Africa boasts a burgeoning crypto market driven by the need for financial inclusion, cross-border payment solutions, and alternative investment opportunities. According to Chainalysis’ Global Crypto Adoption Index, several African countries rank among the top globally for cryptocurrency adoption. The continent’s young, tech-savvy population and the prevalence of mobile money systems have created fertile ground for blockchain innovation.
However, Africa’s crypto and blockchain ecosystem is highly fragmented, with countries experiencing varied levels of adoption and development.
Leaders in African Blockchain Development
Nigeria:
Nigeria leads the continent in crypto adoption, fueled by high remittance fees and the naira’s depreciation.
The Nigerian government introduced the eNaira, Africa’s first Central Bank Digital Currency (CBDC), signaling its commitment to blockchain technology.
Startups like Bundle, BuyCoins, and Yellow Card are driving the crypto economy forward.
South Africa:
South Africa has one of the most advanced financial systems in Africa and is a hub for blockchain innovation.
Projects like VALR and Revix are making strides in crypto trading and investment.
The South African Reserve Bank is actively exploring CBDCs.
Kenya:
Kenya’s M-Pesa revolution paved the way for crypto adoption.
Companies like BitPesa (now AZA Finance) are leveraging blockchain for cross-border payments and remittances.
The Kenyan government has shown interest in integrating blockchain into public services.
Who Is Falling Behind?
Central African Republic (CAR):
While CAR made headlines by adopting Bitcoin as legal tender, the move has faced criticism for lack of infrastructure and poor public awareness.
The initiative highlights the risks of premature crypto adoption without proper groundwork.
Francophone Africa:
Many Francophone African countries lag behind in blockchain adoption due to reliance on traditional financial systems and limited digital literacy.
North Africa:
Despite high interest in crypto, stringent regulations in countries like Morocco and Algeria stifle blockchain innovation. But recent developments shows progress mainly in Morocco.
Challenges to Overcome
Regulatory Uncertainty: Many African governments have not established clear policies on crypto and blockchain, creating a fragmented regulatory environment.
Infrastructure Deficits: Limited internet penetration and unreliable power supplies hinder blockchain adoption in rural areas.
Education and Awareness: Many Africans remain unaware of the benefits and risks of blockchain technology.
The Future of Blockchain in Africa
The potential for blockchain technology in Africa is immense:
Financial Inclusion:
Blockchain can provide unbanked populations with access to financial services. Decentralized finance (DeFi) platforms are already bridging this gap.
Transparent Governance:
Blockchain can enhance transparency and reduce corruption in public sector operations, including elections and supply chains.
Agriculture and Trade:
Blockchain can revolutionize agriculture by improving traceability, ensuring fair trade, and providing microloans to farmers.
CBDC Development:
More African countries are likely to follow Nigeria’s lead in exploring CBDCs to modernize their financial systems.
While Africa faces challenges in the adoption of crypto and blockchain technology, the progress in countries like Nigeria, South Africa, and Kenya demonstrates the continent’s potential. With strategic investments, supportive policies, and robust infrastructure, blockchain could become a cornerstone of Africa’s economic transformation. As the world watches, Africa’s crypto journey promises to be a story of innovation, resilience, and opportunity.
Did the #bitcoin finally found a real and practical use case? It is sad to accept this but the reality in that Bitcoin was well designed to skip central controls and to protect from inflation, both conditions are present in any war context.
An easy way to make donations, transfer money…
As the situation become to worsen in Ukraine, the humanitarian efforts required support, sending donations at low fees was never easy than today, crypto allows a such mechanism and remove the complexity of traditional channels.
An easy way to skip the sanctions
On the other side of the war, Russia has been quickly subject to several financial sanctions from all European countries, the last one was a very severe one and touched the backbone of the russian banks by banning few banks from SWIFT protocol. As stated in the European council announcement:
On 2 March 2022, the EU decided to suspend the broadcasting activities in the EU of the Russian state-owned outlets Sputnik and Russia Today until the aggression against Ukraine is brought to an end and until the Russian Federation and its associated outlets cease conducting disinformation and information manipulation actions. It also introduced a SWIFT ban for seven Russian banks.
It is not a secret that on top of the Chinese CIPS protocol, Cryptocurrencies will be used to bypass those sanctions.
A refuge from the ongoing inflation…
With or without sanctions, this was would have a big impact on both sides economies and inflation and even beyond their limits, the inflation rates of 2022 are already forecasted to be historical. Cryptocurrencies are seen in those conditions as a refuge from the inflation…
What’s next? Will cryptocurrencies be banned?
The current condition may create a short term positive effect but it may bring eyes on the matter, this may lead to a few countries banning cryptocurrencies and mining… but if the cryptocurrencies resisted those limitations, it may be the biggest winner of this sad tragedy.
If you follow the Bitcoin mining you may have been waiting for the new fork that has been completed on block height 709632.
What is new with Taproot?
The new soft fork introduce the MAST : Merkelized Abstract Syntax Tree MAST to improve the scripting capabilities and privacy of the Bitcoin network.
To understand more about bitcoin forks, the difference between soft and Hard forks, read here.
Taproot upgrade will improve scripting capabilities and privacy by implementing MAST which will replace currently used P2SH (pay to script hash). P2SH and MAST are ways of locking the transactions with conditions until the conditions are met. P2SH allows other users to see the conditions and allows everyone to see all the different ways they could have met the conditions. While MAST hides all the conditions except the ones that are met when the transactions are processed.
The upgrade will also improve Lightning Network privacy by making Lightning Network channels look like regular bitcoin transactions.
Chainalysis is a data platform that drives applications for investigations, compliance, and market research. It is backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other top startup capital companies to encourage financial independence with less risk. Over 60 countries supply data, software, services, and research to government agencies, exchanges, financial institutions, insurance, and cybersecurity firms.
According to research by Chainalysis, the number of individuals utilising peer-to-peer P2P cryptocurrency exchanges in Kenya, Nigeria, Vietnam, and Venezuela has doubled in the last year. According to the research, many locals utilise peer-to-peer exchanges as their primary gateway into cryptocurrencies since they lack access to centralised exchanges. Many citizens use cryptocurrencies to protect their funds from currency depreciation, send and receive remittances, and conduct commercial transactions.
P2P trading accounts for a large portion of all bitcoin activity, but it is not recorded on blockchains. This is why the study prioritised nations with lower purchasing power parity per capita and fewer internet users by ranking them by peer-to-peer trading volume. In 2020, the research dropped one metric: the number of deposits per nation weighted by the number of online users.
Bitrefill, a firm that lets consumers survive on cryptocurrencies by purchasing gift cards with bitcoin, has a strong presence in Vietnam. Kim Grauer, Chainalysis’ head of research, who prepared the report, claimed Vietnam topped the list. Nigeria is a different scenario. According to Grauer, “It has a significant commercial crypto industry. More and more transactions are taking place on the cryptocurrency rails.”
In a new index of worldwide crypto adoption, Afghanistan, Cuba, and Iran are top-ranked countries. Analysts say it’s challenging to gauge bitcoin acceptance at the grassroots level. Some experts predict sanctioned countries, such as Cuba, will be undervalued because transactions are more difficult to trace. One expert stated, “The technique has a significant blindspot.”
Argentina and Brazil are the Latin American nations where decentralised finance (DeFi) protocols are most often utilised. The two South American countries were rated 16th and 17th, respectively, behind the United States, Vietnam, and Thailand in the international rankings. This might imply that the acceptance of cryptocurrencies at the lowest economic levels is due to a desire to avoid inflation or transfer remittances more easily.
An article from theafricaReport stated that african countries are adoption crypto faster than counterparts. Let’s go through data to review this statement.
Referring to the same article.
Africa amassed $105.6bn worth of cryptocurrencies in forecasts for the year ending June 2021, driven by peer-to-peer (P2P) transactions in key growth markets.
Markets like Kenya, Nigeria, South Africa, and Tanzania had some of the highest grass-roots adoptions in the world and ranked in the top 20 Global Crypto Adoption Index.
Digital analytics firm Chainalysis’ latest figures show transactions volume made up of retail-sized transfers in Africa was seven per cent, against the global average of 5.5%.
This move is mainly driven by Kenya and Nigeria as we can see in the Chainalysis ranking of Crypto Adoption by Country, where consumers use them to sidestep stringent financial regulations that curtail cash transfers from banks to cryptocurrency businesses.
“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,” reads the report in part.
When looking at the monthly share of all P2P Crypto platforms, we can see that African share is constantly growing but remain far behind Asia and America (both NORAM and LATAM)
Africa’s interest in digital currencies comes as the use of fiat cash declines in major economies in Africa, with consumers adopting electronic payment methods such as Lipa Na M-PESA, credit cards and payment gateways. But remain suffering from a regulation issue and very fragile due to the political changes in several countries.
The case of Patricia platform is just one of the example stability is not yet available in africa to have a consistent and sustainable cryptocurrencies environment.
Which one is overvalued and which one is undervalued?
The DeFi and NFT boom of 2021 has raised the demand for a scalable smart contract platform. The competition in the crypto space is increasing, with every project or token fighting to make it to the top!
Among the two most fiercely competing projects in the crypto space are Solana and Cardano.
In recent months, Cardano and Solana have grown in popularity, this Video from MarketCap is comparing the 2 technologies.
Make sure to let us know in the comments below… Which one do you choose: Cardano or Solana?
