Cryptocurrency adoption in Africa is booming, according to a new report by cryptocurrency analysis firm Chainalysis. Between July 2020 and June 2021, Africa’s cryptocurrency market grew by 1,200 percent – making up for a whopping $105.6 billion (roughly Rs. 775 crores), a recent report by Chainalysis said. Kenya, Nigeria, South Africa, and Tanzania all rank among the top 20 countries on the Global Crypto Adoption Index, and together, the African nations represent the third most rapidly growing cryptocurrency market in the world. The report also noted that the bulk of these crypto transactions aren’t driven by large institutional investors, but instead small and medium-sized retail buyers and businesses.
“Cross-region transfers also make up a bigger share of Africa’s cryptocurrency market than any other region at 96 percent of all transaction volume, versus 78 percent for all regions combined,” the report said.
The study further observed that facilitating crypto payments using peer-to-peer (P2P) platforms is more popular in Africa, as compared to other countries. P2P platforms are online investment gateways that enable borrowers to attract lenders to identify and purchase loans that meet their investment criteria. Using these platforms, Africa-based crypto buyers and investors get into trading in digital currencies.
“Some countries, such as Nigeria and Kenya, have made it difficult for customers to send money to cryptocurrency businesses from their bank accounts, either by passing laws or simply by advising banks not to allow these transfers. However, this isn’t an issue for P2P platforms, which are non-custodial and let customers trade cash for cryptocurrency amongst themselves,” Chainalysis explained.
For now, Vietnam, India, Pakistan, and Ukraine are sitting at the top four ranks of rapid crypto adoption. The rate of cryptocurrency adoption rose by 880 percent in 2020 in these regions, a report released earlier this month had claimed.