Chainalysis recently published their Geography of Cryptocurrency report. The report demonstrates how patterns of crypto usage vary around the world. Incorporated into the report is The Global Crypto Adoption Index 2020, that lists South Africa, Kenya and Nigeria among the top 10 countries in the world for crypto adoption.
This came as quite the surprise to many readers, as many would not expect substantial crypto adoption to be present in these African countries. Looking deeper into the details of why people in these countries are turning to crypto, it becomes strikingly clear that there is a massive opportunity for crypto to thrive throughout Africa, and developing regions.
An Overview Of Africa:
The report suggests that, even though Africa has the smallest crypto economy of any region analysed by the report, this crypto activity appears to be creating life-changing benefits for users in the region by, amongst other things, offering low-fee remittances and an alternative way to save money.
During the period of July 2019 – June 2020, Roughly $3.7 billion worth of crypto was transferred to and from overseas addresses to ones based in Africa, with $562 million of that being in retail-sized payments under $10,000. Intra-region remittances between African countries have been historically expensive, with fees reported as high as 15%. People are seeing an opportunity to use crypto as a means for faster and substantially cheaper international and intra-regional remittances.
The analysis further outlines that people in Africa are using crypto as a means to mitigate currency instability. A large majority of African countries suffer from severe currency devaluation and instability, making it extremely difficult for residents’ savings to hold their value.
The South African Rand (ZAR) is arguably one of the most volatile fiat currencies, having lost more than 50% of its value against the US Dollar over the past 10 years. Nigeria, Egypt, Algeria, Ethiopia, and Ghana face similar issues with their respective currencies. Chainalysis’ data confirms that it is highly likely that residents of African countries are using crypto as a store of value in order to preserve their savings.
Crypto use-cases are on the rise in Africa, it seems that Africa will play a vital role in crypto adoption in the near future. Watch this space!