The cryptocurrency market in Africa has grown significantly since last year, according to digital analytics firm Chainalysis, with the region accounting for a larger transaction volume than the global average.
Africa’s crypto market increased in value by more than 1,200 percent between July 2020 and June 2021, according to a report released on Tuesday by Chainalysis, with high adoption in Kenya, South Africa, Nigeria, and Tanzania.
Given that some countries have restricted or banned residents from sending money to exchanges through local banks, the popularity of P2P platforms could have been one of the driving factors toward greater crypto adoption in the region, according to the company.
Between July 2020 and June 2021, the entire continent received $105.6 billion in cryptocurrency, according to Chainalysis. Despite this, it had a larger share of the market’s overall transaction volume made up of “retail-sized transfers” than any other region in the world — roughly 7% versus the global average of 5.5 percent.
Furthermore, peer-to-peer platforms, such as Paxful and LocalBitcoins, account for 1.2 percent of all crypto transactions in Africa.
“People can’t send money from their bank accounts to a centralized exchange in many of these frontier markets, so they rely on P2P,” said Paxful co-founder and COO Artur Schaback. “Crypto products are becoming more user-friendly, allowing more people to join the crypto economy and see how faster, cheaper, and more convenient it is.”
Remittances as a way to get around governments limiting the amount of money people can send abroad could be another driver for crypto adoption in the region.
Many African users may be using cryptocurrency as a faster and cheaper way to pay for international commercial transactions and to store their savings to avoid possible fiat currency value fluctuations.
Nigeria plans to launch a pilot program for its central bank’s digital currency, the eNaira, on Oct. 1. South Africa is also a partner in a project to launch a fiat-pegged digital currency with Australia, Singapore, and Malaysia, but no start date for the CBDC has been announced.