Monday, January 30, 2023

Africa’s cryptocurrency sector has not only expanded over time, but the continent also boasts some of the most outstanding local crypto adoption and usage rates in the world, with Kenya, Nigeria, South Africa, and Tanzania all ranked in the top 20 of the Global Crypto Adoption Index.

  • Crypto has enjoyed a meteoric rise globally since its formal introduction.
  • African governments have had varied reactions to the growing popularity of cryptocurrency.
  • Cryptocurrency is slowly but surely changing the way Africans conduct their financial life.

Crypto has enjoyed a meteoric rise globally since its formal introduction. China has 20% of global crypto assets, more Americans are trading than ever because of Super Bowl advertising and celebrity endorsements, and Vietnam has the greatest per capita Bitcoin transaction volume globally.

Africa also holds a significant position in the crypto ecosystem, with some of the highest adoption and transaction volumes globally. Digital currencies provide a quick, easy, and direct peer-to-peer alternative for remittances, international business, and savings.

ALSO READ: Crypto adoption and usage in Africa soars despite challenges

Africa’s cryptocurrency sector has not only expanded over time, but the continent also boasts some of the most outstanding local crypto adoption and usage rates in the world, with Kenya, Nigeria, South Africa, and Tanzania all ranked in the top 20 of the Global Crypto Adoption Index.

With over 50 African nations and over 40 coins, Bitcoin and other cryptocurrencies enable users to transfer money and execute transactions in a shared currency, eliminating the need for costly bank transfers that might be difficult to get in remote locations.

African governments’ divergent reactions to crypto

African governments have had varied reactions to the growing popularity of cryptocurrency. Kenya has adopted a rigorous hands-off stance in keeping with the nation’s long-standing monetary policy. The government seems disinterested in regulating cryptocurrency at this time. On the other hand, Nigeria has chosen the opposite path, issuing a stringent ban in February 2021, as President Buhari had promised.

Despite the restriction, coordinators of the #EndSARS anti-police brutality movement purportedly utilized bitcoin to coordinate the campaign. Despite the official prohibition, it is assumed that many Nigerians have at least an informal investment in Bitcoin as a possible hedge against the faltering Naira, whose value versus the US dollar has plummeted in half in recent years, in contrast to soaring crypto.

South Africa, whose people and government have completely embraced blockchain technology and digital assets, is likely one of the continent’s most crucial crypto hubs.

Over $100 million in crypto transactions happened every day in the nation in certain months. The government acknowledges crypto as a decent investment instrument and is taxed similarly to any other investment.

The attractiveness of crypto adoption and usage to African millennials

When the breakthrough cryptocurrency Bitcoin first appeared on the market, many people felt it would be the most significant currency for individuals in the developed world. African millennials, in contrast, hand, are fast dispelling preconceptions about Bitcoin adoption.

Some analysts argue that the current rise of Cryptocurrencies results from the inflation of a fiscal bubble. Despite this, many other financial experts think crypto’s meteoric surge is here to stay. People who are keen to get into investing have found it impossible to resist the tremendous rise in cryptocurrency. Thousands of young Africans are already placing large bets on crypto.

Africans have been rapidly adopting technology throughout the continent for many years. Smartphone adoption among young people is almost near-universal in Uganda, Nigeria, and Kenya. Given their technological proficiency, few will be surprised that many African millennials have embraced crypto’s potential.  Nobody can foresee crypto’s near future. However, this form of currency seems well-positioned to stay crucial and relevant in the long run.

ALSO READ: Cryptocurrency offers hope for Africa’s economic resurgence

Crypto’s promise for stability proves crucial for young populations in Africa

Economic growth and employment prospects in Uganda have trailed significantly behind literacy. Even for university graduates, obtaining permanent work in Uganda might be difficult. In this terrible scenario, it’s no surprise that many young Ugandans turn to cryptocurrency exchanges like OKEx as a possible future guarantee.

Many young Africans are unable to engage significantly in the stock market. Because of cryptocurrency, these Africans can increasingly mimic the investing behaviours of other daring young people worldwide.

Of course, crypto usage goes beyond individuals looking to make a fortune via investment. Financial traders essentially employ cryptocurrency in most regions of the globe. Cryptocurrency is mainly used for business by Africans. A rapidly rising generation is incorporating cryptocurrency into their everyday lives in economic hotspots like Lagos and Johannesburg.

Transferring cash across African countries may be a complicated procedure for young Africans. Historically, transactions like these may cost the sender up to 20%. Because cryptocurrency is genuinely global money, it may provide a better alternative.

Bitpesa, a technology platform, enables consumers to utilize Bitcoin to send money across international boundaries at a minimal cost. This technique is not only inexpensive, but it is also relatively quick when compared to bank transfers.

The spectacular growth of crypto adoption and usage in Africa will continue

Cryptocurrency is slowly but surely changing the way Africans conduct their financial life. Even if the value of cryptocurrency fluctuates, many Africans see it as more trustworthy than their volatile native currency. Only time will tell how much cryptocurrency will influence Africans’ spending and living.

With all this knowledge, it is reasonable to expect crypto to continue its spectacular growth in Africa and other parts of the globe. The simplicity of peer-to-peer currency transactions between people from different monetary regimes and more nations beginning to recognize crypto as the wave of the future can only imply that crypto adoption and usage will be a significant part of African society for years to come.

ALSO READ: The rise of a new dawn: Blockchain technology adoption in Africa

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