As markets change, it’s both exciting and fascinating to watch digital banking trends emerge. From the unique application of cryptos, the wide range of remittance and online payment options, to loans and smart contracts, digital banking is evolving at light speed. Today’s blog, the fourth on emerging market banking, will focus on cryptocurrency.Cryptocurrency is another rising trend in emerging market banking. It’s an exciting new method of exchange, often tethered to the blockchain, that is poised to have a transformative impact on global commerce. Last year, this blog offered a primer on the Blockchain and its potential use in BPM. (Here’s the link.) Cryptocurrency and its blockchain connection to BPM make this an exciting tech stack for those in emerging markets; it has the potential to create the single most impressive redistribution of wealth across the globe should it take hold.
Pervasiveness of Cryptocurrency
The introduction of blockchain technology paved the way for cryptocurrency, resulting in the very public launch of a number of cryptocurrencies. According to AlliedCrowds “Cryptocurrency in Emerging Markets”, India has nine registered currencies, while emerging markets in Mexico, the Philippines, and Brazil each have three. Also, Russia is planning to launch Cryptobuble in 2019. The chart below depicts the pervasiveness of cryptocurrency as of late summer 2018.
Market Conditions
As the Cointelegraph has noted, the lack of infrastructure and abundance of mobile devices has given African customers more access to alternative forms of currency than traditional banks. These market dynamics have resulted in the launch of the African continent’s first cryptocurrency, Nuru Coin. According to Nurucoin.com, “Nuru Coin is positioned to help the SME market in Africa achieve an active part of this growing cross border trade by solving some of the cross border payment issues hampering our growth.” In Central and South America, market conditions are beginning to shift as well. This past summer, the Huobi readied for entry to the Brazilian market. According to Bitcoinist, Chile has begun a movement to close three cryptocurrency exchanges. Reuters reports that Mexico’s senate has recently passed Latin America’s first Fintech law.In Asia, McKinsey & Company reports that smartphone banking has overtaken digital banking. This trend has created an opportunity for purely digital institutions to gain a new hold on the market by reaching customers via marketing campaigns on social media and online advertising, reducing the cost of new customer acquisition. Further, McKinsey believes that banks who embrace digital marketing channels will be rewarded by meeting customers’ expectations and building loyalty.
