Digital analytics firm Chainalysis reported that the cryptocurrency market in Africa has grown significantly since last year, in addition to the region having a larger share of the overall retail transaction volume compared to the world average.
In a report released on Tuesday, Chainalysis said the African crypto market grew in value by more than 1,200% between July 2020 and June 2021, with strong adoption in Kenya, South Africa, Nigeria and Tanzania. . The company added that the popularity of P2P platforms could have been one of the factors driving greater adoption of crypto in the region, as some countries have restricted or prohibited residents from sending money. to exchanges via local banks.
According to Chainalysis, the entire continent received $ 105.6 billion in crypto between July 2020 and June 2021. Yet it had a larger share of the overall market transaction volume comprised of “retail transfers” than any other. region of the world – around 7% compared to 5.5% on the global average. Additionally, P2P platforms, including Paxful and LocalBitcoins, account for 1.2% of all crypto transactions in Africa.
“In many of these frontier markets, people can’t send money from their bank accounts to a centralized exchange, so they’re relying on P2P,” said Paxful co-founder and COO Artur Schaback. “Crypto products are becoming more and more user-friendly, so they can bring more people into the crypto economy and help them see that crypto is faster, cheaper and more convenient. ”
Other drivers of crypto adoption in the region may include remittances as a way to bypass governments limiting the number of funds people can send overseas. Many users in Africa can also use crypto as a faster and cheaper way to pay for international business transactions and to hold their savings to avoid any possible fluctuation in the value of their fiat currency.
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Nigeria plans to pilot its central bank digital currency, eNaira, from October 1. South Africa is also part of a joint initiative with Australia, Singapore and Malaysia to launch a fiat-anchored digital currency, but has yet to release a possible start date for the CBDC trial.