Cryptocurrencies are taking the developing world by storm, with more users now in Nigeria than in the US – 2 experts lay out how bitcoin is changing emerging-market finance

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  • Insider spoke to James Butterfill from CoinShares and Marius Reitz from Luno in Africa about bitcoin in the developing world.
  • El Salvador recently made bitcoin legal tender and other governments may follow suit.
  • Cryptocurrencies can bring finance to the “unbanked” and help counter volatile domestic currencies, the two experts said.
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Cryptocurrencies have made it into the mainstream this year, with crypto-backed bank cards, investment products and traders, both big and small, have got in on the action, driving the likes of bitcoin, ether and dogecoin to record highs.

In the developing world, crypto adoption is growing at breakneck speed. Young, fast-growing populations that lack access to traditional finance, but have smartphones, from Brazil to Botswana, are driving the surge in the use of cryptocurrencies.

James Butterfill, who is an investment strategist at CoinShares, the largest crypto exchange traded product provider in Europe, and Marius Reitz, the general manager in Africa of crypto exchange Luno discussed the social benefits of bitcoin for the developing world.

“In third-world countries, we are seeing the take-up of bitcoin. If you look at bitcoin volume growth, it’s massive,” Butterfill told Insider.

For example, according to a Statista survey of global consumers in February, nearly one in three of those polled in Nigeria said they owned, or used, cryptocurrencies, versus just 6 out of every 100 in the United States, in 2020.

El Salvador’s recent decision to make bitcoin legal tender is an example of how developing countries are using crypto. The World Bank recently said it would not work with the country on its cryptocurrency plans because of how volatile it believes these assets are.

The amount of bitcoin that changes hands in emerging economies is exploding. Trading volumes in Brazil have risen 2,247% year-on-year in 2021, while in Venezuela, where political turmoil has created hyperinflation and economic crisis, crypto trading volumes have risen 833% in the last 12 months, according to data provider Kaiko.

In Nigeria, Africa’s largest economy, trading volumes have risen 128% year on year, and in Turkey, where inflation and economic decline have hit the lira, they’re up 143%, based on Kaiko’s data.

Bitcoin has been trading between $40,000 and $31,900 over the last month, but has moved between lows of $30,000 and to highs of as much as $63,500 over the course of 2021. Despite its volatility, consumers in developing countries love it.

There are about 1.7 billion people that are considered “unbanked”. However, around 48% of the global population has a smartphone and that percentage, in theory, have access to the internet, and therefore, cryptocurrencies, Butterfill said.

In Latin America, only 30% of the population over the age of 15 have a bank account, according to 2019 data by consultant Mckinsey.

“I think that really is a positive thing that bitcoin’s helping the unbanked be bankable,” Butterfill said.

A closer look at Africa

Crypto use has also grown in Ghana, Kenya, South Africa, Botswana and Zimbabwe.

“One region that may go unnoticed in the development and usage of cryptocurrencies, is Africa. The continent is one of, if not the most promising, regions for the adoption of cryptocurrencies due to its unique combination of economic and demographic trends,” Luno’s Reitz said.

One of the key factors that is encouraging people in Africa to use cryptocurrency is the cost of transferring money. The World Bank reported in 2020 that sending money to Africa via traditional bank transfer cost an average fee of 8.9% compared to the global average of 6.8%.

Sending money abroad, or even receiving funds from overseas, is littered with additional costs, including exchange rates and this is where crypto is helping fill that gap.

“It’s either really expensive, or really difficult to do. So, with something like bitcoin, you can have an international bank account and it costs you virtually nothing, that’s what’s really powerful about it,” CoinShares’ Butterfill said.

Read the original article on Business Insider

COVID-19 vaccines are now being administered in the UK and US, but the rollout may take years in poorer countries. Here are the major challenges they face.

Kenya Covid
A young girl waits to be tested for COVID-19 in the Kibera slum in Nairobi, Kenya.

  • In December, the world watched as the UK and the US administered their first doses of Pfizer and BioNTech’s COVID-19 vaccines.
  • But lower-income countries may have to wait for years before they can vaccinate the majority of their population, researchers have found.
  • Cost and availability, combined with transport, storage, and distribution issues pose serious problems – which could threaten global herd immunity.
  • Visit Business Insider’s homepage for more stories.

December has been a momentous month in the global fight against COVID-19. Amid a wave of emergency use authorizations, the UK and the US have already begun administering the first shots of Pfizer and BioNTech’s vaccine.

But in lower-income countries, the wait could be much longer.

Governments across the world are negotiating deals to buy COVID-19 vaccines – but this “frenzy of deals” could prevent poorer countries from accessing enough vaccines for most of their population until 2024.

This is according to researchers at Duke University’s Global Health Innovation Center. Scientists at the center’s Launch and Scale initiative have looked into the barriers that could affect access to a vaccine – and found a myriad of factors.

It isn’t just the cost and availability of vaccines that is pricing lower-income countries out. Many of the most vulnerable segments of society also lack the infrastructure to transport, store, and distribute the vaccine.

Manufacturing

Earlier this month, Pfizer became the first company to have a COVID-19 vaccine authorized for emergency use in the West, and the first hundreds of shots have already been given out in both the UK and the US.

However, it takes time to manufacture doses.

The leading vaccines use several different technologies, such as mRNA, recombinant protein, and adenoviruses. Each of these has its own complex manufacturing process, meaning the vaccines take a long time to make.

Pfizer aims to supply at least 1.3 billion doses of its vaccine in 2021, while Moderna says it can produce between 500 million and 1 billion doses.

But it could take three to four years to produce enough vaccines to immunize the global population, the researchers from Duke University found. Wealthier countries may be able to issue multiple doses of the vaccine to their populations before the immunization becomes widespread in poorer countries.

India covid
A health worker wearing protective gear collects a swab sample from a resident during a COBID-19 coronavirus screening at a civic clinic in Dharavi slums, in Mumbai.

Even if drugmakers heavily invest in their manufacturing facilities, “there is a limit to how much global vaccine manufacturing capacity can expand in the next few years,” said Andrea Taylor, the lead analyst for Launch and Scale.

“High-income countries are making deals with major vaccine developers who are in turn reserving the lion’s share of the world’s manufacturing capacity to meet those commitments,” she said. 

Experts are also worried about a shortage of glass vials to store the vaccines in.

Cost

The vaccine will also be expensive to buy. Pfizer charged the US $19.50 per dose for the first 100 million doses, its partner company BioNTech said. Each person requires two doses of the vaccine, putting its cost at $39 per person.

Moderna, meanwhile, plans to charge from $25 to $37 per dose.

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A worker cleans the Botafogo Favela in Rio de Janeiro, Brazil.

Some drugmakers, however, have promised to guarantee lower-income countries can also have access to the doses.

AstraZeneca is reserving 400 million doses of its vaccine for low- and middle-income countries, and said it would sell its vaccine at cost during the pandemic for between $3 and $5 per dose. But this no-profit guarantee could expire before July 2021.

Johnson & Johnson also said it would not profit from sales of its vaccine to poorer nations, and China said its vaccine would be “made a global public good.”

Covax

Since May, wealthy countries have been placing pre-orders for potential vaccines.

To prevent wealthier countries from snatching up vital doses of the vaccine, the World Health Organization (WHO), Gavi, and the Coalition for Epidemic Preparedness Innovations (CEPI) launched a scheme called Covax in April.

Countries sign up to access an equal share of successful vaccine candidates, meaning that the doses are shared among richer and poorer countries. The scheme aims to provide lower-income countries with enough doses to cover 20% of their population.

“For lower-income funded nations, who would otherwise be unable to afford these vaccines, as well as a number of higher-income self-financing countries that have no bilateral deals with manufacturers, Covax is quite literally a lifeline and the only viable way in which their citizens will get access to COVID-19 vaccines,” the companies behind the initiative said.

As of November 11, the Duke University researchers had found no evidence of any direct deals made by low-income countries, suggesting that they would be “entirely reliant on the 20% population coverage from Covax.”

Despite being a “phenomenal effort at international collaboration,” Covax is “seriously underfunded,” Ted Schrecker, professor of global health policy at Newcastle University Medical School, told Business Insider.

Some countries, notably the US, haven’t joined. The US could eventually control 1.8 billion doses, the Duke University researchers found, or about a quarter of the world’s near-term supply – and none of this would be shared with lower-income countries via Covax.

And even its founders are worried about the initiative.

“The whole call for global solidarity has mostly been lost,” Dr. Katherine O’Brien, the WHO’s vaccine director, said in internal recordings obtained by the AP. 

Gavi also said that the risk Covax will fail its mission is “very high” in a report issued in December, per the AP.

Covax has only managed to secure a total of 200 million doses – just a 10th of the 2 billion it aimed at buying over the next year, according to the publication. 

It has agreed to purchase another 500 million doses has also been agreed, but not in a way that is legally binding. It is $5 billion short of the money needed to buy them, the AP reported. 

Furthermore, many wealthy countries which have signed up to the scheme, including the UK, EU, and Canada, have also struck “side-deals” with pharmaceutical companies to guarantee their supply, the Duke University researchers found. Most of these deals were arranged in advance of the vaccines’ approval, whereas Covax has been hesitant to order stocks prior to approval.

“The hoarding of vaccines actively undermines global efforts to ensure that everyone, everywhere can be protected from COVID-19,” Stephen Cockburn, Amnesty International’s head of economic and social justice, said earlier this month, as a coalition of charities spoke out against the unequal global distribution of doses.

“Rich countries have clear human-rights obligations not only to refrain from actions that could harm access to vaccines elsewhere but also to cooperate and provide assistance to countries that need it.”

Transport

Distributing the vaccines globally is proving to be a mammoth task. 

Cargo airline execs have already warned that getting a COVID-19 vaccine to everyone on Earth could take up to two years, saying that it could be “one of the biggest challenges for the transportation industry.”

Some require ultra-cold chain storage which requires significant investment. Pfizer’s vaccine, for example, has to be transported at -94 degrees Fahrenheit through a system of deep-freeze airport warehouses and refrigerated vehicles using dry ice and reusable GPS temperature-monitoring devices.

Even when the vaccines do make it to low-income countries, they might lack the transport links and road networks to distribute the doses to everyone in need.

Ethiopia rural
Rural farming communities, like this one in the valleys of Debre Berhan, Ethiopia, may not have access to a local health center.

Specially-adapted vehicles may also be needed, Alison Copeland, professor of human geography at Newcastle University, told Business Insider. Lower-income countries may not be able to afford them, however. 

Storage

When doses do reach local communities, vaccines such as Pfizer’s still have to be kept in cold-chain storage. Even some of the most reputable US hospitals, such Minnesota’s Mayo Clinic, lack adequate facilities to store the vaccine, leading to a scramble for hyper-cold freezers – and in lower-income countries, this access to ultra-cold freezers is even less likely.

After the shots reach health centers, they can be thawed in a regular fridge – but they have to be injected within five days.

In many low-income countries, only metropolitan areas are well-resourced, Schrecker explained, and some villages and informal settlements may not have a working fridge.

Even if communities are able to afford storage for the vaccine, they may not have working electricity, Copeland explained.

Bogota slum
Slums such as Ciudad Bolivar in southern Bogota are unlikely to have access to the hyper-cold storage systems needed for the vaccine.

And the various vaccine candidates being developed by drugmakers have different storage needs, making it difficult for countries to know how to prepare and whether to invest in cold-chain facilities.

AstraZeneca’s vaccine, for example, can be stored, transported, and handled at normal fridge temperatures of between 36 and 46 degrees Fahrenheit for at least six months.

Once it reaches its destination, it can be “administered within existing healthcare settings,” AstraZeneca said, rather than requiring investment in expensive ultra-cold storage equipment.

Moderna’s vaccine can also be transported and stored at fridge temperatures, but only for a month.

Philippines covid
Drivers queue to be swab tested for COVID-19 in Manila in the Philippines.

Pfizer is also looking into alternatives to solve the storage problem. The US drugmaker is looking into developing a second-generation coronavirus vaccine in powder form, which would only need to be refrigerated, not deep-frozen. This could be developed in 2021, Pfizer’s CEO told Business Insider, but it’s currently uncertain.

Health centers and infrastructure

Given that urban areas have the most transport infrastructure, they also have the majority of healthcare infrastructure, too.

Although many African countries improved their health services during the Ebola pandemic, most rural communities remain isolated, Schrecker told Business Insider.

Alongside the vaccine doses themselves, other supplies are needed to carry out the vaccinations. For example, countries need to ensure they have syringes available in time for the arrival of vaccines, Taylor said.

DR Congo vaccine
A girl gets inoculated with an Ebola vaccine in Goma, the Democratic Republic of the Congo.

Low-income countries may also have to launch vaccination drives where health literacy is poor. While childhood vaccinations are becoming increasingly common in low-income income countries, people of all age groups, especially the elderly, will need the COVID-19 vaccine. This will require the counties to carry out major vaccination education campaigns, Taylor and Copeland both said.

Another challenge is that most vaccines require two shots, including Pfizer’s, which needs two shots injected three weeks apart. In rural parts of India, where people are harder to contact or may live a long way from vaccination centers, some people don’t come back for a second shot, public health experts told Bloomberg.

The country will also have to roll out mass paramedical training to teach healthcare staff how to administer the two-shot doses, Pankaj Patel, chairman of drugmaker Cadila Healthcare, told the publication.

Cause for optimism

Despite the hurdles that lower-income countries face, mass global vaccination is still a possibility.

After their mid-November summit, the G20 states said they will “spare no effort to ensure their affordable and equitable access [to COVID-19 diagnostics, therapeutics, and vaccines] for all people.”

Wealthier countries could also be motivated to provide aid to ensure all countries have access to a vaccine, because of herd immunity beliefs. 

“In order to control the virus, we need worldwide herd immunity, so between 60% and 72% of the population need immunizing,” Copeland told Business Insider. “This will hopefully be enough incentive for richer countries to help out.”

Read the original article on Business Insider