Cryptocurrency has really grown in the past couple of years after it was launched in 2009. Africa is one of the top regions of the world where digital currencies have been adopted.
It actually took a while for cryptocurrency to get a foothold in Africa. It has grown significantly and become another ‘tool‘ imbibed from the Western culture.
A woman recently narrated how she missed out on investing in Bitcoin some years ago when it was just 11 naira. Today, a bitcoin is worth millions of naira. Those who took the opportunity then became overnight millionaires and have got many to invest in crypto today.
Today, Bitcoin is a legal tender in Central African Republic who has also launched its government-backed crypto called ‘Sango Coin’. Nigeria is the leading African nation in crypto adoption despite government’s restriction. The country is only behind the USA in the number of crypto users worldwide.
According to the latest report by Nation, African blockchain companies raised roughly $304 million during the first and second quarters of 2022. Seychelles-based crypto exchange KuCoin also raised $150 million, which has since been dubbed the “mega deal” for the African blockchain market.
The Central African Republic is currently attracting significant funding from prominent venture capital firms as well as angel investors. All these are happening despite the prevailing market conditions.
Why is Crypto Booming in Africa Today?
There are several reasons for the adoption of crypto by Africans. They are discussed below-
More people have been educated about cryptocurrency, its investment, and other endeavors than before. There are several crypto-centric awareness and educational campaigns that were launched across the African continent.
Some tech firms have invested in a range of awareness and educational programs to accelerate the widespread adoption of blockchain technology and cryptocurrency. This has made many to know about crypto and its investment opportunities.
2. Tool for Payment
Cryptocurrencies are decentralized meaning there’s no central authority like that of the fiat currencies which are regulated/backed by the government.
Bitcoin was created for this purpose and can be used for payment, transfer, and savings without going to the bank. An increasing number of Africans are adopting cryptocurrency for this purpose.
Overall, multiple African countries are experiencing a surge in crypto adoption as residents continue to battle regional challenges like inflation and devaluation of their local currencies.
3. Population of Youths
Another reason behind the increased adoption is the growing number of tech-savvy young adults across the African region, paired with the increased use of smartphones and the internet. In its latest report, Finbold reported that Nigeria now ranks as the world’s most crypto-obsessed country, with a Google trends search score of 371.
Many of the youths who are unemployed has taken to crypto trading and investment to earn a living. Africa is leading the chart among other regions which include Latin America, Southeast Asia, and the Middle East.
Africa is undoubtedly one of the poorest continents in the world. There is high unemployment rate in this region. Some have taken to illegal ways to make money and then deal with crypto ‘to clean’ their money. This is however one of the reasons crypto transactions are banned in Nigeria financial institutions.
Crypto has transformed the African landscape, laying the foundation for the African blockchain ecosystem of the future. It has also allowed local talents to connect with the brightest minds and resources from the broader crypto community. It’s adoption is expected to increase as crypto firms turn their attention to the region.