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Cryptocurrency a solution for African Payments Woes?


New technology often creates a rift between those who have it and those who don’t. You don’t see a great need for garden caretaking services or mobile food delivery apps in improvised countries. Nor there is demand for driverless taxis in regions which have no roads. However, there is one potential area where technology can help those which are living in underdeveloped parts and that is digital currency or cryptocurrency.

 

There is a genuine need for a secure way to make payments across the borders, the technology is in great need where most people are poor, and the majority do not have bank accounts like Africa. Today only 41 percent of adults in developing countries have an account and this number drops to over 20 percent among adults living in extreme poverty. Essentially peoples living in these regions rely on cash to carry out their transactions, and to conduct their daily businesses from accepting payments for services and goods to paying for everything including food, education, shelter, and healthcare.

 

The problem with these financial methods is that they can be insecure. An additional consequence for people who are unbanked is that they cannot get credit. Lacking formal financial relationships, no institution will lend them money. As the old saying goes, “necessity is the mother of invention”. That is indeed the case with Africans they have found a way to get around these cashless problems. The African region is expected to have 500 million cell phone subscribers by 2020. In fact, Kenya, Namibia, Zimbabwe have now more than 40 percent of adults using mobile banking, according to GSM association.

 

Now people are making bill payments, mobile top-ups and international remittances with the help of their cell phones. Mobile operators in the region today are using mobile money to create new financial ecosystems that can deliver a range of innovative new services across multiple industry sectors, including utilities and agriculture.

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Why cryptocurrencies will flourish in Africa

 

It’s hard to expect wide cryptocurrency adoption in a continent where a significant percentage of the population do not have bank accounts, but several indications show that cryptocurrencies will survive in Africa. First, the fact that more than 40 percent of adults actively use mobile money and P2P payment systems in most parts of Africa indicate that low usage of bank accounts isn’t mainly a technology issue. Second, Bitcoin and other cryptocurrencies are already achieving wide appeal in several African countries: in Nigeria, for example, P2P Bitcoin trading increased by about 1,500 percent in 2017 — a percentage only surpassed by China on a global scale.

 

Now Africans are investing heavily in bitcoins for investment purposes because this is the only available mean for safe investments and also use Best Bitcoin Wallets to store your precious Bitcoins. In Zimbabwe, a country that experienced a currency crisis that saw its economy collapse, citizens turned to cryptocurrencies as a store of value, and the African nation once had the highest Bitcoin prices in the world. In South Africa, over 1,000 merchants already accept Bitcoin as a means of payment. Finally, the huge projected growth in cell phone usage in Africa is only good news for cryptocurrency adoption.

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