Even though the digital asset market is facing a downturn in 2022, the fundamentals behind digital assets and blockchain technology haven’t changed.
Apart from the noise of crypto prices, blockchain technology and cryptocurrencies are already being used around the world. From reducing costs for friends and family to send money to each other, to giving access to financial services to those that don’t have any, and even as legal tender, crypto is being used every day around the world.
In this guide we’ll outline three of the best digital asset uses around the world. Let’s jump in.
Three Ways Crypto is Being Used Globally
Below we will describe three of the ways cryptocurrency is being used around the world. Some of these use cases have overlap with each other because they work as part of similar and connected ecosystems. Let’s start with money transfers.
Money Transfers & Remittances
One of the original purposes of cryptocurrency, peer-to-peer payments are one of the main components of Bitcoin (BTC) and other digital assets such as Stellar (XLM), Litecoin (LTC), and Ripple (XRP). Bitcoin hasn’t always been that affordable or fast as a payment system due to the number of transactions per second it could process and network fees, especially when it was worth nearly $70k USD a piece. However, the development of the Lightning Network has made it so that users can send transactions for a fraction of a cent. The same can be said for using Stellar and Ripple, the transfers are extremely affordable.
The reality is that almost any cryptocurrency can be used for money transfers and remittance payments either nationally or internationally. The main limitation of this use case is the need to convert the digital assets into fiat on the other end, which can be difficult depending on your jurisdiction. However, over time this will become much easier as digital assets become more mainstream. It’s already a fairly simple process if you live in a more developed country. Regardless, using crypto for money transfers and cross-border remittances is already faster and cheaper than traditional avenues such as Western Union or a bank transfer.
Decentralized Finance
Somewhat related to money transfers, decentralized finance (DeFi) is one of the most popular use cases for cryptocurrency. DeFi encompasses services such as decentralized exchanges, decentralized lending platforms, NFT marketplaces, and more. Any traditional finance service you use likely has a DeFi counterpart. That means trading, lending, money markets and more. The advantage to DeFi is that it’s an inclusive system, meaning the users of DeFi platforms are often the ones who also generate profit from them. For example, on decentralized exchanges, the users provide the liquidity for the pools used for swapping assets. This gives users globally access to sources of passive income, and is why many around the world do use crypto for DeFi.
DeFi gives users in countries with poor financial infrastructure access to better services as long as they have an internet connection. This allows those in less developed nations an easy way to access financial services without requiring them to wait for approval from a bank or traditional financial institution to do so. This means they can take out loans, earn passive income on their holdings, and more.
Legal Tender
Perhaps one of the least obvious ways in which crypto is being used, because it’s certainly not commonplace, but there are some digital assets that are legal tender. There are two nations that have turned Bitcoin into legal tender: El Salvador and the Central African Republic. These are two nations that have been poor financial performers for a long time and are hoping that Bitcoin can help turn their nation’s prospects around.
It seems possible that as more nations experience deteriorating fiat currency systems (hyperinflation, being tied to the USD) they’ll start to turn to something like Bitcoin to help curb those issues. Liechtenstein just recently announced that citizens can use Bitcoin to pay their taxes, joining a town in Switzerland called Zug that also allows this.
There is also a town in Switzerland, Lugano, where Bitcoin, along with Tether (USDT) are considered legal tender and can be used for taxes but also at any merchant that has set up digital asset payments. The “Plan B” as it’s referred to, has added many merchants over the past year. You can now get food, drinks, clothes, tattoos, and much more and pay with USDT or BTC.
Closing Thoughts: Still Early Days
It’s still extremely early days for the adoption of digital assets into the mainstream. Even still, it’s already starting to make its way into various aspects of everyday life for a variety of people around the world.
As blockchain technology continues to improve, it seems impossible that crypto isn’t going to become more and more used by everyone. Whether you even know you’re interacting with crypto and blockchain will eventually become hard to tell, and when that day comes, it will be interesting to see the global financial landscape.
