African countries adopt crypto faster than their global counterparts

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By Seth Onyango Bird Newsroom

Africa amassed $ 105.6 billion worth of cryptocurrency in the forecast for the year ending June 2021, thanks to peer-to-peer (P2P) transactions in key growing markets.

Markets like Kenya, Nigeria, South Africa, and Tanzania have recorded some of the highest local adoptions in the world and ranked in the top 20 on the Global Crypto Adoption Index.

The latest figures from digital analytics firm Chainalysis show that the transaction volume comprised of retail transfers in Africa was 7%, compared to a global average of 5.5%.

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No region uses P2P platforms at a higher rate than African cryptocurrency users, as they account for 1.2% of all transaction volume in Africa and 2.6% of all Bitcoin volume. in particular, we read in part in the report.

Transaction volumes for several African currencies have particularly increased on LocalBitcoins and Paxful, the world’s largest P2P platforms in terms of transaction volume since 2016.

Currently, P2P on these platforms has become entrenched in Nigeria and Kenya, where consumers use them to bypass strict financial regulations that restrict money transfers from banks to cryptocurrency companies.

Regulators in both countries have advised banks not to allow these transfers, but P2P platforms, which are not custodians, allow customers to exchange money for cryptocurrency with each other. Therefore, users can send cryptocurrency to centralized exchanges for more trading options if they wish.

P2P platforms are particularly popular in Africa compared to other regions, and many African cryptocurrency users rely on P2P platforms not only as a ramp to cryptocurrency, but also for remittances and even business transactions, Chainalysis said in the report.

Inter-regional transfers also account for a larger share of the cryptocurrency market in Africa than any other region at 96% of all transaction volume, compared to 78% for all regions combined. Below, take a good look at the unique use cases and needs driving these trends in Africa.

Adedeji Owonibi, CEO and founder of Nigerian blockchain consulting firm Convexity and the first associated cryptocurrency community Hub CBHUB, told Chainalysis that the Nigerian cryptocurrency economy has changed since the central bank of the country has banned banks from facilitating cryptocurrency transactions.

Binance was by far the most popular platform, but after central bank sanctioning, many are turning to P2P platforms, like Paxful and Remitano, he said.

Owonibi noted that many P2P activities take place through informal group chats on messaging apps rather than conventional platforms.

Informal P2P commerce is huge in Nigeria on Whatsapp and Telegram. I have seen young people and businessmen in these groups transacting millions with popular OTC merchants.

Meanwhile, the growth of cryptocurrency in Africa comes as a number of countries on the continent seek to launch their own virtual currency, backed and issued by central banks.

Africa’s interest in digital currencies comes as the use of fiat cash declines in Africa’s major economies, with consumers adopting electronic payment methods such as Lipa Na M-PESA, credit cards and payment gateways.

bird story agency.

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