Africa is one of the most promising continents for cryptocurrency adoption. The growing numbers of cryptocurrency owners and trade volumes indicate that continent is shifting towards digital currencies.
A recent analytical report from Arcane Research reveals that the unique mix of African economical and demographical situation indicates the massive potential for the cryptocurrency adoption in the continent.
The peer-to-peer (P2P) Bitcoin trade in Sub-Saharan Africa (the area that lies south of the Sahara) has rallied recently, exceeding the $10 million weekly volume and creating a new all-time high for the region, according to the data of CoinDance. Furthermore, with such an increase in volume African continent bypassed the Latin American region for the first time in history.
The local countries like Uganda, Nigeria, South Africa, Ghana, and Kenya are the ones of the top 10 countries in the world, that google for Bitcoin the most often over the past 12 months.
Furthermore, South Africa ranked third-highest worldwide at 13% of its internet users owning cryptocurrencies. Nigeria following with its 11% at the same time. Meanwhile, the world’s average is almost two times lower, about 7% of internet users owning digital currencies.
However, according to the analytics, these ownership rates are mirrored by an extremely underdeveloped infrastructure as well as other challenges that create a controversial situation. As the report called “The state of crypto – Africa” states:
Cryptocurrency adoption in Africa is somewhat of a dichotomy.
Challenges for cryptocurrency adoption
Despite the growing numbers of cryptocurrency owners and P2P trades, the African continent still is the mixed picture. Since the local countries share similar trends of a young and growing population, the poor internet and electricity coverage is still a challenge for the crypto community.
Furthermore, despite the few exceptions, the continent still has a shortage of crucial infrastructure, that comes together with the wider adoption of digital assets anywhere else in the world.
African countries lack nodes, mining operations, supporting merchants, ATMs, and cryptocurrency exchanges. According to the report, just 0.2% of Bitcoin and Ethereum nodes are located in Africa. The vast majority of them being based in South Africa. In the meantime, there is no meaningful Bitcoin mining activity across Africa yet. And the number of merchants accepting cryptocurrency and ATMs is significantly lower in Africa than in any other region.
Despite the major challenges that are still to overcome across the continent, there are factors thought – like volatility in local currencies, high inflation rate, or lack of banking infrastructure, that might create a fertile ground for digital currencies and thus increase the cryptocurrency adoption further.