Africa sees a cryptocurrency boom as people go digital in bid to fight political disorganisation and weak local currencies, and major economies race to regulate.
Setting the scene
Top cryptocurrencies around the world include the likes of Bitcoin, Litecoin, XRP, Dash, Lisk and Monero. However, bitcoin is the most common within Africa and it is slowly becoming the new mode of financial transactions as the continent continues to transit more into the digital age.
Following steady growth within the continent, and because crypto is not limited by region and rather is linked to the internet, experts believe it will help the continent thrive. This holds especially for the growing trends of emerging technologies for mobile and the internet and overall digitalisation.
Bitcoin, and other cryptocurrency, are essential in the growth of the continent as they help in the preservation of properties of hard assets; such as minerals and land.
With the continual use of digital currency, combined with a few restrictions and regulations, cryptocurrency may be the ideal antidote for the growth of Africa over political disorganisation and weak local currencies.
Growth of Crypto in Africa
A survey data by Google trends shows that Uganda, South Africa, Nigeria, Kenya and Ghana have cryptocurrency as top 10 topics researched, showing the growing interest within these regions.
At the beginning of 2020, Arcane Research named Africa “one of, if not the most, promising regions for the adoption of cryptocurrencies’, where Bitcoin ownership rates in at 13% for South Africa and 11% for Nigeria. These are greater values in comparison to the worldwide average of 7%.
A notable reason for the growth of crypto is the fact that it is not regulated by any government agencies, and does not require the help of middlemen to operate since transactions are made over the internet and can be done anywhere in the world unlike Visa or Mastercard.
Yellow Card is a Nigerian-based bitcoin-buying service backed by Binance who have recently declared a $1.5 million seed funding round with Polychain, Celo and Andreessen Horowitz. This deal is set to push the expansion of crypto across the continent.
Yellow Card co-founder and CEO Chris Maurice shared to Forbes that:
crypto will go mainstream in Africa long before any other part of the world.
Regulating cryptocurrency in Africa
While 2018 was synonymous with the majority of African countries taking an undecided stance on how to address regulating cryptocurrency, 2020 saw a dramatic turn of events as regulators in Africa’s major economies fight for their spot in the race to regulate.
Back in April 2020, South Africa initiated its cryptocurrency laws by establishing a framework proposal. Nigeria, more recently, hinted at plans to regulate cryptocurrencies through its Securities and Exchange Commission.
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