In the sphere of cryptocurrencies African continent is an active and important participant. Bitcoin doubler 2x is going to consider features of crypto ecosystem in Africa.
Are cryptocurrencies popular in Africa?
Back in April, Google Trends` data showed that the highest volume of online searches for Bitcoin (BTC) belonged to Nigeria and Lagos. Such an interest is mostly caused by disappointment in existing payment solutions. For instance, PayPal, in fact, prohibits Nigerians to receive international money transactions, this happens because Nigeria has bad reputation of fraudulence. As a result, cryptocurrencies are almost the only solution for common citizens and businessmen, who form business relationships around the world.
According to Hootsuite’s 2019 Global Digital Yearbook, 10,7% of South Africans own cryptocurrencies – it is the highest mark among all the interviewed countries. By the way, Nigeria is also in the top of the list with 7,8% crypto holders. And Ghana has 7,3%.
Why is Africa so keen on cryptocurrencies?
Cross-border payments are a contributing factor, taking into account that money transactions are sent from states like South Africa to other 15 countries of the continent. What is more, unpredictability of local fiat currencies is another significant problem, what pushes people to look for alternative ways to save their funds.
Let`s take a look at Zimbabwe, where hyperinflation has made Bitcoin extremely popular. And now in Zimbabwe demand for BTC sharply exceeds supply, and sometimes the first cryptocurrency is traded with large premium to prices in the rest of the world. Today Zimbabwe is one of the largest crypto markets of the continent.
What could crypto, as well as blockchain, solve?
Aside from money transactions and fiat currency volatility, financial inclusion is another hot topic in Africa. Research from the World Bank suggests that many of the world’s 1.7 billion unbanked are on the continent, while 2 in 3 adults in sub-Saharan Africa do not have access to a bank account. Digital money already plays a key part in decreasing the number of unbanked adults. In a sense, Africa is better prepared for a move to cryptocurrencies, than other continents.
Blockchain is also demonstrating a plenty of promise. Distributed ledger technology (DLT) will contribute to solving old problems of economic development. Nigerian politicians believe that blockchain will drive the world’s fourth industrial revolution, and, for the first time, Africa has the opportunity to have a seat at the table.
In addition, there is the hope that blockchain technology can assist to improve African infrastructure. In Nigeria companies cooperate with an aim to understand, whether blockchain can be involved to make country`s roads safer. The West African nation of Sierra Leone has been working on the development of a blockchain-based ID system for its citizens amid hopes it could enable financial institutions to verify identities and build credit histories in a way that wasn’t possible before. Uganda has also teamed up with a blockchain startup to clamp down on the supply of counterfeit drugs countrywide.
What about cryptocurrencies regulation?
Some African countries completely banned digital currencies, among them are Morocco, Namibia, Algeria, Zambia and Libya. Other states don`t offer a clear status for cryptocurrencies, leaving users in a grey area.
On the other hand, South African government has shown enthusiasm concerning crypto potential. Official regulating bodies actually operate together with crypto companies and financial institutions with an aim to find the best way for development.