Nowadays, most people know that crypto exists and involves money. Some might not know how it works, but that’s not always important for them either. What matters is that its use is spreading to all four corners of the world, and it’s not just about trading and investment anymore. Crypto has a much wider scope, and in some places, it’s even becoming a tool for financial empowerment, like the Philippines or Nigeria. People in refugee camps and other displaced communities are also using blockchain-based platforms to facilitate payments and transactions.

This article explores how and why crypto is being used in these regions, the benefits it’s bringing to local populations, but also exposes some growing concerns regarding privacy and data security.

When we think about crypto use and Web3, it’s easy to think about how those lucky (and visionary) ones who earned so much money by predicting market movements. However, Web3 is doing much more for the people than simply filling the pockets of the rich. A few months ago, we published an article about how blockchain is being used by NGOs in humanitarian actions. Now, we are exploring how it is being used to facilitate payments and replace more traditional transaction methods.

The Philippines: Slowly Replacing Western Union with Crypto

That’s exactly what’s happening in one of the world’s largest recipients of remittances. Scattered around the globe, Filipino emigrants send money to their relatives. This used to be done via Western Union — it is estimated that Filipino workers send home over $36 billion annually — but the money transactions company presents two huge downsides: expensive commissions, and it can take up to several days to process transfers. The solution? Transacting money directly in the form of crypto through platforms like Coins.ph and Binance P2P.

This has been extremely helpful, especially since the only thing some Filipinos have is access to the internet. They sometimes work and live far from the city center, where there are no remittance companies nearby. Crypto has become their golden ticket to sending money home.

Nigeria: Using Crypto to Fight Naira’s Devaluation

In 2021, Nigeria’s Central Bank (CBN), under President Buhari, issued an order mandating every national bank to avoid crypto-related transactions and block blockchain-based accounts. The Nigerian people have been facing high inflation and bank fees, as well as limited access to financial services for a long time, and the use of cryptocurrency was a way to address these issues. Nigerians were doing freelance work and sending money to their families from abroad via crypto wallets and apps.

Two years after Buhari’s restrictions, the country became one of the most active when it comes to crypto adoption. When the economy aggravated, the population took to platforms like Telegram, Discord, and WhatsApp to educate themselves. The use of new P2P apps, such as Yellow Card (a leading pan-African platform that serves 20 countries and allows buying and selling USDt easily using local currency) and Crane (a local Nigerian fintech platform for crypto conversions and stablecoin transfers), rose dramatically.

According to this CCN article, “a large part of Nigeria’s population remains outside the banking system. In 2023, 32% of adults, or around 33.9 million people, still had no access to formal financial services.” It is remarkable to witness how crypto has become increasingly popular amongst challenged economies and developing countries to tackle major issues such as difficulty in accessing traditional financial services. Owning an ID card or a bank account, and being able to have a credit card, is probably a given for most people in European countries, but that’s not the reality that Nigerians experience. Crypto and Web3 companies are the only way millions of Nigerians have to earn a living.

Afghanistan: HesabPay for Financial Inclusion

Hundreds of kilometres away, in Afghanistan, HesabPay is also changing the way people send and receive money. The mobile app was designed exactly to allow people with no access to financial services to be paid for their work, send money to their families, and buy essential goods. One of the best things about HesabPay is that it’s compatible with smartphones but also feature phones — yes, the ones we used in the early 2000s — thus enabling those who can’t afford a popular device to still transfer and receive money.

HesabPay was also key in solving the 2022 sanctions on the Taliban dictatorship, and this UK study explains how: “direct digital financial transfers can support the basic needs of vulnerable Afghans while reducing the challenges associated with physical cash or commodity distribution”. Ananya Kumar believes that a similar method could be used in Gaza to help the people in need.

Why is Crypto Successfully Spreading in Less Developed Countries?

Financial inclusion is the first factor that comes to mind. It’s a safe and easy way for the unbanked and underbanked to access payments, savings, and credit with just a few clicks.

Crypto also has reduced remittance fees, benefiting low-income users who rely on money from abroad. Cross-border accessibility is another benefit of switching from traditional banking systems to crypto. Money can flow where traditional finance can’t, which can be particularly useful in unstable or sanctioned economies like the ones we mentioned above.

And then there’s the empowerment through ownership factor. Users control their own funds and aren’t dependent on central banks or governments, which also raises the privacy issue.

In this article, we highlighted interesting cases where crypto is making a real difference in the world and helping people globally. As we enter a new phase in the Web3 (r)evolution, with AI taking center stage along with blockchain, new projects keep working to help people in need in areas such as loans, credit, and housing.

Empowa, a project founded in Mozambique and that’s now expanded to other African countries, provides families with affordable housing via decentralized financing. It uses NFTs to fund real estate developments.

Available in Bolivia, Venezuela, and Colombia, Tropykus Finance is a DeFi lending service that allows people to deal with inflation and get credit despite the countries’ financial situations. In Nigeria and a few Southeast Asia countries, Xend Finance fosters credit unions and cooperatives so people can pool funds and access higher yields while still being protected.

There are probably hundreds of other projects making a difference in places where war has taken over, where inflation has become too high, or where the national currency has almost lost its value.

Privacy Implications

There are, of course, privacy concerns when it comes to the use of these apps. Following compliance requirements isn’t always possible, as people like refugees or the unhoused might not have updated IDs, making it impossible to validate someone’s identity. Governments or authorized bodies might find less official ways — written-by-hand reports, to monitor the use of the apps and keep track of who’s using them, but this isn’t ideal.

Inability to remain private also poses surveillance risks as governments may monitor addresses linked to dissidents or marginalized groups. Even pseudonymous wallets can be linked to individuals with enough data points.

This is why these Web3 applications should be built with privacy in mind. By using TEEs, there are ways to keep sensitive data inside a trusted area.

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