Africa is rarely considered to be one of the larger markets for cryptocurrencies, but with the right factors in places, such as an increasing number of tech-savvy and inflation triggered by central banks, that might be set to change.
The surge in popularity of cryptocurrencies spurred the opening of at least 15 trading venues there within the past year alone. Peer-to-peer marketplaces also recorded a spike in trading volumes as bitcoin’s price skyrocketed last year. For example, trading volumes in Kenya increased to $8.1 million in December 2017. 2000 BTC worth of transactions took place in November 2017, when the cryptocurrencies price was hovering in the $10,000 range. Approximately 37% of those transactions occurred in South Africa.
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There are many factors that roll the possibility of cryptocurrencies success chances in Africa. The notion of Cryptocurrency can very well come into play here. In Africa, almost 40 percent of adults are active through mobile banking and payment systems which clearly indicates that technology is not a barrier. The steep hike in phone usage in Africa will only further encourage the involvement of cryptocurrency. The sayings that “Cryptocurrencies Will Make You Super Rich” doesn’t sound weird now because of the huge success it garnered recently.
Some Reasons Why Africa Can Become The Next Big Market For Cryptocurrency Adoption
Several countries in the continent suffer from rampant inflation. For example, Zimbabwe and South Sudan both have runaway inflation rates. With their paradigm of decentralization, cryptocurrencies offer an alternative to disastrous central bank policies. In fact, South Africa’s central bank recently announced a pilot test using Ethereum’s blockchain for smart contracts. So the local conditions in Africa are conducive to the adoption of cryptocurrencies.
The penetration of mobiles of mobiles within the continent has helped its population become comfortable with cryptocurrency technology. A large number of peoples are using the mobile banking system, the 4g technology is also started prevailing through this region, so there is no barrier in using the internet. The threat of government regulation, which has roiled cryptocurrency markets recently, is (presently) fairly low in Africa. While governments and agencies have warned about the dangers of investing in cryptocurrencies, regulators in African countries have taken a hands-off approach to trading at exchanges.
There is a huge potential for Cryptocurrency in Africa. Many Africans are expected to drive adoption for cryptocurrencies in the developing world and Buy Bitcoin. Much of the existing financial infrastructure is inefficient: banks and branches are expensive, currency transfers can often be expensive and slow and most of the developing world is still unbanked. There is the potential for Africans to leapfrog some of the existing financial services, in the same way, that many Africans skipped the part of owning a cumbersome and expensive landline and went straight to owning a mobile phone.