The Great Depression of the United States led to the failure of 9,000 banks over the course of a decade, with 4,000 tanking in 1933 alone, and $140 billion in depositor funds disappearing.
People waited for hours and days in lines, attempting to retrieve their savings. College funds were lost, rainy day funds for mortgages went up in smoke. Food riots erupted and World War I veterans camped outside of the White House in Washington, D.C., waiting for bonus pay that would never come. Thousands of destitute people sold apples for five cents apiece in New York City, in an attempt to survive. Nearly an entire generation was desperate and hungry, unable to keep their family homes or food in their bellies.
While North America has not since seen that level of instability, it is rampant around the world. Residents of developing countries often have to navigate unstable governments, coups, corruption, and hefty fees for financial transfers and services.
“In the developing world, there are signs that crypto is quietly building deeper roots. Especially in countries which have a history of financial instability or where the barriers to accessing traditional financial products such as bank accounts are high, cryptocurrency use is fast becoming a fact of daily life,” according to Financial Times.
Now, as the Financial Times article notes, a software coder in Nigeria can bill her client in London and can sidestep a costly banking system and a “miserly” exchange rate by being paid in bitcoin. Meanwhile, in Vietnam, individuals and businesses trade, invest and transact in bitcoin and other crypto to such an extent that the country has the world’s highest rate of crypto adoption.
Advanced economies appear more hesitant and reticent about crypto adoption. And from a socio-psychological perspective, this makes sense. They can afford hesitation. Some of those countries with economic systems steeped in traditional practices are issuing warnings about crypto.
However, let’s not forget the Great Recession of 2007 to 2009. While not as dire as the Great Depression, it still made its mark. People who lost jobs and homes during that time have not forgotten. I would venture to say that those same people who were failed by traditional banking systems are likely early adopters of cryptocurrencies.
It is logical, afterall, to explore other options after getting kicked.
As Kim Grauer, director of research at Chainalysis, a crypto data company told Financial Times, while most people were focused on Elon Musk’s tweets about crypto or what various CEOs and institutional investors were saying about bitcoin, “There was this entire story unravelling in emerging markets around the world that’s really powerful.”
“There’s a massive crypto footprint in many of these countries . . . [and] a massive amount of entrepreneurial opportunity,” Grauer said.
There were millions of people who surfaced from the Great Depression untrusting of traditional banking systems. Instead of savings accounts, which had failed them before, they began stuffing money into things like their mattresses and into tin cans. Now, thanks to tremendous technological advancements – particularly with the blockchain –crypto presents other (and far more secure) means for protecting money.
There is opportunity for all people in all corners of the world.