- The African crypto market has continued to experience a surge despite a crackdown by central banks and the introduction of digital currencies such as the eNaira.
- The African continent has recorded an increase of 1,200% in crypto payments between 2020 to 2021
- Kenya, South Africa, and Nigeria ranked among the top 10 countries in the world that engaged in cryptocurrency exchange and use
Earlier this year, the Brookings Africa Growth Initiative (AGI) released its yearly Foresight Africa report, which revealed that Africa ranks among the fastest crypto markets in the world. The report aims to provide information that explores top priorities and ranking emerging markets to watch out for.
A significant part of the foresight report explores major trends in the African continent, especially in relation to those that promote economic recovery from the challenges of the COVID-19 pandemic. For the report, recovery channels such as climate change intervention, technological innovation, human rights, empowerment, etc., were reviewed.
The result of the polls revealed the increasing role of cryptocurrency in Africa, highlighting the continent as the fastest-growing crypto market in the list of developing countries profiled. It is also the third fastest-growing cryptocurrency market in the world, despite being the smallest.
According to the reports from the findings, the African continent has experienced an amazing increase of 1,200% in crypto payments within 365 days from 2020 to 2021. Kenya, South Africa, and Nigeria were also ranked among the top 10 countries in the world that engaged in cryptocurrency exchange and use.
Although it remains behind in terms of total value traded, the crypto market in Africa currently boasts the fastest adoption rate in the world. Through Peer to peer transactions which have been instrumental to the growth of the crypto market in the continent, Africa recorded $105.6bn worth of cryptocurrency transactions by July 2021.
The latest figures from a Data Analysis report by Chainalysis place the retail-sized crypto transfer in Africa at 7%, against the global average of 5.5%. Kenya, South Africa, Nigeria, and Tanzania are ranked among the top twenty markets with high adoptions globally.
“No region uses P2P platforms at a higher rate than African cryptocurrency users, as they account for 1.2% of all African transaction volume and 2.6% of all volume for Bitcoin specifically,” a part of the report read.
The reason behind the rapid growth in crypto transactions in Africa can be attributed to the rise of P2P platforms in countries like South Africa, Kenya, Nigeria, and Tanzania. Many citizens across the continent have adopted the model as an alternative to initiating cash transactions through banks.
Financial regulators in the continent have continued to create policies to curtail challenges and threats that can occur from crypto transactions. However, many critics believe that these policies are targeted at curtailing the growth of crypto in the continent. Whichever it is, it doesn’t seem to be evidently affecting the growth of the crypto market, though.
“P2P platforms are especially popular in Africa compared to other regions, and many African cryptocurrency users rely on P2P platforms not just as an on-ramp into cryptocurrency, but also for remittances and even commercial transactions,” Chainalysis said in the report.
“Cross-region transfers also make up a bigger share of Africa’s cryptocurrency market than any other region at 96% of all transaction volume, versus 78% for all regions combined. Below, we’ll explore the unique use cases and needs driving these trends in Africa.”
In conclusion, another reason behind the rapid increase in crypto transactions in the continent is the move by some African nations to launch their own virtual money backed, issued, and regulated by their central banks.
Experts predict that the growth of the crypto market in Africa will continue to increase at a geometrical progression.
