Bitcoin Emerges as Lifeline in Countries Facing Economic Instability
Cryptocurrencies, particularly Bitcoin, are proving to be a lifeline for individuals and businesses in countries grappling with economic instability and high inflation. A recent report by the Bank for International Settlements (BIS) highlights this trend, showing increased use of cryptocurrencies during economic stress.
In countries where traditional financial systems are failing or becoming too expensive, Bitcoin is emerging as a means to keep money safe and facilitate faster, cheaper, and more controlled cross-border payments. This is particularly true in nations with high inflation, expensive money transfers, or capital flow restrictions.
The BIS report reveals that while Bitcoin's share of cross-border payments has decreased from about 80% to below 25%, stablecoins are gaining popularity. Overall, cross-border crypto flows have grown significantly, from under $7 billion in Q1 2017 to over $800 billion in Q4 2021, and have since rebounded to around $600 billion by Q2 2024.
The report highlights countries in the Middle East and regions facing geopolitical and economic instability, as well as those experiencing high inflation and financial repression, as having a significant increase in Bitcoin and cryptocurrency use during recent economic hardships. This underscores that cryptocurrency use is driven by need, not popularity or location, and increases during global financial stress.
