Africans are increasingly going digital as the continent undergoes a period of sustained interest in Bitcoin and other cryptocurrencies, according to Finance Magnates.
There are many reasons why Africans are beginning to turn to cryptocurrencies rather than traditional currencies. Many nationals fall foul of inflation and hyperinflation, resulting in weak and unstable financial systems. Recently, countries such as Zimbabwe, South Sudan, and oil-rich Nigeria have all suffered, many of these countries with inflation rates well into the hundreds of percentages. In these situations, it is hardly surprising that populations look to a more stable form of monetary solution in their daily lives.
The increase of technology is another contributory factor of Africa’s progression towards cryptocurrency adoption, with mobile phones now widely used across the continent, and computers becoming more a part of people daily lives, making the internet totally accessible in areas which are well serviced with providers.
Government regulation has done much to aid the crypto movement in Africa. While nations around the world are embroiled in putting crypto under the microscope, searching for ways to regulate and control the space, Africa as a whole has largely been immune from such a rigorous period of investigation and rule-making around this aspect of financial control. African exchanges have been the beneficiaries of this far more laid back to approach to government regulation.
The result is emerging blockchain developers and new cryptocurrency exchanges. Kenya-based BitPesa, a payment and transfer platform, now has 60 banks working with the company and seven mobile wallets. Another platform, Paxful, claims that African customers account for almost USD 7.5 million in transactions monthly with half of their clients being educated millennials.
Ray Youssef, co-founder and CEO of Paxful, suggests Africans have been clever in dealing with financial barriers in some of these countries:
“The people of Africa were educating us. It really wasn’t just Bitcoin and Paxful–it was peer-to-peer finance. These folks were finding ways around all their barriers–whether foreign or domestic–using peer-to-peer finance… The same thing that Uber did for transportation and Airbnb did for hospitality, peer-to-peer financial marketplaces are doing for finance.”
Youssef illustrated the African enthusiasm for crypto, describing an encounter he had with a woman who wanted to spend her last USD 20 to buy Bitcoin. She had no bank, no cards, quite typical of many Africans, but was quite happy to be guided towards a gift card and a local trader.
“I walked her through the whole transaction. That was a real eye-opener for me,” Youssef explained. “You know, us crypto-geeks think ‘oh, Bitcoin is so easy… Coinbase isn’t going to help out someone like that’.”
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