Many believe that the African continent is the next frontier for crypto adoption and use. The world has already seen what cryptocurrencies can do to alleviate economies and people who have been deprived of opportunities. However, Africa is only beginning to get these advantages. While things are moving, progress is quite uneven.
So, it is worth understanding some of the countries leading the charge of Africa's next crypto revolution.
Nigeria is the largest economy on the African continent. So, it seems only fair that the country will lead the charge for crypto adoption. Many in Nigeria use cryptocurrencies as speculative investment products, merely holding them and waiting for values to rise. While it might seem more like a waste, at least they're using digital assets for something.
This past year has seen significant growth in crypto adoption – both out of necessity and because many would love to jump on the crypto bandwagon. At the end of 2020, news sources confirmed that Nigeria had become the second-largest Bitcoin market on the popular peer-to-peer crypto exchange Paxful. As the reports explained, the country traded over 60,000 BTC – valued at $566 million at the time – between 2015 and 2020.
With trades increasing by the year, the Bitcoin investment scene in Nigeria is as vibrant as it has ever been. It definitely helps that the leading cryptocurrency is riding a historical high and bringing the entire market up with it.
Data from Google Trends also showed that the sub-Saharan country recorded the highest number of Bitcoin searches in 2020. Interestingly, Google Trends also shows that Nigeria is one of the top five countries worldwide, factoring searches for Ethereum.
Of course, most of these have been mainly driven by citizens' desire to simply get on the crypto train and see where it leads. However, there have been times when crypto adoption became a matter of necessity. Nigeria witnessed one of its darkest periods last October, with citizens taking to the streets to protest police brutality.
The protests drew attention from the international community, and the country's tech companies soon trooped out to support. Donations poured in, and protest organizers were able to ensure peaceful demonstrations for weeks.
Soon, however, the government blocked donations to the protesters, forcing many to switch to cryptocurrencies. Leveraging social media, protest organizers were able to rally people to pitch in and make crypto donations. They also got support from many across the world, including Twitter CEO and Bitcoin enthusiast Jack Dorsey.
So, it goes to say that crypto adoption in Nigeria is growing both as an investment and as a functional asset. With the government making progress on policy proposals, there is no reason why this trend can't continue in 2021. It helps that the cryptocurrency market is healthy and vibrant.
South Africa trails only Nigeria on the African continent when it comes to economic growth. It is perhaps the most technologically developed country on the continent, however. As expected, it has become a breeding ground for crypto development.
To this day, South Africa leads the African continent in terms of crypto ATMs. Data from CoinATMRadar shows that the country has six ATMs available – almost half of the entire continent's supply of 13 ATMs. The numbers might seem paltry relative to those outside Africa, but South Africa continues to lead the continent, and that's it.
The same Google Trends data shows that Bitcoin search data reveals that South Africa is the tenth most favored nation for Bitcoin searches. Currently, the country and Nigeria are the only two African countries on that list.
While Nigeria and South Africa are leading the crypto industry's charge in Africa, they primarily owe their growth to their significant economies. On the flip side, Kenya is working considerably with blockchain and crypto to provide impressive real-world solutions.
Last September, Chainalysis published its Crypto Adoption Index of 2020. The rankings considered several metrics for placing countries, with many of them focusing on deposits and internet penetration in countries.
The metric showed that Kenya is the top nation in Africa for crypto adoption and only the fifth globally.
Kenya is also the only top African country to be considering the launch of a Central Bank Digital Currency (CBDC). Last month, Dr. Patrick Njoroge, the Governor of the Central Bank of Kenya (CBK), told reporters that he had been speaking with other international central banks to explore the potential of launching a CBDC.
Speaking at Georgetown's DC Fintech Week, the Central Bank Governor explained that the consultations were ongoing. He highlighted that the push was due to the growth of private cryptocurrency use in Kenya. With a CBDC, the government will be able to create its burgeoning industry and bring the benefits of private digital assets to the citizens.
The Governor added that the Central Bank would need to watch the crypto niche closely. With private cryptocurrencies still posing risks of money laundering and terrorist financing, they must maintain effective oversight. Of course, the fact that the world appears to be shifting to a more cashless economy also plays right into those plans.
With blockchain adoption and the potential of a CBDC, Kenya has the potential to make significant progress in its crypto space. There is the risk of increased government influence, but only time will tell how the country fares.