Why Is Eastern Europe Embracing the Blockchain?
Eastern Europe is one of the most rapidly developing regions in the world. Benefiting from its great location, countries located within this region are investing in practically all of their traditional industries. From manufacturing to transportation and logistics, Eastern Europe is gradually becoming a prosperous region. The trend is easily visible when looking at the average GDP growth rates across those countries. Ukraine, Georgia, Armenia, and Belarus are all growing rapidly.
For the vast majority of those countries, the main area of focus is developing a solid critical infrastructure net, able to support other linked industries, such as manufacturing, passenger and cargo transportation, farming, and others. Undoubtedly, this is a great strategy for any country since having this vital infrastructure system is of utmost importance. However, for rather poor countries to develop, there is an urgent need for radical solutions.
To accelerate economic growth, many of the central and eastern European countries have made radical changes. Notably, Poland that used to be an Eastern Bloc country revolutionized its taxation system and the economic structure, imposing liberal policies and allowing lots of foreign direct investment to flow in without any obstacles. The country particularly invested in high tech industries, fostering growth in the industry. Generally, many central European countries that were in the same shoes as their eastern neighbors currently are invested in back then-radical ideas. As of now, we can already see that the work and the investments have paid off. Countries like Poland and Hungary are on the track of becoming some of the most prosperous nations on the continent. Experts from the influential research and analytics publishing Kapitali.ge say, that the Eastern parts of Europe will follow the path of Poland and Hungary. The situation in the region is very similar to what central Europe went through not long ago.
Investing in tech is no longer enough without the digital financial services
The 21st century came with a lot of innovation in the financial industry. Just a couple of decades ago, no one would have imagined having the entire bank branch on a phone. Yet, today, transferring money or performing almost any financial operation is possible by simply clicking on the phone screen. The scale of this revolution is difficult to understand and acknowledge. The fintech revolution has impacted everyone and everything globally, but particularly the way our economies work.
Yet, the biggest and the most radical chance undoubtedly was the introduction of cryptocurrencies, most notably Bitcoin. The Blockchain technology that is extremely popular today has changed the entire world, but certainly not overnight. For years after its initial launch, Bitcoin failed to achieve market success. In 2017 the reality of the financial market changed as Bitcoin’s value exceeded the landmark milestone of $10,000. This event bolstered the significance of the crypto market as a whole.
Eastern Europe chooses crypto
Soon after the global success of cryptocurrencies, Eastern European countries decided to join the game by investing in the industry more than ever before. At some point, during the token sale peak, more ICO projects were launched in Moscow than across Silicon Valley. The Baltic states, particularly Estonia, are trying to create a welcoming environment for cryptos both in the legal and economic point of view.
Estonia, a country of just merely 1.3 million people is home to 900 officially licensed crypto companies. Ukraine, Belarus, Georgia, and Armenia are also trying to be more vocal in the industry by offering different benefits to the crypto giants from all around the world that are interested in making investments.
Notably, Georgia has become the biggest crypto-miner in the region. The company called “Bitfury” headquartered in Amsterdam and with offices in London, Hong-Kong and New York mines bitcoins in Georgia. The plant is simply massive and gets energy from the nearby windmill power plant.
Russia is also showing lots of interest in the development of Blockchain infrastructure. The country is being extremely serious with what they want to achieve, considering that they launched their very own state cryptocurrency. The latter was created by the state-owned bank and is completely controlled by the government. The intentions of the government remain rather blurry, but the fact that there is a state-owned cryptocurrency in Russia is quite impressive alone.
Global crypto companies are also interested in Eastern Europe
Besides local private or governmental initiatives, global companies that operate all around the world are also interested in the Eastern European market. The prime reason for many of them is the diversity and the potential of the region. Most importantly, not being the Eurozone coverage area, the region is home to a number of sovereign currencies. For instance, a Singapore-based Huobi now accepts Russian rubbles through regular bank transfers. This is unprecedented for the region.
Eastern Europe is a rapidly developing region but remains quite poor. The main objective of governments in the region remains to overcome poverty and grow economically. The presence of the crypto sector is not only direct benefits for the emerging economies, but it also has quite a few added benefits.
The strong crypto market and a well-integrated system in a country mean that countless companies that work through crypto operations will be ready to invest, solely because of the welcoming environment. Moreover, those countries become an attractive destination for thousands of crypto investors and freelancers. All of these is a major contribution to developing economies.