A new report analyses the status quo of cryptocurrencies in Africa. According to the report, Bitcoin and Co. are enjoying growing popularity on the continent – but the road to mass adaptation is also a rocky one in Africa.
Africa has what it takes to become a crypto-continent: At least that is what a report by the analysis company Arcane Research suggests. According to the report, Africa is an ideal breeding ground for cryptocurrencies – especially with regard to the use case of cross-border transfers.
While elsewhere the main focus has been on investment, speculation and trade, Africa has a greater need for cryptocurrencies than any other continent
No wonder then that peer-to-peer currencies like Bitcoin are becoming increasingly popular in Africa. According to the report, South Africa has the most hodlers; 13 percent of Internet users between the ages of 16 and 64 hold cryptocurrencies. Nigeria follows with 11 percent. It is possible that South Africa and Nigeria could change places in the foreseeable future: Nigeria has seen a steep increase in Bitcoin trading on the localbitcoins platform since the spring. The localbitcoins competitor Paxful is also one of the larger crypto players active on the continent. In early May, the Bitcoin exchange platform launched a corona donation campaign for Africa.
Fragmentary infrastructure makes Bitcoin adoption difficult
The above-average interest in Bitcoin is offset by a technological infrastructure that still has considerable room for improvement. According to Arcane Research, only 39 percent of Africans have access to the World Wide Web, in contrast to 63 percent of the rest of the world’s population.
According to the report, Africa also lags behind the rest of the world in terms of the spread of Internet-enabled end devices. According to the report, only 39 percent of people in the Southern Sahara region will use a smartphone in 2018. Nevertheless, this proportion is expected to rise to 66 percent by 2026. Although Bitcoin can also be transferred without the Internet – the easiest way is and remains the Mobile Wallet. One possible method of filling the gaps in network coverage is seen in the StarLink project of SpaceX.
Further investment is therefore needed to enable Africa to exploit its potential as „the most promising region for the introduction of cryptocurrencies. Then the continent could show what Bitcoin and Co. can do – also due to its demographic structure with many young people.
However, not all hurdles are of a technical nature. The question of regulating Bitcoin and the crypto-sector is also still unresolved for a large part of the continent:
The legality of Bitcoin and other crypto assets varies widely across the region, with over 60 percent of African governments still needing to clarify their position. While this uncertainty is not an absolute barrier, it is an obstacle to the speed of adaptation.