Crypto in Africa: All Hype or Here to Stay?

With roughly 22 Million users on the continent and counting, crypto-adoption in Africa is very much on the rise. It appears that emerging markets in the developing world are the fresh battlegrounds for crypto use cases across the globe.

The foremost reason why this is the case is the fact that large populations in the developing world are systematically shut out of the legacy global financial matrix. To date, approximately 57% of adult Africans remain unbanked – essentially cut off from money transfer, borrowing, lending, and other luxuries offered by traditional finance.

Second, such demographics will also typically have been exposed to unstable local currencies which arbitrarily lose value. The Ghanaian Cedi, for instance, lost more than 50% of its value between January and December 2022, as the Kenyan Shilling loses nearly half its value against the US Dollar since this time last year.

African populations are prime candidates for the adoption of a cryptocurrency like Bitcoin (BTC) or a stablecoin like Tether (USDT. Unlike their weak respective local currencies, these let their users hold their savings well into the future.

The unbanked provide ready markets for crypto-focused start-ups coming in with on-ramps through which such masses might be onboarded into a global, permissionless, and instant crypto-verse. All you need to use crypto is a smartphone and an internet connection.

Even feature phones now let users opt into cryptocurrencies, as seen with the South African Bitcoin startup, Machankura, which transacts BTC between users via USSD codes. Innovations like these mean that even rural populations in the remotest corners of Africa can transact back and forth with each other.

Another core emerging crypto use case is remittances – the African diaspora sending money back home to friends and family. It turns out that cryptocurrencies are cheaper and faster to use for this category compared to entrenched cross-border solutions like MoneyGram or Western Union.

Combine this with a predominantly youthful, tech-savvy African population and you get a continent on which crypto-adoption will only continue to grow. So far, significant portions of the Kenyan, Nigerian, and South African populations continue to be key crypto users on the continent, with an estimated 4.5 Million Kenyans, 13 Million Nigerians, and 4.2 Million South Africans all holding cryptocurrencies.

A deteriorating global financial outlook, regional political tensions, and growing inflationary pressures across the continent will only continue to push more Africans into the censorship-proof, permissionless, and inflation-proof world of decentralized cryptocurrencies.

Besides, there’s a proliferation of startups on the continent fashioning seamless on-ramp and off-ramp solutions in anticipation of the next Billion crypto users, and Tech Safari will be there to cover it all.