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Chapters

The Need

Chapter 1: The Need. Why People Live on Crypto: chapter opening figure

1.1 Adoption by necessity

The dominant story told about cryptocurrency adoption is a story about choice: early adopters, speculators, technologists, believers. This report documents the other story, which is larger and almost never quantified: adoption by necessity. Across a wide band of the world, people hold and spend crypto not because they chose it over a working alternative but because the alternative does not work: the currency melts, the bank never opened an account for them, the remittance fee eats a day's wages, the capital account is walled, or the entire country has been cut out of the payment system.

This chapter measures that need. It walks through the five forces that make a population structurally dependent on alternatives to its own financial system, the same five components that the index's Crypto Necessity Index (CNI) aggregates (Chapter 2; construction in Appendix A.7). It then asks whether need can actually go digital, because necessity without a smartphone and a connection routes into cash, not crypto. It closes with the index's strongest single piece of evidence that this is not a hypothesis: in the countries where need concentrates, crypto already carries a measurable share of the remittance lifeline.

Three findings frame the chapter:

  • Need is concentrated, not diffuse. The median country in the index has a CNI of 0.16:1 for most of the world, crypto is optional. The top of the need distribution (Cuba 0.81, Lebanon 0.71, Venezuela 0.60) describes another financial universe, where every one of the five forces is active at once.
  • The five forces travel together. Eight of the ten sanctioned economies in the index also sit in the worst quartile for inflation or capital controls or both. Need compounds: the same person faces a melting currency, a closed bank, and a blocked transfer simultaneously. That compounding is what makes a single-asset workaround rational.
  • Where need is highest, crypto is already infrastructure. Every country scoring 3 or 4 on crypto remittance share sits above the index's median need; every wealthy economy in the index scores 0. The inverted geography is the thesis in one number.

1.2 Money that melts: inflation

The first force is the slowest and most universal: the local unit of account fails to store value. The index uses a three-year average (2023 to 2025, CFR Global Inflation Tracker on World Bank and IMF data)2 precisely to capture the regime rather than a single bad year; a currency crisis that resolves is an episode, but a decade of double digits is an environment that rewires household behaviour.

RankCountryInflation, 3-year avg (%)
1Venezuela250.0
2Argentina131.8
3Zimbabwe105.4
4Lebanon96.9
5Cuba80.0
6Turkey49.5
7Iran39.7
8Nigeria32.7
9Ghana30.5
10Myanmar25.8

The distribution is the point. The median country in the index averaged 3.8% inflation over the period; the tenth-worst averaged 25.8%, and the worst 250%. Above roughly 30%, holding the local currency between payday and rent day is a measurable loss, and the rational household response, documented across Argentina, Turkey, and Nigeria, is to hold value in something else and convert to fiat at the moment of payment. For two decades that something else was the physical dollar; the finding that recurs throughout this report is that the dollar's role is migrating to the dollar stablecoin, which needs no mattress, crosses borders, and is divisible to the cent (Chapter 4).

1.3 Banking that excludes: the unbanked

The second force is exclusion from the formal system. An adult without an account cannot receive a wire, hold a card, or build a payment history; whatever financial life they have runs on cash, mobile wallets, or informal networks. The index measures the unbanked share of adults from the World Bank's Global Findex 2025,3 with documented alternates where the survey does not reach (Appendix A.7).

RankCountryUnbanked adults (%)
1Lebanon77
1Myanmar77 est.
3Pakistan73
4Iraq70
5Algeria65
5Cuba~65 est.
7Cambodia61
8Bangladesh57
8Egypt57
8El Salvador57

Two entries deserve a sentence each. Lebanon's 77% is not a development gap but a collapse: a banked population was effectively expelled from its own deposits after 2019, and the survey now records the wreckage. Myanmar's 77% is the post-coup banking system in a single figure (CGAP 2024;4 Roland Berger 20245), with the caveat that the country's enormous mobile-wallet usage is not counted as banked.

The force also operates inside rich economies. The UAE registers 29% unbanked (Findex 2025): the figure measures all residents of a country whose workforce is roughly 90% expatriate, including low-income migrant workers excluded by bank minimum-salary requirements. The world's remittance-sending hubs contain, within their own borders, exactly the population this chapter describes.

1.4 Lifelines by wire: remittance dependence

The third force is dependence on money earned elsewhere. Where remittances are a material share of GDP, the cost and reliability of the transfer rail is a national economic variable, and the World Bank has documented for years that traditional corridors into poorer countries are the most expensive money in the world to move.6

RankCountryRemittances, % of GDP
1Lebanon33.4
2Nepal26.2
3El Salvador24.0
4Uzbekistan14.4
5Cuba12.0 est.
6Georgia11.9
7Senegal10.6
8Pakistan9.4
9Philippines8.7
10Nigeria8.4
A third of Lebanon's GDP arrives as remittances. A quarter of Nepal's and El Salvador's does. For these economies the transfer rail is not financial plumbing; it is the income statement. Every percentage point of fee on that flow is a tax paid to the corridor, which is why the question of whether crypto can carry it (section 1.8) is an economic question, not a technological one.

1.5 Walls around money: capital controls

The fourth force is legal: residents are restricted in moving value across the border or out of the local currency. The index measures capital-account openness with the Chinn-Ito index (KAOPEN 2023, the latest release of the academic standard),7 applied uniformly to all 79 countries; the handful of documented 2024 and 2025 policy changes, Argentina's removal of individual FX restrictions8 above all, are footnoted and stress-tested in a published sensitivity analysis rather than hand-edited into the data (Appendix A.8).9101112131415

At the cutoff reading, five economies sit at the maximum restriction score (Ukraine,16 Venezuela, Iran, Sri Lanka,17 Ghana), with Cuba and Iraq just behind on gap-fill values, and a long belt of large economies (China, India, Pakistan,18 Russia,19 Argentina,8 Brazil among them) at 0.84 on the 0-to-1 scale. Capital controls are the force most directly aimed at the behaviour this report measures: they are, definitionally, the state declaring which money may leave. A permissionless asset is the first technology in the history of capital controls that makes enforcement a question of detection rather than authorisation, and the P2P volumes documented in Chapter 4 show detection losing.

1.6 Cut off: sanctions and financial exclusion

The fifth force is the bluntest. Ten of the 79 countries operate under some degree of exclusion from the international payment system (hand-graded at the cutoff from the sanctions listings of OFAC, the US Treasury's sanctions office, and from access to SWIFT, the interbank messaging network international payments ride on):20 Russia, Iran, Cuba, and Belarus at the maximum; Venezuela next; Myanmar and Zimbabwe partial; Iraq, Lebanon, and Ukraine touched at the margins. For residents of these countries, and for the diasporas trying to send money home to them, the formal system is not expensive or slow; it is unavailable. Whatever one's view of the policy, its financial consequence is uniform: it converts an entire population into users of whatever rail still functions, and the remittance evidence below shows which rail that increasingly is.

1.7 The preconditions: can need go digital?

Necessity alone does not produce crypto adoption; it produces workarounds, and which workaround wins depends on infrastructure. Crypto's minimum hardware is a smartphone and a connection. The index therefore scores both, and the readings sort the high-need world into two camps.

Internet penetration (DataReportal Digital 2026)21 clears 85% across the developed world and most of the high-need middle: Lebanon reads 91.6%, Iran 79.6%, and Argentina and Turkey both clear the index's top 85% band. The floor of the index is a different world: Ethiopia at 21.7%, Uganda at 22.0%, Tanzania at 29.1%. Smartphone ownership, measured on unique owners rather than the multi-SIM connection counts that routinely exceed 100% of population, lands a band lower almost everywhere, and the gap matters analytically: a country can run a vigorous mobile-money economy on feature phones, and the index refuses to count that as crypto-ready.

Method box: the most dangerous statistic in the chapter. Kenya is widely reported at "92.9% smartphone penetration." The figure is real and means something else: 92.9% of active phone connections are smartphones, a device-mix statistic. Unique smartphone owners are roughly 45 to 48% of Kenyans, consistent with a 48% internet ceiling, and M-Pesa, the country's celebrated mobile-money system, runs predominantly on USSD sessions, the text-menu protocol of feature phones. Mobile-money adoption is not smartphone adoption, and smartphone adoption is the binding constraint for crypto. Misread this one figure and Kenya's readiness inflates by three scoring bands (Appendix B, Kenya profile).

The two camps, then. In most of the Lifelines tier (Chapter 2), need and readiness coincide: Argentina, Turkey, Lebanon, the Philippines, and Vietnam pair severe need with smartphone-saturated populations, and crypto adoption follows. In the readiness-gated camp (Ethiopia, Uganda, Tanzania, much of the Sahel belt), need is comparable but the rail to digitise it does not yet reach most adults; their workarounds remain cash, hawala (the informal broker networks that move value on trust rather than bank rails), and feature-phone mobile money. These countries are the index's adoption frontier: every point of smartphone penetration they gain converts latent need into addressable demand.

1.8 The proof: crypto already carries lifelines

Everything above is need; this section is evidence of response. The index estimates, for each country, the share of inbound remittances that arrives as crypto rather than fiat (retail flows under $10,000; World Bank denominator; Chainalysis 2025,22 TRM,23 and regional exchange data in the numerator; bands in Appendix A.3).

The result is the most cleanly inverted geography in the entire index:

Crypto share of remittancesCountries
Above 15% (band 4)Argentina, Iran, Russia
7 to 15% (band 3)Venezuela, Cuba, Ukraine, Mexico, Nigeria, Philippines, Pakistan
Below 1% (band 0)Every wealthy economy in the index, among others

Read the band-4 row against the five forces: Argentina (inflation, controls), Iran (sanctions, inflation), Russia (sanctions, controls). Read band 3 the same way: a sanctions case, a collapse case, a war case, and four of the world's great remittance economies. Now read the bottom row: every rich, banked, cheap-rail economy in the index scores zero, and the explanation is not technological backwardness in Zurich. Where the formal rail is cheap and works, crypto carries nothing, because nothing needs carrying; where the rail is broken, taxed, or severed, crypto is already moving more than 15% of the national lifeline.

This is the single number that converts the chapter's argument from sociology into measurement. Crypto remittance share is not a forecast of adoption by necessity; it is its receipt.

1.9 The need map

Averaging the five normalised forces yields each country's CNI, the need coefficient that Chapter 2 multiplies against capability:

RankCountryCNI
1Cuba0.81
2Lebanon0.71
3Venezuela0.60
4Zimbabwe0.58
5Iran0.58
6Myanmar0.55
7Nepal0.47
8Pakistan0.45
9Russia0.44
10Nigeria0.41

Two readings of this table set up everything that follows. First, the compounding is visible: every country in the top ten registers on at least three of the five forces, and Cuba and Lebanon on all five or nearly so. Second, and decisively for how the report ranks countries, need is not livability. Four of these ten (Cuba, Zimbabwe, Myanmar, and to a large degree Iran and Lebanon) pair extreme need with environments so broken that the need cannot express itself through working rails. What separates the countries where living on crypto is a daily reality from those where it is merely a daily necessity is the other half of the equation, capability, and that is the subject of the next chapter.

Chapter 2 builds the index: how capability is measured, and what happens when the two halves multiply.

Notes

  1. Genghis Research, *The CLI dataset (79×22 scores, CNI inputs, both rankings, sensitivity scenario)* (2025), https://genghis.pro/crypto-livability-index.
  2. Council on Foreign Relations (Steil & Harding), *Global Inflation Tracker* (2023), https://www.cfr.org/trackers/global-inflation-tracker. Archived at http://web.archive.org/web/20260301220514/https://www.cfr.org/trackers/global-inflation-tracker.
  3. World Bank, *The Global Findex Database 2025* (2025), https://www.worldbank.org/en/publication/globalfindex. Archived at http://web.archive.org/web/20260610091320/https://www.worldbank.org/en/publication/globalfindex.
  4. CGAP, *Myanmar financial-inclusion sector study* (2024), https://www.cgap.org/. Archived at http://web.archive.org/web/20260609230712/https://www.cgap.org/.
  5. Roland Berger, *Myanmar banking/financial-services analysis* (2024), https://www.rolandberger.com/.
  6. World Bank / KNOMAD, *Migration and Development Brief 40 (remittances, % of GDP)* (2024), https://www.worldbank.org/en/topic/migration/brief/remittances-knomad. Archived at http://web.archive.org/web/20260614071434/https://www.worldbank.org/en/topic/migration/brief/remittances-knomad.
  7. Chinn, M. D. & Ito, H. (Portland State University), *The Chinn-Ito Index (KAOPEN), 2023 release* (2023), https://web.pdx.edu/~ito/Chinn-Ito_website.htm. Archived at http://web.archive.org/web/20260303123244/https://web.pdx.edu/~ito/Chinn-Ito_website.htm.
  8. US Dept of Commerce (trade.gov); BCRA / MercoPress, *2024 to 2025 capital-account event to Argentina (easing to removal of individual FX restrictions (cepo), Apr 2025)* (2024), https://www.trade.gov/market-intelligence/argentina-eliminates-capital-controls-and-payment-timelines. Archived at http://web.archive.org/web/20260616163040/https://www.trade.gov/market-intelligence/argentina-eliminates-capital-controls-and-payment-timelines.
  9. Council on Foreign Relations; AP, *2024 to 2025 capital-account event to Egypt (easing to FX liberalisation / pound float, 2024)* (2024), https://www.cfr.org/in-brief/can-egypts-economic-overhaul-stave-crisis. Archived at http://web.archive.org/web/20260304230557/https://www.cfr.org/in-brief/can-egypts-economic-overhaul-stave-crisis.
  10. IMF (Country Report No. 24/318); African Business, *2024 to 2025 capital-account event to Ethiopia (easing to FX regime liberalisation, 2024)* (2024), https://www.imf.org/-/media/Files/Publications/CR/2024/English/1ethea2024002-print-pdf.ashx. Archived at https://web.archive.org/web/20260128150147/https://www.imf.org/-/media/files/publications/cr/2024/english/1ethea2024002-print-pdf.pdf.
  11. Central Bank of Nigeria; Punch, *2024 to 2025 capital-account event to Nigeria (easing to naira/FX liberalisation, 2024)* (2024), https://www.cbn.gov.ng/intops/FXMarket.html. Archived at http://web.archive.org/web/20260218015621/https://www.cbn.gov.ng/intops/FXMarket.html.
  12. CBRT; Daily Sabah, *2024 to 2025 capital-account event to Turkey (easing to normalisation of FX measures, 2024 to 2025)* (2024), https://tcmbblog.org/wps/wcm/connect/blog/en/main+menu/analyses/exit+from+kkm+accounts. Archived at http://web.archive.org/web/20260404092159/https://tcmbblog.org/wps/wcm/connect/blog/en/main+menu/analyses/exit+from+kkm+accounts.
  13. UNCTAD Investment Policy Monitor; US Dept of State, *2024 to 2025 capital-account event to Belarus (tightening to capital-account restriction, 2024 to 2025)* (2024), https://investmentpolicy.unctad.org/investment-policy-monitor/measures/242/tightens-mandatory-foreign-exchange-conversion-rules-. Archived at http://web.archive.org/web/20260616143053/https://investmentpolicy.unctad.org/investment-policy-monitor/measures/242/tightens-mandatory-foreign-exchange-conversion-rules-.
  14. Allen & Gledhill; Central Bank of Myanmar (Notification 37/2024), *2024 to 2025 capital-account event to Myanmar (tightening to FX/capital restriction, 2024 to 2025)* (2024), https://www.allenandgledhill.com/publication/articles/28938/central-bank-of-myanmar-requires-exporters-to-exchange-25-of-their-earnings-at-central-bank-rate. Archived at http://web.archive.org/web/20260616143341/https://www.allenandgledhill.com/publication/articles/28938/central-bank-of-myanmar-requires-exporters-to-exchange-25-of-their-earnings-at-central-bank-rate.
  15. Bangladesh Bank; US Dept of State, *2024 to 2025 capital-account event to Bangladesh (reviewed and held to change assessed, not scored)* (2024), https://www.bb.org.bd/monetaryactivity/mps/mps_h1fy26.pdf. Archived at http://web.archive.org/web/20260124052449/https://www.bb.org.bd/monetaryactivity/mps/mps_h1fy26.pdf.
  16. EY Ukraine; Wolf Theiss, *2024 to 2025 capital-account event to Ukraine (reviewed and held to wartime controls assessed, not scored)* (2024), https://www.ey.com/en_ua/technical/ey-ukraine-alert/national-bank-of-ukraine-further-revises-currency-restrictions. Archived at http://web.archive.org/web/20250803014658/https://www.ey.com/en_ua/technical/ey-ukraine-alert/national-bank-of-ukraine-further-revises-currency-restrictions.
  17. EconomyNext; Xinhua, *2024 to 2025 capital-account event to Sri Lanka (easing to relaxation of crisis-era controls, 2024 to 2025)* (2024), https://economynext.com/sri-lanka-to-lift-all-vehicle-import-restrictions-by-february-2025-minister-179540/. Archived at https://web.archive.org/web/20260616142904/https://economynext.com/sri-lanka-to-lift-all-vehicle-import-restrictions-by-february-2025-minister-179540/.
  18. IMF (Country Report No. 24/311); The Express Tribune, *2024 to 2025 capital-account event to Pakistan (easing to FX measures, 2024 to 2025)* (2024), https://imf.org/-/media/Files/Publications/CR/2024/English/1pakea2024004-print-pdf.ashx. Archived at http://web.archive.org/web/20250515141031/https://www.imf.org/-/media/Files/Publications/CR/2024/English/1pakea2024004-print-pdf.ashx.
  19. Interfax; Carnegie Endowment, *2024 to 2025 capital-account event to Russia (tightening to capital-control measures, 2024 to 2025)* (2024), https://interfax.com/newsroom/top-stories/111539/. Archived at http://web.archive.org/web/20251207132808/https://interfax.com/newsroom/top-stories/111539/.
  20. US Treasury OFAC; SWIFT, *OFAC sanctions listings & SWIFT access status (hand-graded at cutoff)* (2025), https://sanctionssearch.ofac.treas.gov/. Archived at http://web.archive.org/web/20260610162130/https://sanctionssearch.ofac.treas.gov/.
  21. DataReportal (Kepios / We Are Social / Meltwater), *Digital 2026: Global Overview Report* (2026), https://datareportal.com/reports/digital-2026-global-overview-report. Archived at http://web.archive.org/web/20260602193421/https://datareportal.com/reports/digital-2026-global-overview-report.
  22. Chainalysis, *The 2025 Geography of Cryptocurrency Report / Global Adoption Index* (2025), https://www.chainalysis.com/reports/2025-geo-crypto-report/. Archived at http://web.archive.org/web/20260509225024/https://www.chainalysis.com/reports/2025-geo-crypto-report/.
  23. TRM Labs, *TRM Labs on-chain flow data* (2025), https://www.trmlabs.com/. Archived at http://web.archive.org/web/20260522002436/https://www.trmlabs.com/.