that the best results come from empowering individuals to make their own economic choices, however ill-advised those choices may be. Then the challenge for economists is to better understand how those harebrained decisions are made by relying more on data and less on theory.

And it was Nobel laureate Friedrich von Hayek, one of the leading lights of the Austrian school through much of the 20th century, who saw the potential for something like cryptocurrency.

“There is no answer in the available literature to the question why a government monopoly of the provision of money is universally regarded as indispensable,” Hayek wrote — in 1976, 32 years before the Satoshi white paper. “Nor can we find an answer to the question of what would happen if that monopoly were abolished and the provision of money were thrown open to the competition of private concerns supplying different currencies.”

And yet today, Austrians — actual people who live in Austria, not the worldwide adherents to the economic school — take a dim view of crypto. According to an ING Bank study, only 13% of them have a positive view of the new asset class, as compared to Turkey’s 62%.

BQT plans to grow with the world economy rather than tether ourselves (pun intended) to the interests of one central bank over another. If given a choice between 1% of the Chinese market or 10% of the Turkish market, we’d take … the Chinese market, obviously. We’re not stupid. But there is an inflection point to be found somewhere. And we’d rather do business where we’re welcome and where there’s potentially more upside.

Edward is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and recently launched BQTX.COM exchange, BQTUniversity.io Blockchain Education Platform, BQTexchange.com beta-P2P exchange helping traders connect with each other to leverage their crypto assets.

The information can be found online at BQT.io, on Telegram @BQTCommunity.