Africa is seldom found on a list of the biggest markets for practically any product. Interestingly, the unique combination of decades-long economic instability and the low penetration rate of high-end tech has resulted in the continent ranking among the largest markets in the virtual currencies space.
The surge in demand for virtual assets on the continent has been identified as a possible new frontier for the burgeoning virtual assets economy by the United Nations, among various other organizations, who noted high trading volumes in a number of nations on the continent in an article published on their website published mid-2018. A report by Ibinex – dated September 2018 – also casts a kind eye on blockchain and virtual currencies advancements on the continent, while outlining potential hurdles.
Global peer-to-peer exchange, LocalBitcoins, has reported record-breaking trading volumes in several African markets, particularly South Africa and Kenya. While another cryptocurrency exchange platform, Paxful, stated that transaction volumes in Africa have risen 130% on their network, during 2018.
A Changing Tide?
It appears as though the fact that Africa has lagged behind the rest of the world, not just economically, but with regard to the adoption of sophisticated technology – owing to little-to-no infrastructural development – has culminated in several territories on the continent leading the charge in global digital asset adoption.
On a continent where the cellphone is the primary mode of access to the internet for many, and traditional banking struggles to establish a significant foothold, cryptocurrencies have slotted perfectly into a market gap. Virtual currencies offer many Africans a chance to exchange and store value, not just more conveniently, speedily, and securely than banks, but also enable lower tax bracket individuals to participate.
Digital currencies so fit the unique needs of the everyday African that Google Trends – which has become a good indicator of crypto demand – has seen a steady uptick in cryptocurrency-related web searches originating from the continent. South Africa, Nigeria, and Ghana have at times generated more searches than Singapore (A prominent global crypto and blockchain hub).
The Question Of Access
“If Africans are to benefit from the cryptocurrency revolution we need to make it easier to buy, store and trade cryptocurrencies. As Africans, it is our responsibility to help build the infrastructure and we need to be a part of the revolution.” – Stephen Young, Co-founder of South Africa-based virtual currency exchange, in a conversation with Forbes. 9th July 2018.
As evidenced by the high premiums on digital currencies on Africa-based exchanges in comparison to international exchanges, the demand for these assets has reached a veritable fever pitch continent-wide. Access to this emerging asset class, however, still remains tricky for a large number of the population.
Barred by a lack of information and, in some cases, skeptical governmental reception, many interested Africans battles to get their hands on cryptocurrencies. Efforts by virtual currency exchanges operating on the continent; Coindirect, Luno, LocalBitcoins, Paxful, iCE3x, Belfirics, Reminato, and others can only go as far as the financial regulators in various territories will allow.
“Cryptocurrencies have to be regulated. It is not a question of if, but when…We will expand as quickly as the people around us want us to do it.”- Brian Ngugi, Founder of Kenya-based exchange, Pesamil.
It goes without saying, that if regulators, were to take a more accepting stance on cryptocurrencies and move to protect users from bad actors, cryptocurrency use on the continent, would likely surge on the back of digital asset investors on the continent moving into the crypto space more confidently. The global regulatory dynamo effect on cryptocurrencies has yet to make landfall on the continent, though news points to it being imminent.
This article by Ash Bonga was originally published on QBITtimes.com
Featured Image Credits: Pixabay