Africa’s cryptocurrency economy grew by over 1200% in one year
According to a study by Channel analysis, the cryptocurrency economy in Africa grew by 1200% between July 2020 and June 2021. The value of transactions was estimated at US $ 105.6 billion during this period.
This makes Africa the third fastest growing crypto-economy in the world, which is quite surprising judging by regulators on the continent who do not unanimously welcome alternative currencies with open arms. The story in Zimbabwe remains the same as the RBZ is always unmoved when everything crypto-related is mentioned even from a distance.
Earlier this year, we saw the Central Bank of Nigeria withdraw an RBZ by telling all traditional financial institutions in the country not to trade with crypto exchanges. The reason the Nigerian Central Bank took this position was because the #EndSARS protests were raising huge sums of money through Bitcoin donations.
The only way for the authorities there to stem the tide of the movement was, as is always the case in Africa, through regulation. Even in progressive South Africa, we have seen the authorities there take the odd stance of prohibiting residents from trading Bitcoin and other cryptocurrencies across borders.
However, even with all this pressure, Africans were not deterred and P2P transactions were the order of the day. According to the study by Chainalysis Nigeria, Kenya, Uganda, South Africa and Ghana are leading the way. Enthusiasts use platforms like Paxful to bypass the traditional financial system and central bank regulations.
The study also found that Africans use cryptocurrencies as a form of savings due to the loss of value of local currencies. Chainalysis noted that in Nigeria, P2P trade increased when the value of the local currency fell.
The same phenomenon has also been observed in Kenyaâ¦ It seems that central banks in Africa are better served by putting in place favorable cryptocurrency frameworks rather than cracking down on their use. This would most certainly stem the flow of crypto scams which pose a greater threat than alternative currencies.
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