Crypto In Guyana: Is The Industry Set For Increased Adoption?

Dec 13, 2022 News

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Cryptocurrency regulation around the world is evolving because of the dynamic nature of the sector. Countries have to shape their rules and regulations to cater to ever-changing industry requirements to remain relevant. Since most of crypto and blockchain is decentralized, regulators must constantly adjust these laws or risk enforcing rules that stifle growth, innovation, and general adoption.

Regulations around the world generally vary. Unfortunately, there are no uniform international laws that adequately regulate cryptocurrencies. Access and use of digital assets depend on individual countries or regions, as well as their political and economic stance towards the sector. For instance, several countries, including Canada and the UK, allow residents to exchange and use crypto within certain legal limits. On the other hand, China imposed a blanket ban on all crypto activities, including mining. Interestingly, Chinese courts recently recognized Bitcoin despite the ban, adding to the digital asset’s legitimacy in the country.

To design crypto regulations, each country must consider several factors before initiating a bill or passing a law. After consideration, some countries decide on an implicit ban and not a blanket one. In most cases, an implicit ban does not entirely criminalize the use and adoption of cryptocurrencies. Instead, it prevents financial institutions, like banks and payment platforms, from providing any kind of support for cryptocurrency transactions, including mining, trading, and other forms of exchange.

Guyana’s stance towards crypto suggests that an implicit crypto ban is in place, which limits the kind of access crypto residents can legally enjoy. Unfortunately, crypto holders in countries like Guyana might be unable to access any legal respite if they become victims of fraud, misappropriation, or misrepresentation. This stifles general crypto adoption and limits access to people willing to risk their funds. However, this may not always be true of countries without supportive laws.

Nigeria is another country like Guyana with an implicit cryptocurrency ban. In 2021, the Central Bank of Nigeria (CBN) ordered banks and financial institutions to stop offering crypto services. The apex bank’s order included an instruction for these institutions to identify persons or entities transacting in crypto and immediately close their accounts. Interestingly, this order has not stifled the growth of digital assets in Nigeria, as the country’s crypto usage is the highest in Africa and one of the world’s largest.

Guyana’s crypto clime seems to be nothing like Nigeria’s, and is also dissimilar to that of most South American countries. For instance, as of March 2021, the Brazilian city of São Paulo had nearly 360 businesses that allow customers to make in-store crypto payments or operate cryptocurrency-automated teller machines (ATM). The 15 largest cities in Brazil had more than 650 businesses in this category in 2021.

There also is Argentina, with a crypto ownership rate of 5.6%, above the global rate of 4.2%. In Argentina, one of the biggest factors catalyzing crypto ownership and use is the country’s economic problems. Cryptocurrency has significantly benefited from Argentina’s sky-high inflation, weakened currency, and a scarcity of US dollars. These unfortunate circumstances have spiked crypto use in the country.

There are more than a few factors regulators consider before deciding on crypto laws. Due to the lack of clarity in Guyana, it is safe to assume that agencies have not explicitly greenlighted crypto use because of uncertainty across the board. One primary source of uncertainty is the unconfirmed impact of crypto on the country’s economy. Agencies like the Bank of Guyana (BoG) or the Financial Intelligence Unit (FIU) must consider the relationship between crypto and Guyana’s economy to decide whether or not support for digital assets can potentially weaken the Guyanese Dollar.

Technology and innovation are additional factors to consider. Countries with robust tech climates are more likely to create supportive infrastructure enough to catalyze growth in the industry. In supportive countries, tech growth extends to crypto adoption in several sectors, including finance, supply chain, and health care. In addition, developers in these countries are also integrating digital assets and blockchain technology into the gaming sector. There are now several online casinos where players can make crypto deposits to gamble with dogecoin (DOGE), ether (ETH), bitcoin (BTC), and several other digital assets. Using these crypto assets allows iGaming platforms to offer great bonuses to a wide array of customers not limited by geographical borders or traditional payment systems.

The future of cryptocurrency in Guyana is uncertain at the moment. The country’s crypto industry is not robust because regulators have yet to publicize a clear framework for the sector. In places like Argentina and Nigeria, a failing economy and weakened currency are catalysts for the sector’s growth. However, it is essential to note that crypto use and adoption can be high in robust economies like the United States. This could be the case for Guyana, with a rising GDP per capita directly tied to an increase in oil production, according to the World Bank. Even though Guyana only started producing oil in 2019, it hit 278,000 barrels per day in 2022. Guyana also has an estimated 11.2 billion oil-equivalent barrels, which includes 17 trillion cubic feet of associated natural gas reserves.

Guyana’s GDP per capita was one of the continent’s lowest for a long time. However, the country has witnessed impressive economic growth, increasing about 42.3% in the last three years. In 2022, Guyana’s GDP per capita hit 18,199, jumping more than 180% from the $6,477 recorded in 2019. In 2022 alone, GDP was estimated to have pumped by 63.4%. In addition, poverty in Guyana plunged to 48.4% in 2019 from 60.9% in 2006. By most indications, the country is set for increased economic growth, some of which could spill into the crypto sector. If people have enough disposable income to spend on crypto, and the country’s crypto industry is attractive to crypto-forward businesses, the rise in crypto adoption and usage could influence government decisions enough for more supportive regulations.

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