Source: Cointelegraph Original: "{title}"

Views from: Eli Ben-Sasson, Co-founder and CEO of StarkWare

Under the leadership of a president in Washington who supports cryptocurrency, a remarkable window of opportunity has opened, and it is time to think globally. For a community born from breaking physical space barriers, this may seem obvious, but since the future of cryptocurrency largely depends on decisions made in Washington, it could lead us to overlook the exploration of emerging markets.

Don't overlook emerging markets

This is precisely why we need to embrace emerging markets. Many in the cryptocurrency space still view entering markets like Africa as a noble charity rather than a wise strategy.

We need to recognize that cryptocurrency needs Africa and other emerging markets just as these markets need cryptocurrency. To truly become a tool for everyday use, cryptocurrency needs to penetrate those markets where it may hold the most value.

Of course, regulatory easing in the U.S. will encourage more people to use cryptocurrency alongside bank accounts and other financial structures. However, widespread adoption is still a long road ahead, as there is a wide variety of financial and technological products. The demand for cryptocurrency does not have that urgent drive to push for everyday use.

In the cryptocurrency space, talking about "unbanked" and "financial exclusion" has become a cliché. They are often mentioned merely for moral posturing. In fact, the emerging markets that are truly waiting for solutions will be places to experiment with these often-experimental systems and may also be where some of the most transformative decentralized applications (DApps) could emerge. After all, demand is the mother of innovation. Investment should focus on emerging markets because these markets offer several key opportunities.

Opportunities in emerging markets

This situation could be a win-win for both the people of Africa and blockchain developers. Users in Africa will gain systems that improve their lives—more convenient payment transfer methods and stable value storage for savings. Developers will be able to address issues within these often-experimental systems in this key market while gaining valuable experience and learning how to serve these users.

The economic growth forecasts for Africa are compelling. With a current population of about 1.4 billion, it is expected to reach 2.3 billion by 2050. The mobile penetration rate is only 63%, indicating significant growth potential, with an expected rate of 88% by the end of this century. About 75% of Africans are under the age of 30.

Use cases are everywhere. Cross-border transaction fees in Africa are about 10%, and the monthly interest rates for microloans can be as high as 27%, making financing costs out of reach for many. Approximately 600 million Africans live in areas with annual inflation rates between 20% and 30%.

Against this backdrop, the number of cryptocurrency users in Africa has grown 25 times since 2021. Replacing financial exclusion with high fees does not truly solve the problem. In recent months, the average fee for each Bitcoin transaction has been around $2 to $4.

If second-layer scaling solutions can reduce transaction fees to $0.01 or $0.02, this gap could mean the difference between being able to eat daily for some families. This gap helps make microtransactions and small business financial operations economically viable on a global scale, especially in Africa.

We have witnessed this story before

Emerging markets have driven technological advancements that subsequently changed the world. Take renewable energy as an example. Developing countries have many off-grid communities, often sunny, with unreliable infrastructure.

There, solar panels and wind farms are not just for cleaning up existing energy supplies but simply to provide energy, allowing homes and workplaces to have reliable electricity. These areas have become fertile testing grounds, where production is scaled, inefficiencies are overcome, and costs are driven down.

Today, households in Chicago, Washington, or London can install more robust and efficient solar panels at lower costs, thanks to large-scale rollouts in emerging markets. Africa not only benefits from green energy; it also drives the development of green energy.

Now, cryptocurrency is experiencing the same story. Just as emerging markets have driven the development of renewable energy through demand and scalability, Africa's financial needs could also drive the development of cryptocurrency. These markets are not just beneficiaries of innovation; they are also drivers of innovation.

Africa's unique challenges—high cross-border fees, inflation, and financial exclusion—have spurred innovation. Decentralized solutions are expected to address real issues in Africa, optimizing technology, reducing costs, and paving the way for global adoption.

Cryptocurrency needs a global effort in all aspects. It requires policy changes and hackathons, as well as investors and users. A change in mindset on Capitol Hill and driving innovation where this technology is most needed are two sides of the same coin. This complementary process will combine different forces from Washington and Wall Street with those from Windhoek, Namibia, and the Westlands business district of Nairobi to jointly promote the development of cryptocurrency.

Views from: Eli Ben-Sasson, Co-founder and CEO of StarkWare

Related: Privacy will unleash the commercial potential of blockchain

This article is for general informational purposes only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in this article are solely those of the author and do not necessarily represent the views of Cointelegraph.

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