More and more Africans are joining to use cryptocurrencies as an exchange tool, putting aside fiat currencies. A recent study by analytics firm Chainalysis revealed data that shows that local stocks and businesses use cryptocurrencies to stay away from high fees, regulatory complications, and unstable currencies.
Every month, Africa makes around 600,000 cryptocurrency transfers. Since the beginning of this year, the number of transactions under $ 10,000 increased by 55%. They reached a total value of $ 316 million. The nations that use crypto the most are Nigeria, South Africa, and Kenya.
Abolaji Odunjo, the owner of a cell phone shop in Lagos, Nigeria, started using Bitcoin to pay his Chinese providers. During an interview with Reuters, he explained why he abandoned fiat money: “Bitcoin is very useful to me protect my business from currency devaluation and, at the same time, it also allowed me to grow.”
According to a study carried out by the World Bank, making remittance in sub-Saharan Africa leads you to to pay an average commission of 8.9%: South Africa is at the top of the ranking of the most expensive countries, rates in South Africa can reach an amazing amount of 20 %. with Bitcoin, it’s a very different story, bitcoin has fees usually lower than 3%.
Odunjo remarked that Bitcoin allows you to consolidate business on an international league without having to use any single U.S. dollar, which price is extremely expensive and inaccessible in the region. The currencies of many African countries tend to be worrying because of its instability: this process increases the demand and then the price of the USD. In the past decade, the value of some currencies, such as the South African rand, has more than halved against the dollar.
South Africa is now a cryptocurrency hub too
Nigeria has always been the dominator in the continent when it comes to trading volume. The report also stated that South Africa possesses the highest number of cryptocurrency ownerships. Globally, South Africa ranks fifth for crypto adoption. This number came to light because of their connected citizens. Last week, South Africa posted its second solid weekly volume on the Localbitcoin (BTC) market, the strongest volume reached to date, with nearly $ 1.65 million worth of BTC changing hands.
On the one hand, African citizens trust crypto assets, even with the inadequate infrastructure and regulatory policies that could make the path more manageable to travel. On the other hand, there is noticeable growth; the continent is getting very interested.
A lot of heavy players in the cryptocurrency eco-system are turning their eyes to the African markets, the founder of the world leader in cryptocurrency exchanges Binance, Changpeng Zhao, said in a recent “ask me anything” session that Africa is a very juicy market for crypto and the exchange is looking for a very wide expansion on the entire continent for the next years.
By: Jenson Nuñez.