Key Takeaways
- Africa crypto market grows by more than 1200% in the past 12 months
- P2P trading is the dominant type of crypto trading in Africa
- Crypto adoption growth due to the ease of cross-border transactions using digital assets in Africa
According to data shared by Chainalysis, Africa is the smallest cryptocurrency economy in the world, but it is also one of the most dynamic at the moment.
The continent's crypto markets have indeed grown by +1200% since last year.
Notably, it is a popular adoption of Bitcoin and cryptocurrencies that seems to have started in Africa.
As in other regions of the world, institutions are leading the charge, but they are not the only ones.
A larger part of the transaction volume corresponds in fact to “retail ” transactions:
Peer-to-peer (P2P) cryptocurrency transfer platforms are also particularly popular in Africa.
The report noted that the use of P2P platforms was diversified and looking at the volumes of African transactions on LocalBitcoins and Paxful it is easy to see why.
Africa dominates other world regions in P2P transactions with central Asia coming a distant second.
According to Chainalysis, the reasons for this predisposition for peer-to-peer transfers are multiple.
On the one hand, some countries like Nigeria and Kenya have put barriers to users who would like to obtain cryptocurrency through their banking services.
P2P exchanges, therefore, make it possible to circumvent these limitations.
Africans have also increasingly used cryptocurrencies to receive remittance payments from countries globally.
In 2019, it was estimated that sub-Saharan countries received over $48 billion in remittances.
Crypto makes it possible to make such payments at lower costs.
Crypto payments have also evolved as a means of foreign trade for African businesses.
Businesses in the region typically find it difficult to get enough forex to pay for suppliers located abroad and most especially in China.
All these elements, therefore, show that in Africa, the use cases have been multiple and this has led to the growth of cryptocurrencies.
Do you think Africa is ready to lead the global crypto adoption rates?
