CRYPTO AFRICAN Market

Acryptocurrency is a type of currency that uses digital files as currency based on an open, distributed ledger that records transactions in codes called block chain technology. Usually, in cryptocurrency, the files are created using the same methods as cryptography (the science of hiding information).

Cryptocurrencies make it seamless to transfer and receive money globally, which is a game-changing alternative for countries with underdeveloped banking infrastructure, which many Africa countries are presently. Since crypto-based transactions reduce the risk associated with international trading, safety concerns are also improved in this situation.

Cryptocurrencies are quicker, cheaper and easier to use. It makes use of

“decentralized control”, which implies that it is not controlled by a single person or government. It is a new currency technology not limited by geography because it is internet-based. Cryptocurrencies were more accessible than traditional banks during the pandemic and lockdowns and this expanded the use and growth across Africa.

Africa is one of the most promising continents for cryptocurrency adoption. This is because it’s a potential market where cryptocurrency has yet to take shape. Africa, the second-most populous continent in the world with over 1.5 billion inhabitants, boasts a truly diverse and developing economy and market space. Examples of the currencies include Bitcoin, Ethereum, Litecoin, XRP, Cardano, EOS, Monero, etc, but Do4Africa explains. Bitcoin leads the pack in Africa and worldwide.

The development and acceptance of digital currencies in Africa have been truly used. In 2022, the digital asset industry saw several high-profile breaches of trust and was largely characterized by volatility, the adoption of cryptocurrencies within the continent continued to grow. According to TechPoint Africa, Africa's cryptocurrency market has grown by over $100 billion in the last year, making Africa a target investment for the crypto market in years to come. It allows everyone with access to a mobile device and internet connectivity the opportunity to engage in activities similar to those conducted through financial institutions and intermediaries. That includes payments, sending remittances and making investments.

According to a UNCTAD, a United Nations agency, cryptocurrencies have become popular in African and other developing countries Significant proportions of it in Kenya (8.5%), South Africa (7.1%) and Nigeria’s (6.3%) populations are using these digital currencies. It is to be noted that in June 2022, the Central African Republic adopted bitcoin as a legal tender.

According to a report by BBC, the number of businesses accepting Bitcoin and other cryptocurrencies has increased in Kenya. Despite the Central Bank of Kenya’s warning about the volatility of these cryptocurrencies. Also, according to the Blockchain Association of Kenya, the amount of Bitcoin traded in 2021 was worth more than $1.5 million. This number is expected to grow significantly as cryptocurrency adoption grows.

Nigeria, Africa’s most populous country is another country where cryptocurrency adoption is on the rise. Even better, platforms in Nigeria facilitate the sale and purchase of cryptocurrency in local currency. Because of the growing popularity of cryptocurrency in Africa, cryptocurrency transactions are now accepted by merchants. As adoption grows, it is almost certain that crypto payments will become the norm.

A report by Arcane Research, a channel that deals with digital asset research and analysis, African countries are among the top countries in terms of Bitcoin adoption. These countries are South Africa, Nigeria, Kenya, Uganda, and Ghana.

Aside from Bitcoin, other cryptocurrencies with high adoption rates in Africa include Ethereum, Lisk, and Dash. Zimbabwe, South Africa, Kenya, and Nigeria are among the countries where these currencies are widely used. In other words, African countries have a long way to go in terms of cryptocurrency adoption.

According to Finder's crypto adoption trends report for August 2022, about four million people, or 10 per cent of South Africans, are cryptocurrency holders. According to Chainalysis, Africa is one of the fastest-growing crypto markets in the world but remains the smallest, with crypto transactions peaking at $20 billion per month in mid-2021. It noted Kenya, Nigeria, and South Africa to have the highest number of users in the region.

According to BitcoinAfrica.io, the top 5 African countries whose communities are adopting Bitcoin are South Africa, Nigeria, Zimbabwe, Kenya, and Ghana. They have the most demand for digital currency as well as the most active local cryptocurrency communities. South Africa, Nigeria and Kenya appear in the top 10 countries by Cryptocurrency

Adoption

According to the 2020 Geography of Cryptocurrency Report.” Chainalysis, the top 10 Countries in Crypto Adoption Index are:

5. Kenya

6. United States of America

7. South Africa

8. Nigeria

9. Columbia

10. Vietnam

It was reported that Nigeria has one of the most dynamic peer-to-peer Bitcoin trading markets in the world, but Cryptocurrency has been banned and advised its citizens that Bitcoin investments had no legal cover. On the 12th of January 2017, Central Bank of Nigeria warned all the Banks and Financial institutions in the country to never use, hold, trade, or transact any virtual currency. Less than a month later, on the 5th of February 2021, the apex bank ordered banks across the country to close the accounts of anyone who deals in cryptocurrency.

However, Nigeria is not the only country in Africa that has banned cryptocurrency. Morocco, Algeria, Libya, Egypt, Zambia, Zimbabwe, and Namibia have banned the use of cryptocurrency. However, policymakers in the continent are worried that cryptocurrencies can be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows. Widespread use of crypto could also undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.