“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.”
Crypto adoption within the region had grown by 1200% between July 2020 and June 2021, thus making it the fastest adoption rate to be experienced anywhere in the world.
Whilst Europe still appears to be a continent that has its reservations regarding cryptocurrency and continues to prefer fiat currencies that they are used to, there is no denying that Africa has been friendlier to digital assets and has embraced it greatly.
According to some figures, it is understood that crypto adoption within the region had grown by 1200% between July 2020 and June 2021, thus making it the fastest adoption rate to be experienced anywhere in the world.
No region uses P2P platforms at a higher rate than Africa
However, there is a caveat that needs to be noted, which is that it is still playing catch-up to other regions when looking at the overall values to be traded. Africa managed to amass $105.6 billion worth of crypto in forecasts for the year that ended June 2021, with peer-to-peer (P2P) transactions in growth markets such as Kenya, Nigeria, South Africa, and Tanzania being the main driver. Indeed, the aforementioned countries are ranked as some of the biggest adopters in the world, as they are placed within the top 20 Global Crypto Adoption Index.
Chainalysis’ latest figures show transactions volume made up of retail-sized transfers in Africa was 7%, against the global average of 5.5% before highlighting: “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.”
Naturally, there are a number of reasons that can perhaps highlight why Africa has become a leader in regard to widespread cryptocurrency adoption and investment, including the simple fact that the continent is the second-most-populous in the world with around 1.3 billion people living in the region. Other reasons can include the lack of financial infrastructure that is experienced, as well as political unrest and historic issues such as civil wars, corruption, and financial instability due to inflation that is typically experienced within the region.
The growth of crypto gambling and the use of a Bitcoin casino with VIP offers within Africa has also helped to increase the level of adoption to have been experienced across the continent, with a number of countries having seen rapid amounts of growth. Indeed, there are a host of benefits that have been experienced by gamblers, with each of them providing a number of advantages. One is simply due to the financial instability that some economies have experienced as crypto keeps its price across the world, rather than being linked to the national fiat currency, whilst other benefits have included the ability to gamble when it may not be possible or by being able to avoid high amounts of tax that may be incurred when using traditional currency.
Indeed, the issues outlined continue to make financial services less accessible than before, as many have found it hard to acquire a bank account. It is understood that around 57% of the entire population in Africa remains unbanked. Nonetheless, this does also provide the continent with the opportunity to be the perfect place for cryptocurrencies, as the population only requires access to a smartphone in order to access blockchain networks.
Nigeria and Kenya have played a huge role
As highlighted by Chainalysis’ latest figures, P2P platforms are used at a higher rate in Africa compared to anywhere else in the world, with Nigeria and Kenya having seen these platforms become entrenched. Consumers use them to bypass the strict financial regulations that are in place within the respective nations, such as being able to make cash transfers to cryptocurrency businesses.
There have been attempts in both countries to try and stop banks from allowing these transfers as each has advised them not to do it, however, the use of P2P platforms means users are able to do it freely and without the help of financial institutions.
“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.”
Indeed, it would seem the recent decision made by the Central Bank of Nigeria to disallow banks from facilitating crypto transactions has had a huge impact on the crypto economy within the country, as many residents have decided to use P2P platforms as a result, with younger people having turned to encrypted messaging services such as Telegram and WhatsApp in order to protect themselves.
Moreover, the popularity to have been experienced in regard to digital currency appears to have had a profound impact on other nations within Africa, as some are looking to launch their own virtual money that would be backed and issued by central banks; especially as the use of fiat cash begins to decline amid an increase in the use of electronic payment methods.