Any mention of the African continent, be it any region, conjures up visions of poverty, illness, etc. Therefore, a report supplying the news that Sub-Saharan Africa is exhibiting keennes\s to adopt cryptocurrencies, does come as a surprise! If you are standing on the edge of buying Tokens or cryptocurrency, use crypto-code.
According to the survey, the number of retail investors engaging in small transfers, has been increasing. This has been in evidence, despite the bearish trend in vogue since May 2022. At the same time, transactions of other sizes have taken a plunge.
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The Scenario in Sub-Saharan Africa
The general view had been that this region could only be at the bottom, concerning transaction volumes. After all, the statistical data supported such an assumption. The on-chain volume had been a mere 2% ($100.6 billion), during the period ranging between July 2021 and June 2022. Thus, the growth had progressed by just about 16%, in comparison to 2020.
However, recent in-depth surveys of the cryptocurrency landscape have revealed something quite different. Sub-Saharan Africa possesses several well-developed digital currency marketplaces. Many people have managed to penetrate deep into the world of cryptocurrencies. They have even succeeded in integrating cryptocurrencies into their day-to-day financial activities.
The major hubs of such activities are Kenya and Nigeria. Kenya ranks 19th on the Global Crypto Adoption Index, while Nigeria ranks 11th. Both the nations are strong, regarding populations, and purchasing power. This is evident on P2P (peer-to-peer) cryptocurrency exchanges. Thus, they prove crucial for improving this region’s economy, especially in the digital currency arena.
Around 6.4% of the transaction volume, may be attributed to the contributions made by retail-sized transfers. Such a transfer is less than $10,000 USD. Furthermore, most of the transfers are undertaken by individuals. Therefore, 95% of digital currency transactions are retail in nature.
Now, suppose, we consider only those monetary transactions that are below $1,000, then the transaction volume would touch 80%. This indicates that the Sub-Saharan African region contributes more towards cryptocurrency growth, than any other area in the continent.
It could be that retail investors and traders are experimenting with digital currencies, due to economic necessity. Furthermore, this could be happening in nations, where the values of local currencies are plunging. Kenya and Nigeria are two examples of such places.
Best of all, it is the youth, who are opting to become retail investors. The adolescents and young adults believe that virtual currencies would help to preserve, and build, wealth. The belief is firm, despite the low economic opportunities on display. In other nations, people of all ages explore the world of cryptocurrencies, for multiplying existing wealth.
Opinions of Adedeji Owonibi and Ray Youssef
He is the founder of Convexity, a blockchain consultancy based in Nigeria. Convexity is also a product studio. He has observed plenty of daily traders engaging in small business deals, for making ends meet. They are all individuals. There are no high-level, institutional traders in the Sub-Saharan African region.
Retail investors are responsible for popularizing the crypto market in Nigeria. They are generally the young, who are educated graduates. The snag is that they are not finding it easy to get jobs. Therefore, the unemployment rate is high. To such people, cryptocurrencies appear as a Godsend. They may take care of their families, and fulfill moderate financial needs.
Of course, Stablecoins, such as Tether, are more popular than Bitcoin and altcoins. Additionally, it is not helping that the Nigerian Naira has become susceptible to volatility, creating all-round apprehensions.
He is the CEO of Paxful, a P2P cryptocurrency exchange. Paxful and other similar platforms account for 6% of all digital currency transactions volume, in Sub-Saharan Africa. This figure is more than double the figures on display in Oceania, Central Africa, and Southern Asia.
Ray Youssef is happy that this region has been proving so useful for Paxful’s growth. Nigeria has been displaying 55% year-over-year enhancement of users. They are remittance users, thereby proving to be Paxful’s biggest market attraction. Kenya boasts of 140% growth.
He predicts that Ghana may soon emulate the example set by Nigeria and Kenya. It is because it finds a spot in the hearts of its closest neighbors!