Africans have good motives to adopt crypto: unstable currencies, expensive international payments and a young enthusiastic population
While there are significant obstacles to further adoption of crypto in Africa, parts of the continent show strong enthusiasm for cryptocurrencies and what they promise — especially for the unbanked who could begin to make savings.
In a report from Arcane Research, titled The State of Crypto in Africa, it is made clear that there is limited crypto mining throughout the continent, as well as low levels of merchant adoption to accept cryptocurrencies as payment options. These factors can, however, be attributed to the underdeveloped nature of many African nations.
Beyond these limitations, Africa does show an enthusiasm for crypto that makes it stand out on a global scale. LocalBitcoins and Paxful see on average 14% of their global weekly P2P transactions occur in Africa, which is a fantastic indicator for how popular its use is. As well as this high volume, both Nigeria and South Africa are actually above the world average for internet users who hold Bitcoin.
The report by Arcane Research lists obstacles to wider adoption as inflation, political instability, unstable electricity grids and a lack of financial infrastructure.
Cryptocurrencies like Bitcoin can get around these problems by being decentralised. By having a finite supply, Bitcoin is protected from the ravages of inflation and is not controlled by a single entity to keep it out of reach from corrupt governments.
Bitcoin does not require physical institutions to carry out transactions or open up accounts/wallets. Finally, while the fees for Bitcoin transactions are rising, they are still much lower than fees charged by banks in Africa for cross-border payments.
Combine these benefits with a largely young African population who are open to new ideas and are and you have a perfect storm for future adoption.
Over the next decade or so as these technologies could become normalised; the growth in crypto uptake in Africa could skyrocket, especially with Africa’s population growth still well above the global average.
What is more, as certain countries start to benefit from legislating crypto usage, their neighbours who may have previously been wary, or even hostile towards crypto, are more than likely to soften their stance and move towards adoption themselves.