Over the past year, Bitcoin adoption in Africa has grown by over 1,200%.
According to a report by blockchain analytics firm Chainalysis, Africa is the third-fastest growing Bitcoin economy globally. The increased crypto activity in the region has been fuelled by retail investors who turn to Bitcoin for savings, remittances, and peer-to-peer (P2P) trading.
Artur Schaback, COO and co-founder of P2P exchange Paxful, told Chainalysis that his platform had seen immense growth in African countries over the past year, notably 57% in Nigeria and over 300% in Kenya. In fact, Africa has the largest volume of P2P Bitcoin trading in the world due to banking restrictions from authorities.
African citizens have been able to bypass government restrictions on remittances and transfer funds across borders by purchasing Bitcoin through P2P markets.
Schaback also explained that Bitcoin allows African businesses to make international transactions more efficiently. They resort to P2P markets for purchasing Bitcoin and for paying for goods they wish to import, a more efficient way than using the traditional banking system.
If you’re working with a partner in China to import goods to sell in Nigeria or Kenya, it can be hard to send enough fiat currency to China to complete your purchases […] It’s often easier to just buy bitcoin locally on a P2P exchange and then send it to your partner.
Another use case that is fueling Bitcoin adoption in Africa is the continent’s hostile economic conditions, where fiat currency debasement is often the norm.
Meanwhile, the Nigerian government has decided to tackle rising Bitcoin awareness and usage in its jurisdiction by developing its own central bank digital currency (CBDC). Its citizens have not shown much interest in the e-naira project and might continue using the far superior Bitcoin, according to Adedeji Owonibi, CEO of blockchain consultancy firm Convexity.
Last week in a Clubhouse room of Nigerian crypto users, I asked the group if they would use the e-Naira when the central bank rolls it out […] The overwhelming majority of attendees said no because they expect it to have the same instability and management issues the Naira has today.