The popularity of Bitcoin in Africa continues to grow, enabled by the presence of cryptocurrency exchange platforms. There are benefits to cryptocurrency ownership unique to the continent of Africa, many devolving from the widespread unstable economic conditions.
Owning and trading in cryptocurrencies is a trend on the rise in countries across the globe. The markets in the USA and Asia typically gain media traction, while the phenomena in Africa is left largely uncovered. While a large number of recognized exchanges don’t offer services in Africa, some recognize the significant marketplace that includes many Africans who do not have access to formal bank accounts.
One such platform is Paxful, which finds itself so popular in the region because of the multitude of ways cryptocurrencies can be purchased. The most popular way to buy currencies on the platform is in fact through iTunes gift cards. Africa holds two of the top three spots for countries using the Paxful platform, with the USA in the top spot followed by Nigeria, then Ghana. Paxful sees USD 40 million a month in buying and selling volume of Bitcoin in Africa.
What Bitcoin offers the region
In a continent racked by a history of economic insecurity, cryptocurrencies offer a way to hold assets safe from potential hyperinflation, with the possibility of substantial financial gains. The past two years have seen the Nigerian Naira (NGN) lose 90% of its value when compared to the USD and EUR, contrasting with the value of Bitcoin that increased 1,000% in 2017.
Nigeria applies limits of USD 100 per day on online purchases, so cryptocurrencies have become a popular way to circumvent these policies. However, the government of Nigeria is determinedly refuting the credibility of cryptocurrency usage, recently informing citizens to only patronize banking institutions that display the official governmental inscription in banking entrances and halls.
As well as the ability to avoid burdensome regulation, Bitcoin offers the chance for the African population to invest in ventures on an international scale. Through public token generation events or initial coin offerings, those living in Africa can invest in fintech start-ups using Bitcoin, for potentially huge gains. Rather than cutting off the region from cryptocurrency use such as the government of Nigeria is attempting, promotion of the industry could potentially benefit the local economy through profits reaped by local traders.
Globalization has arguably transpired at the cost of the African nation, which primarily exports raw materials rather than manufactured goods that hold the larger profit margin. Cryptocurrency is an opportunity for the citizens of Africa to enter the global marketplace, investing in entrepreneurial ventures on a scale previously inaccessible.
Although cryptocurrency isn’t a solution to all of Africa’s economic instabilities, it is a marketplace full of innovations that have the potential to diversify and better the economy of the continent.