The region of Africa is going through an economic revolution that’s unlike anything that has gone before, with this largely being driven through the burgeoning fintech sector.
More specifically, we’re seeing the 2$-trillion cryptocurrency market begin to disrupt the existing financial market, with virtual currency adoption on the rise and various assets now being utilised for investment purposes.
But why is crypto adoption growing at such a rapid rate in Africa, and which countries are investing the most in this? Let’s find out!
Why is Crypto Adoption on the Rise in Africa?
There are various reasons behind the rise in crypto adoption in Africa, including the prevalence of unbanked residents in the region.
More specifically, around 57% of Africa’s total population (around 95 million people), currently don’t have a traditional bank account. This has left an entire generation of people who are financially excluded, with cryptocurrency well-equipped to bridge this gap and create a more equal society.
This is thanks to the technology’s innate accessibility and immutability, and its decentralised nature which removes any point of central control or the risk of manipulation.
Similarly, the last 20 years have seen numerous African countries have gone into a sustained period of economic volatility, which is commonly characterised by hyperinflation.
Describing any selection of price increases that exceed 50%, there have been numerous episodes of late, with South Sudan’s rate of inflation peaking at 102% between 2016 and 2017.
In Zimbabwe (which has a troubling history of hyperinflation), the central bank recently released a $50 dollar bill with a value of just $0.60 (at the bank’s current rate of exchange). This means that it’s not enough to afford a single loaf of bread, making it completely unfit for purpose.
Once again, cryptocurrency provides the perfect antidote to this, thanks to its decentralised nature and relative invulnerability to macroeconomic factors such as interest rates and inflation.
Which 3 Countries are Investing in Cryptocurrency the Most?
OK, we hear you ask, but which African nations are investing the most in the cryptocurrency market? This is certainly an interesting question given the prevalence of forex trading platforms that offer accounts with a $30 welcome bonus, so here’s our pick of the most prolific investors.
- South Africa: SA remains the single biggest crypto investor in the region, while the country is also ranked seventh on a global scale. Amongst its individual weighted metric include 41 on-chain deposits, while the P2P exchange trade volume has a value of 10 (placing it third by this metric behind the US and Ukraine globally.
- Nigeria: Next up is Nigeria, which has a worldwide rank of eighth and is the second most prolific crypto investor in the region of Africa. Nigeria’s on-chain value received a weighted value of 14, while the number of on-chain deposits here totals 112. The nation’s P2P exchange trade volume is ranked a little lower with a value of three.
- Kenya: While Kenya has just dropped out of the world’s top 10 crypto adopters, it remains prolific by African standards and shares in the growing trend for P2P exchanges. According to a Citibank report, Kenya holds more than KES 163 billion ($162 billion) worth of Bitcoin (which is approximately 2.3% of the country’s total GDP).