Digital analytics firm Chainalysis has reported that the cryptocurrency market in Africa has grown significantly since last year, in addition to the region having a larger share of total retail trade volume than the region’s global average.
In a report released Tuesday, Chainalysis said the value of the African crypto market rose more than 1,200% between July 2020 and June 2021, with high adoption in Kenya, South Africa, Nigeria, and Tanzania. The company added that the popularity of P2P platforms could be one of the factors driving greater adoption of crypto in the region, as some countries have restricted or banned money transfer into the country through local banks.
According to Chainalysis, between July 2020 and June 2021, the entire continent received cryptocurrencies valued at US $ 105.6 billion regions of the world – about 7% compared to the global average of 5.5%. Additionally, P2P platforms – including Paxful and LocalBitcoins – account for 1.2% of all crypto transactions in Africa.
“In many of these frontier markets, people can’t send money from their bank accounts to a centralized exchange, so they rely on P2P,” said Paxful co-founder and COO Artur Schaback. “Cryptocurrency products are becoming increasingly user-friendly, so they can bring more people into the crypto economy and help them realize that crypto is faster, cheaper, and more convenient.”
Other driving forces behind the adoption of crypto in the region could be remittances to help governments limit the amount of money people send overseas. Many users in Africa may also use cryptocurrencies as a faster, cheaper way to pay for international trade transactions and accumulate their savings to avoid potential fluctuations in the value of their fiat currency.
Related: South Africa’s financial regulator warns of Binance
Nigeria plans to test its central bank digital currency, eNaira, starting October 1st. South Africa is also part of a joint initiative with Australia, Singapore, and Malaysia to bring it to the market launch date.