Have you ever wondered about what could be the next crypto hub? Well, at the moment cryptocurrencies are widely accepted in the cities of the US, Netherlands, UK, Israel and Canada. Recently, Africa has seen some strong interest in bitcoin and altcoins. Unlike other countries where crypto exchanges are the prime method of buying cryptos, Africa is more into peer to peer trading which basically supports the satoshi vision. There are various reasons why Africa could be the next cryptocurrency hub, some of which are explained in this article.
Read this guide if you are also interested in knowing about the cryptocurrency adoption in Africa and whether it could become one of the crypto hubs in cryptocurrency or not.
- Do You Know: In 2018 South Africa, Ghana and Nigeria were the top three countries to have most searches related to Bitcoin. Even last year, Nigeria occupied the first place while Ghana and South Africa went below the top five list.
Cryptocurrency Adoption In Africa
The adoption rate in many parts of Africa is world-leading. That being said about 5.5% of adult internet users worldwide own and use cryptocurrencies, however, the statistic for cryptocurrency adoption in Africa is much higher than that. In South Africa, more than 10.5% of all people occupy cryptocurrencies which is the highest of any other country in the world. Other countries that have shown great interest in crypto are Nigeria and Ghana with above 7.8% and 7.3% of people having crypto.
The major reason for this is people’s frustration regarding the existing payments methods as well as the issue of hyperinflation in many parts of the country. For instance, if we take the example of Paypal, it doesn’t allow the users of Africa to receive international payment because of the issue of frauds. So, Africans have no other choice than using payment alternatives that charge high fees. Cryptocurrency can be the lifesaver for Africans allowing them to send and receive payments from all over the world.
Can Africa Be Next Crypto Hub
Chances of mass cryptocurrency adoption in Africa are high because of the aforementioned reasons but there are many barriers too which Africans have to face before that. The prime reasons why Africa can be the next crypto hub are mentioned below in detail.
Hyperinflation In Many Parts Of Africa:
When it comes to the top countries suffering from inflation, Africa is one of them. With Zimbabwe leading the list, with some of the worst cases of hyperinflation in the continent, other continents with high inflation rates are Nigeria, South Sudan and Liberia. After Venezuela, Zimbabwe has the second-largest inflation rate in the world. Next, comes South Sudan a rate of 56% and Liberia with 23% and Nigeria with 11% inflation. If we take the example of Nigeria, which has an inflation rate of 11%, the prices of basic goods there will increase by 6x in the next 15 years. This means that the citizens of Nigeria must earn six times of what they are earning now to maintain their lifestyle.
Many Zimbabweans have already started using alternative currencies instead of the native currency due to this reason. Moreover, many of them have started investing in cryptocurrencies because they are aware that their currencies wouldn’t be worth much within a few years. Cryptocurrency indeed is the best solution for countries and continents suffering from inflation that can provide them with cheap, safer and faster payment methods.
If you’ll search Google for the average age in Africa, you’ll find out the median age in Africa is 19 years which is quite young, this eventually contributes to the increasing interest of Africans in cryptocurrency. The young population of Africa is looking for stability and security and good livelihood. They’ve realised that all of this is not possible without investing their money rightly and with banks providing 0% returns this can never be succeeded. Half of the population in Africa is striving for new payment solutions like cryptocurrency that can help them earn interest and cut unwanted charges of payments within the country and internationally. Bitcoin and altcoins have shown a great store of value in the last decade which is attracting the young population of Africa.
High Fintech Activities:
Another reason that could bring mass cryptocurrency adoption in Africa in the near future is its increasing use of fintech. South Africa has the third-highest rate of fintech adoption at 82% after China and India at 87%. This rate is below 45% in other major countries like the USA, France and Japan. Moreover, Sub- Saharan Africa is leading in mobile payment transfers services while East Africa is leading in mobile payment adoption.
Many crypto companies have partnered with fintech platforms to provide Africa with the ability to send and receive cryptos from mobile and desktop devices all over the world.
Barriers That Can Come In The Way Of Cryptocurrency Adoption In Africa
While there are many reasons for Africa to become the next crypto hub, there’s definitely a lot of barriers that can also falter the cryptocurrency adoption in Africa. Some of the issues that could falter the growth of cryptocurrencies in Africa are listed below:
- Except for South Africa where many regulators have shown interest in crypto, there are other countries like Morocco, Libya, Namibia, Algeria and Zambia where it’s completely banned. Even the countries where cryptos aren’t banned are surrounded by uncertainties and doubts which are faltering its adoption.
- Cryptocurrencies like Bitcoin might not be the best replacement for African due to its high volatility. After all, the reason they are looking for an alternative of their fiat currency is its high volatility and uncertain future.
- The challenge of mass adoption in the continent comes with a lot of responsibilities. It depends on the developers as well as entrepreneurs who can deliver Africa with the crypto projects that could be of their use. This also brings the need for attracting expertise and new talents from various corners of the world.