Although Africa’s cryptocurrency economy is the smallest in the world, it is among the fastest growing and has been described as “the most dynamic and exciting”. This is according to a newly published preview to Chainalysis’ 2021 Geography of Cryptocurrency report.
According to the document which was obtained by Business Elites Africa, about $105.6 billion worth of cryptocurrency was received into the African continent between July 2020 and June 2021, amounting to over 1200% growth by value during a one-year period.
The report also noted that Africa has one of the highest grassroots adoption of cryptocurrency in the world. As a matter of fact, African countries such as Nigeria, South Africa, Kenya and Tanzania are all ranked in the Top 20 Global Crypto Adoption Index. The report attributed the widespread grassroots adoption of cryptocurrency on the continent to factors like savings needs, remittance needs and the availability of P2P platforms.
Note that besides having one of the fastest growing cryptocurrency market in the world, “Africa also has a bigger share of its overall transaction volume made up of retail-sized transfers than any other region at just over 7%, versus the global average of 5.5%. These numbers are a big part of why so many African countries rank high on our adoption index, as smaller transfer sizes suggest higher grassroots adoption amongst everyday users.”
The report also examined why P2P platforms are popular in Africa. One of the reasons is that some African countries have made it hard for their citizens to send money to cryptocurrencies businesses through banks. As a result, they resort to P2P platforms such as Paxful, which are non-custodial entities that allow customers to trade cash for Bitcoin and other cryptos.
Adedeji Owonibi, the Chief Executive Officer of Nigerian blockchain consultancy company Convexity, gave some insights on how the country’s cryptocurrency economy has changed since the Central Bank of Nigeria banned banks from facilitating cryptocurrency transactions:
“Binance used to be the most popular platform by far, but after the central bank’s sanction, many are moving to P2P platforms, like Paxful and Remitano. Informal P2P trading is also huge in Nigeria on Whatsapp and Telegram. I’ve seen young people and businessmen in these groups carry out transactions for several millions with popular OTC merchants.”
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