Being the second-largest continent in the world and the second-most populated after Asia, it’s no surprise to see that Africa has been called the last investment frontier.
With massive swathes of land, plentiful natural resources and a huge population, Africa teems with potential.
From colonials to empire builders and warlords, the African continent has suffered tremendously over the years and split the continent into a confluence of nearly 60 countries spread out all over.
Despite all of this, the African nations have soldiered on despite the challenges faced by them. One of the more surprising developments is the surprising rates of which cryptocurrency has been adopted in Africa.
This however should come as no surprise given the forces at play on the African continent. In this article, we’ll take a look at some of the factors behind the rise of cryptocurrency in Africa.
1. An underdeveloped finance sector
Financial services all across Africa have traditionally been underdeveloped. Endemic corruption and huge distances mean that providing financial services remains a challenge on the continent.
Because of this, mobile financial services have exploded all over the continent. By providing Africans with the means to transfer and receive funds, fintech technology is literally building the foundation of financial services in Africa.
Smart devices have changed the way we think about information and technology. Now anyone with a smart device and an internet connection will be able to access information and communicate with others on a scale like never before.
Thanks to increased smart device penetration and the availability of mobile data, cryptocurrencies like Bitcoin have exploded in popularity all over the continent. This can be attributed to Bitcoin’s ability to seamless transfer funds across borders with minimal fuss (or fees).
As cryptos can be transferred and received by anyone with just an e-wallet and an internet connection, it can easily be seen why Africans prefer to make use of cryptocurrencies.
2. Cryptocurrencies are unaffected by governments
Decades of endemic corruption have ravaged the economies of many African nations and Zimbabwe is no exception. Under the erratic rule of Robert Mugabe, Zimbabwe’s economy suffered from hyperinflation due to a combination of high national debt, poor economic control and a weak government.
This led to the creation of poverty billionaires and the printing of the world’s first $100 trillion note. Citizens were forced to revert to a barter economy or make use of foreign currencies such as the US Dollar.
When the Zimbabwean government banned the use of foreign currencies, citizens turned to cryptocurrencies as an alternative medium of exchange. Being entirely digital, government authorities could not regulate the use of Bitcoins and other cryptocurrencies.
As a result, other African nations similarly followed suit and began making use of cryptocurrencies to process payments – a situation that explains why cryptocurrencies have such a huge role to play in Africa.
3. Africa’s youth factor
Nigeria has long been regarded as one of Africa’s most tech-centric countries – something that can be seen from the nation’s high adoption rates of cryptocurrency. This coupled with a strong entrepreneurial culture has pushed Nigeria’s youth to seek their fortunes overseas.
As cryptocurrencies are able to facilitate the seamless transfer of overseas payments, many Nigerian entrepreneurs have been quick to adopt cryptocurrencies.
This is due in part to Paypal’s restrictions on money transfers into Nigeria as a result of the number of scams originating from the country. While it is unfair to typecast Nigerians as scammers, Paypal is adamant on their position.
As cryptocurrency e-wallets have no such restrictions, they have allowed Nigerian freelancers to work with overseas clients and receive payments in the cryptocurrency of their choice. You can try Tezro, an Online Crypto Wallet App that will suit your needs.
As can be seen from the points above, Africa is likely to be the next hotspot for the cryptocurrency revolution. With a huge population and plentiful resources, the possibilities for crypto in this market are endless.