Digital use is quickly taking over daily life, especially in nations with a history of financial instability or where there are significant impediments to accessing traditional financial goods like bank accounts.
A prime example is Nigeria, the most populated nation in Africa. Its impatient, young populace has to deal with money controls, rising unemployment, and the whims of the black market in currency transactions every day.
Some insights: Nigeria has one of the greatest youth populations in the world, with a median age of 18 and a population that is primarily between the ages of 15 and 65. This presents a chance to harness the youth’s potential for sustainable development and growth.
Nigeria is ranked as the second-best-performing country in the world in terms of interest in Bitcoin. In the same vein, the country is also the largest source of BTC trading in Africa.
Nigerians are said to be the most crypto-savvy population on the African continent, ranking as the top country for crypto adoption in Africa and 11th overall. 35% of the country’s population aged between ages 18 and 60, was reported to have owned or traded cryptocurrencies in 2022.
Trading volume in SSA: Statistics from UsefulTulips.org, which monitors bitcoin transactions on the two largest peer-to-peer cryptocurrency trading platforms in the world, has shown that Sub-Saharan Africa (SSA) recently surpassed North America as the location with the highest volume of this type of crypto activity.
Crypto markets in Africa are among the fastest-growing in the world, with a peak of $20 billion in monthly transactions expected to occur in the middle of 2021, according to Chainalysis. Kenya, Nigeria, and South Africa are the countries with the most users in the region.
Factors responsible: Many Africans view the growing use of mobile payment (m-payment) services as a logical next step because they are independent of traditional banking institutions and provide security against currency depreciation. This trend was accelerated during the COVID-19 pandemic.
Nigeria’s burgeoning interest in cryptocurrencies is being spurred by the lack of competent financial services in the nation, which has been a major driver of crypto adoption throughout Africa. Nearly 17.36 million Nigerian cryptocurrency investors, or 52% of them, have more than half of their assets invested in Crypto. Cryptocurrency became a popular alternative for Nigerians to store and transfer assets.
Monthly crypto transfers under $10,000 to and from Africa climbed by 55% in 2021, reaching $316 million.
Chainalysis predicts that these figures will continue to rise. In contrast to the CAR, other African nations like Nigeria, South Africa, and Kenya are heavily utilizing bitcoin for commercial purposes.
Not affected by price declines: Even though prices have fallen in 2022, cryptocurrencies still appeal to African investors as a type of asset because they offer a low barrier to entry for first-time investors who are now empowered by the falling cost of cell phones and mobile connectivity.
In contrast to other regions, one significant aspect of cryptocurrency’s emergence in Africa is that it is predominantly a grassroots phenomenon. Chainalysis data shows the continent accounts for a higher percentage of its total transaction volume (7%) than any other region, with the worldwide average only being 5.5%.
Peer-to-peer (P2P) systems like Paxful and Remitano, which are once again utilized more in Africa than anyplace else in the world, are particularly popular, which is of interest.
What you should know: For people who genuinely don’t comprehend this technology and or the risks associated with it, there is still this enormous black hole, and they are likely to continue falling victim to fraud and scams. Because of this, adequate regulation is crucial, particularly for African markets.
Africans acquired $105.6 billion in bitcoin between July 2020 and June 2021, according to a report by Chainalysis, demonstrating a 1,200% rise in the region’s cryptocurrency usage during that time.
Out of the $48 billion in expected remittances to Sub-Saharan Africa, the report estimated that $562 million in remittances were made possible by cryptocurrencies in 2019.
The number of cashless transactions in Africa is anticipated to rise by 78% until 2025 and then by 64% between 2025 and 2030, according to Strategy&, a consultancy division of PwC.
Given the vast—and expanding—range of options consumers have at their disposal, businesses will need to establish and sustain meaningful relationships with consumers given the abundance of potential that lies ahead. Like any marketing initiative, brands must convince customers of their value, work to sustain their loyalty and keep consumers at the heart of all they do.
Experts anticipate that cryptocurrency adoption in sub-Saharan Africa will increase as long as locals face problems that the technology has already shown it can address, such as protecting savings during periods of economic uncertainty and facilitating cross-border transactions in countries with strict capital controls, according to Chainalysis’ report.