Web3's Impact in Emerging Markets: Insights from VALR CMO Ben Caselin
In recent years, emerging markets across Asia, Latin America, and Africa have shown a remarkable interest in cryptocurrencies.
This trend was a focal point of VALR’s CMO, Ben Caselin's keynote at Foresight 2024 in Hong Kong, where he highlighted the simultaneous yet uneven transformations across these regions, and how different jurisdictions are becoming unique crypto hubs, each leading the charge in their own way.
Bitcoin's Rise in Emerging Markets
Bitcoin has reached new all-time highs in countries like Nigeria, Argentina, and Lebanon, where traditional financial systems struggle with instability and hyperinflation. Caselin highlighted how these markets experience a more significant impact from the expanding money supply, with Bitcoin's volatility often reflecting the fluctuating stability of local fiat currencies.
Diverse Adoption Experiences
The adoption of cryptocurrencies in emerging markets varies greatly. Research shows that in Asia, Africa, and Latin America, economic activities are largely driven by survival rather than expendable wealth. In Latin America, for instance, there's a notable preference for stablecoins and tokenised gold, which reflects the region's deep cultural appreciation of gold as a store of value.
VALR’s Role in Institutional Adoption
A strong example of regional adoption is VALR, an exchange that attracts significant institutional volume, particularly from corporations. Caselin pointed out that the adoption of Bitcoin and other cryptocurrencies varies by region, often influenced by the pace of cultural transformation.
Web3 and Financial Transformation
Web3 technologies are enabling a broader financial and monetary transformation across emerging markets. Caselin discussed how smart contracts, remittances, payments, and new financial infrastructures, such as ETFs and self-custody solutions, are driving change. He also touched on the possibility of moving away from the US dollar, with these markets providing a fertile ground for such monetary experiments.
Challenges for Global Banking Systems
As Web3 adoption grows, central banks worldwide face uncertainty about how to regulate cryptocurrencies, especially given their ties to the US banking system. This uncertainty is particularly evident in emerging markets, where the adoption of Bitcoin and other cryptocurrencies is beginning to challenge traditional banking systems.
Unique Hubs of Crypto Adoption
Caselin also highlighted unique crypto adoption hubs, such as Hong Kong and South Africa. In Hong Kong, financial innovation is being driven by collaboration between banks and digital wallets. The South African market, on the other hand, has seen significant advances in fintech, with structural arbitrage opportunities like the Kimchi premium in Korea becoming more prominent.
Hong Kong's Leadership in Transformation
Looking ahead, Caselin predicted that Hong Kong would continue to lead in both cultural and financial transformation. He even suggested that the Hong Kong Monetary Authority might one day hold Bitcoin in its treasury, a bold move that would signal the region's commitment to financial innovation.
Connect with Ben on:
X: @BenCaselin
Linkedin: Ben Caselin
