Many of the most practical uses for crypto are in emerging markets, according to Jocelyn Cheng.

Many of the most practical uses for crypto are in emerging markets, according to Jocelyn Cheng.

The crypto crash has significantly chopped down the value of assets such as bitcoin and ethereum, but some investors say it’s also presented opportunities to back companies at the forefront of emerging trends in the Web3 space.

Jocelyn Cheng, the London-based CEO of Luno Expeditions, believes many of those opportunities lie beyond the US. Her firm, the venture arm of Luno, a crypto-investing company, has invested in 30 Web3 and fintech companies in 15 countries, including Nigeria, Kenya, and Pakistan.

Several of Luno’s portfolio companies, including Kotani Pay, a crypto-payments startup, focus on customers in emerging markets such as Africa, South Asia, and Latin America.

Insider spoke with Cheng about where she thinks crypto applications are poised to grow globally.

This interview has been condensed and slightly edited for length and clarity.

What areas within crypto are most exciting to you right now?

We continue to see a lot of interest in stablecoins. There was a very public stablecoin blow-up , but the core utility for emerging markets is still there. They’ve become popular because not only are they good on-ramps from fiat currency to crypto, but also because by definition, they are linked to a stable asset such as the US dollar.

They’re able to help weather price volatility, especially for emerging-market investors. Historically, to have access to US dollars, they’d have to incur significant fees. With stablecoins, the benefit is that it really makes access to the US dollar much more affordable.

What’s the use case for stablecoins for the average person in an emerging market?

I’ll give you a personal example, if it’s OK. Many years ago, I was living in Tanzania and I was renting an apartment. I had a US-dollar account in the US, and they demanded my rent in US dollars in cash. But because I was in Tanzania, I had to go to the ATM and — out of my US-dollars account — withdraw Tanzanian shillings.

That was the only option. I had to pay ATM fees, foreign-transaction fees, out-of-network fees, and I had to take those Tanzanian shillings and take them to a local FX dealer just to exchange them back into US dollars to hand to my landlord. My landlord then took that US-dollar cash and had to do basically the same in reverse to deposit it in their local account.

We think that the benefit of having stablecoins is being able to make that process more streamlined. We’ve invested in companies like Caliza, which is a B2B company that offers fintech companies the infrastructure to offer synthetic-US-dollar accounts using stablecoins. A customer can deposit local currency, where it’s converted to a stablecoin like USDC, held by a custodian that provides direct access to US banking.

Are there any other opportunities you see for crypto in emerging markets?

There is a huge opportunity for crypto to provide better international-payment rails. Remittances are the source of income for 800 million people globally. I think crypto has a really important ability to make remittances faster and cheaper.

In the traditional method, it can take up to five days, and on average, it can cost 7% for a $200 transfer. On the other hand, crypto allows the transfer of money within minutes from one wallet to another. User-to-user fees would depend only on the blockchain’s transaction fees.

In some of the pilots that we’ve seen for using crypto as a remittance rail, we’ve seen that transaction fees are really reduced. There’s a company in our portfolio called Kotani Pay, which has been testing cross-border payments of gig workers in Kenya. Using crypto, they’ve cut down transaction fees by 93%.

We’ve also seen other companies a little bit more advanced than our early-stage focus. Other companies like and Aza Finance work in emerging markets and use crypto rails for remittances. They offer a much lower cost: 1% to 4%, rather than the 7% global average, and it also takes minutes to settle rather than five days.

What are the specific benefits that crypto offers over other technologies?

It streamlines the whole flow. If you’re looking for instant settlement or very quick settlement, it avoids the need for the provider to have enormous cash reserves in destination countries.Ultimately, there is a need for a last-mile payout for the recipient. There is a need to, for example, integrate with mobile money or, in some cases, 7-Eleven — wherever that last-mile pickup point is for the recipients. So it is critical to integrate with non-crypto systems as well, but crypto provides a faster and […]

source Many of the most practical uses for crypto are in emerging markets, according to Jocelyn Cheng.

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