The rise of cryptocurrency is still causing varied reactions among users in different countries and regions worldwide.
In developing countries, cryptocurrency is still not as widely accepted and adopted as in the developed countries of Europe and America.
There are various challenges users in these developing countries undergo when adopting cryptocurrency.
Whether you’re a resident of a developing country or an investor looking to tap into this unexplored market, learning the challenges around adoption is important.
Below, we share the three main challenges of crypto adoption in developing countries and probable solutions.
Lack of Awareness
Cryptocurrency and blockchain technology entail technical complexities that are hard to decipher for individuals with limited financial knowledge.
While these complexities affect users from all regions, those from developing countries are mostly disadvantaged due to many other associated factors.
Poor internet connections and underdeveloped communication infrastructure are key contributors to slow awareness in developing countries.
As such, many users in these countries cannot break down the complexities of private keys, wallets, and security measures around cryptocurrency transactions.
The lack of awareness has led to investment mistakes and significant loss of funds, making others who are yet to invest develop cold feet.
The good news is that, in recent times, crypto exchanges and platforms have made it easier for new entrants to learn and explore their crypto fantasies.
For instance, if you want to buy BTC on Kraken, the platform shares quick steps for buying BTC safely.
Many developing countries are also embracing the new digital currencies and are doing their best to build supporting infrastructure that aids in the learning and understanding of cryptocurrency.
Unstable Regulatory Frameworks
Regulations around cryptocurrency are undoubtedly the most unstable crypto factor after the crypto prices. Even the most developed countries still find it hard to develop stable cryptocurrency regulations.
In fact, top countries like China have completely banned cryptocurrency from operating in the country, arguing cryptocurrencies facilitate public financing without approval.
However, many countries are researching and developing workable regulations, so we could soon have standard regulations for crypto operations.
As for developing countries, the journey is still long. The embryonic regulatory landscape in many developing countries poses financial instability, fraud, and manipulation risks.
Most of these countries’ governments are battling to balance embracing cryptocurrency benefits and dealing with money laundering, tax evasion, and fraud concerns.
Some countries apply the existing financial regulations governing traditional currencies to curb some security concerns around cryptocurrencies.
However, since cryptocurrencies are digital assets, it’s still challenging to curb all aspects of the potential risks involved.
Cybersecurity Challenges
Cybersecurity risks are also a major hindrance to the seamless adoption of cryptocurrencies in developing countries.
Most of these countries lack the infrastructure and the technological advancements to handle the vulnerability of cryptocurrencies.
Cryptocurrencies are vulnerable to fraud, hacking, money laundering, and other forms of cybercrime, which can be challenging for some governments.
When interested investors encounter these challenges, they’ll easily back down from investing in crypto in these countries.
Responsible and interested governments should make the right cybersecurity training available to citizens to help improve adoption rates.
Developing a holistic approach that combines education, technological innovation, and regulatory clarity is the best way for developing countries to overcome these challenges.
With this approach in play, interested users will easily harness the full potential of cryptocurrencies in building sustainable financial ecosystems in developing countries.
