In Sub-Saharan Africa, cryptocurrency transactions amounted to $100.6 billion, between July 2021 and June 2022. This is according to a research note published at the end of September by Chainalysis. This region is also home to the most dynamic markets despite its small share in global transactions.
According to a research note published at the end of September by Chainalysis, an American blockchain analysis company based in New York, cryptocurrency transactions amounted to $100.6 billion in sub-Saharan Africa, between July 2021 and June 2022. This is an increase of 16% compared to the period July 2020 – June 2021. Despite this remarkable progress, the region accounts for only 2% of cryptocurrency transactions recorded globally.
Nigeria, Kenya and South Africa in the lead
This minimal weight does not, however, prevent sub-Saharan Africa from hosting the most dynamic markets in the world. In this case, South Africa, Kenya and Nigeria, which respectively occupy the 30th, 19th and 11th ranks in the global cryptocurrency adoption index created by Chainalysis. Nigeria, in particular, is a big user of virtual currencies. In October 2021, the country launched eNaira, the digital fiat currency issued by the Central Bank. The maturity of this Nigerian market has motivated Binance, the world’s largest cryptocurrency exchange, to begin discussions with national authorities this month. Objective: to make Nigeria the first country in West Africa to establish a virtual free zone.
A majority of retail payments
According to the Chainalysis report, the crypto landscape in Sub-Saharan Africa is marked by the dominance of the retail market. Indeed, retail payments represent 95% of all transfers, including 80% for transactions under $1,000. The region’s cryptographic market is also characterized by massive use of P2P (peer-to-peer or peer-to-peer) platforms. In this category, Sub-Saharan Africa weighs around 6% of all crypto trading volume. It outranks Central and South Asia and Oceania, which have the second largest volumes.
A way out of poverty
Chainalysis further notes a contrast between Western and African countries in terms of why young people turn to digital currencies. In Europe, young people want to increase their wealth. On the African continent, on the other hand, it is more a question of preserving or creating wealth, in the face of unfavorable economic conditions. Indeed, the countries of sub-Saharan Africa have millions of unemployed young people, despite their diplomas and qualifications. In the absence of a steady job or job, the cryptocurrency universe is a lifeline. It is the only way for some to feed their families.
Growth that will continue
“The use of crypto is driven by daily necessity, especially in countries where the values of local fiat currencies are falling, as we have seen in Nigeria and Kenya,” the Chainalysis report states. Finally, the firm highlights the very important use of cryptocurrencies for cross-border fund transfers and commercial transactions on the continent. He believes that this use of digital currencies will continue to grow as long as people face difficulties that they solve. Cryptocurrencies, for example, preserve savings in times of economic volatility and make cross-border transactions possible in places with tight capital controls.
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Cryptocurrencies: booming transactions in sub-Saharan Africa
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