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AAX in association with Forrester Research recently published the findings of a survey conducted in Africa, Latin America, the Middle East and Southeast Asia on Bitcoin adoption. We asked Ben Caselin, the Head of Research and Strategy at AAX few questions regarding the survey outcome and key findings.
Q: Please throw some light on the recent study on Bitcoin Adoption conducted by AAX
A: Emerging markets such as Africa, Latin America and the Middle East have shown increased potential and interest to AAX as these regions are the primary locations where we’re seeing the adoption of Bitcoin and other digital assets. That’s different from other regions like Europe and North America, where adoption is primarily driven by speculation. The study shows that emerging markets are seeing consumers and businesses alike adopt crypto for specific reasons, such as payments and money management.
The primary reasons for commissioning this study were to shed more light on these questions of crypto adoption, and also to send a message to the wider industry that in order to move forward and progress, there needs to be a shift of focus beyond simply trading and profiteering. We need to focus on crypto’s impact and utility as a viable financial technology in the real world, and developing economies are the primary locations where this is happening.
Q: What are the different parameters considered during the study?
A: Forrester has stringent guidelines in place for all of its studies to ensure the observations it makes are well-grounded, and that the statements made are truly representative of the emerging markets that were studied.
We commissioned Forrester to help us understand the use of Bitcoin in emerging markets across the globe, in terms of its level of adoption, what people are using it for and how the technology itself is generally perceived and understood.
Q: Will it be possible to give us some information about the sample size and demographics of survey respondents?
A: To gain a comprehensive view of this topic, Forrester conducted an online survey of 806 consumers across Africa, Latin America, the Middle East and Southeast Asia who were aware of, or have used Bitcoin, for purposes beyond investment and speculation. In addition, Forrester conducted eight interviews with senior decision-makers at financial services and insurance organizations in these regions to dive deeper into the nuances of each specific market.
For a more detailed breakdown of the survey respondents’ demographics, please see this video and the appendix in the study.
Q: How is the general sentiment towards Bitcoin as an alternative mode of payment as against a trading instrument among the survey participants?
A: One of the main takeaways from the study is that socio-economic conditions in the emerging markets we looked at are different from those in developed countries in North America and in Europe. Generally speaking, consumers in developing regions have less money to spare and as a consequence, they can be more risk averse. As such, that does make people more amenable to new financial technologies and payment methods that can help save them money, for example with lower transaction fees.
The study found that those who are knowledgeable about Bitcoin are more willing to utilize it as a method of sending and receiving payments, both domestically and cross-border.
While inflation might seem quite extreme in the U.S., in other countries this is par for the course. In Argentina and Turkiye for example, consumers are used to extremely high inflation, which has been a factor in their local economies for decades. In such places, consumers have become accustomed to using Bitcoin and other cryptocurrencies, such as stablecoins, as a hedge against debasement and inflation.
Q: Do the findings indicate the role of regulatory authorities in the regions?
A: Although not every government has a favorable attitude towards Bitcoin, and others are unsure what stance to take, the study makes it clear that many believe that digital assets can lead to new economic opportunities. One thing to note is that adoption rates don’t always correlate to the state of regulation within nations. That said, a country like El Salvador, which has legalized and encouraged Bitcoin adoption, provides more favorable conditions for adoption than a place like Afghanistan, where compliance regulations prevent exchanges from serving the local population.
In countries that have tried to dissuade the adoption of Bitcoin, digital asset inflow is primarily driven by remittances as opposed to direct purchases. But in any case, adoption, acceptance and understanding of Bitcoin appear to be on the rise across all markets we surveyed, with or without local government support or encouragement for it.
Q: What is the position of AAX in the markets the survey was conducted?
A: AAX selected a few individual countries to be included in the study, such as Brazil and Turkiye, as these are currently target markets for expanding our business. We have already established a presence in both of these markets and we’re expecting to see significant growth in these jurisdictions over the coming year as we step up our efforts to expand there.
One way we do this is through AAX Trends, which is a subdivision of AAX that’s focused on impact and education. One of AAX Trends’ primary goals is to engage with local communities through meetups and educational campaigns, with the aim being to raise awareness about digital assets and position ourselves as a leading brand in these markets.
At the same time, targeting these markets also requires innovation on the product side. Next month, September 28-29 where AAX is the title sponsor at Token2049 in Singapore, we will be sharing more about our approach to these markets with a new iteration of the AAX app.
Q: Does AAX have any interesting plans in the near future for these geographies?
A: We see a big opportunity to grow AAX’s presence in countries including Brazil, Nigeria, The Philippines, Taiwan, Turkey and Vietnam and we have lots of exciting initiatives in store that we cannot reveal yet. What we can say is that these are key growth markets for AAX both at the product level and in our overall marketing strategy.
Aside from serving the communities in these regions, we also plan to launch a range of empowerment programs to encourage consumers to utilize digital assets as a solution to address various local issues. These are key long-term projects that we believe will play a prominent role in our efforts to accelerate adoption in these markets.
Q: It will be great if you can summarize the findings of the “Bitcoin in Emerging Markets Survey”
A: The biggest takeaway from the survey is that not only is there significant awareness of Bitcoin awareness in emerging markets across Africa, Latin America, the Middle East and Southeast Asia but also rapidly growing adoption as people there begin to experiment with it for payments, savings and money management.
For instance, the study found that 74% of survey respondents are aware of what Bitcoin is, while 52% say they have noticed an increase in people actually using Bitcoin in their country over the past year. Moreover, 91% of respondents believe Bitcoin will play a key role in enabling a digital future. We’re already seeing that play out with Bitcoin emerging as a platform for payments and money transfers in places where traditional banking services are unable to cater to significant segments of the population.
In addition, the findings of the survey suggest that even with its ongoing price volatility, Bitcoin adoption seems likely to expand in emerging markets because it helps to fill a digital transaction gap while enabling cross-border payments and new earnings opportunities. The data points to a possible leapfrog effect that will occur as more people begin using Bitcoin for day-to-day transactions.
Q: Anything else you would like to add?
A: Building on the survey, AAX is set to participate in September’s Token2049 event in Singapore as a title sponsor. In addition, it will host a launch event for AAX Trends. At both events, AAX intends to further drive the narrative of Bitcoin adoption in emerging markets and will be exploring various opportunities for partnerships in our target markets.
AAX is a top-tier digital assets exchange that caters to a global audience, with a vision of bringing the benefits of digital assets to everyone. Through an accessible range of products and by contributing to the conversation about digital assets and culture, we aim to empower the estimated 96% of people worldwide who do not yet own Bitcoin and other digital assets to build better and more inclusive economies.
Favored by more than three million users in over 160 countries, AAX is the first exchange to use the Satoshi Standard (SATS) to drive the adoption of Bitcoin. We are also the first to be powered by LSEG Technology, offering high-yield savings packages, 200+ spot pairs, deeply liquid futures markets, regular discounts on major tokens, and a range of on- and off-ramp products.