Cryptocurrencies have forever changed the way people view the world of finance. It has offered people around the world the opportunity to make transactions in an easier and more efficient manner.
Many countries have enjoyed the many opportunities that cryptocurrencies have to offer, but one region is adopting cryptocurrencies the fastest in Africa.
It was reported recently that cryptocurrency adoption in Africa has increased as much as 1200% in less than a year, from July 2020 to June 2021. This marked the fastest adoption rate in the world. However, while the region has adopted cryptocurrencies at a very fast rate, the region is still very much trying to keep up with the development of the crypto industry around the world.
The key factor in the cryptocurrency adoption growth in the region was the increased P2P transactions. Markets like Kenya, South Africa, and Tanzania had some of the highest adoption rates not only in the region but around the world as well.
All of these countries managed to be ranked in the top 20 of the Global Crypto Adoption Index. A comprehensive data about this was issued by Chanalysis, which is a giant research company focusing on the crypto trading industry. The data showed that retail-sized transactions were 7 percent of the total volume in Africa. On the other hand, the global average for this is only 5.5 percent.
No Region Uses P2P As Africa Does
The data showcased that no other region around the world uses P2P platforms for crypto transactions at a higher rate than African crypto users. P2P crypto transactions have accounted for about 1.2% of all African transactions volume, and 2.6 percent of all volume for bitcoin specifically.
This is a very important finding, showcasing just how popular peer-to-peer transactions are in Africa. One of the leading countries in terms of P2P transactions in Africa is Kenya, where regular cash transfers are usually associated with higher fees.
While crypto transactions have become popular among the local population, the stance of the leadership of the country seems to be a bit different.
The regulators in Kenya have recently issued a warning to banks, advising them to not allow crypto transfers. in this situation, P2P transfers and platforms seem to be one of the only actual options that Kenyans have for crypto transactions.
When it comes to cryptocurrency market transactions, cross-region transfers account for the biggest share in Africa. In fact, it was reported that as much as 96% of transactions are cross-region transfers. This is quite high, especially compared to the other parts of the world. All regions combined have this rate at 78 percent.
Why Cryptos?
The last few years have been very interesting for the cryptocurrency trading market. More than ever before, people are showing a huge interest in the crypto trading market, and Africa is not alone in this trend.
Although numerous jurisdictions around the world are trying to strike against the development of the crypto trading market, the interest of tech-savvy people seems to be growing.
There are many reasons for this, one of the main being how easy it has become for people to trade cryptocurrencies. Some of the most popular crypto exchanges around the world can be used in just a few clicks, which makes them very comfortable and reliable.
In addition, many traders are taking advantage of automated trading, which makes everything even easier. For example, a trader can easily find the best crypto trading bot for his/her trading strategy, connect it to the exchange, and let it make profits.
But, for Africa, the reasons for crypto popularity are far greater than this. Most of the countries in Africa have suffered from high inflation rates over the past few decades. This has affected the way people view fiat currencies.
The younger generation of the region grew up watching the national currencies deteriorating, they saw what hyperinflation can do, and while looking for other ways to preserve wealth, one of the best options they found was cryptocurrencies.
In addition, there are many Africans who are working abroad. These people are sending money back to their families and relatives, however, sending money overseas can be associated with very high fees and commissions.
For P2P transactions using cryptocurrencies, the fees are a lot lower, which makes these transactions increasingly popular among Africans.
The market continues to show massive growth rates in Africa. Not only is it the younger generation of the region who is showing increasing interest in the market, but the older generation as well.
Because of all these, it should not come as a surprise that the crypto market is thriving and booming in Africa. For this region, crypto transactions seem to be one of the best options for not only preserving their wealth but also sending and receiving money.
But, while the interest of individual investors and the local population of numerous countries of Africa increases, the risks still remain. Many countries in the region are still working on crypto regulations and the future of the industry can greatly depend on what steps central banks in Africa decide to take.