Many people associate the African continent with poverty, diseases, and wildlife. Not many people think of blockchain technologies, cryptocurrencies & Co. And that is a huge mistake! Because Africa could profit from the crypto revolution immensely!
But not only that! Many African countries could bootstrap crypto mass adoption globally!
Nigeria: Africa’s hot spot of crypto mass adoption
One of the countries that bootstrap crypto mass adoption in Africa is Nigeria. In no other African country, cryptocurrencies are so widely adopted.
- the inflation rate was 17.75% in June 2021
- experts estimate that the unemployment rate will reach 32.5%
- corruption is still a problem
That said, people have to adopt cryptocurrencies. They have no other choice because their money is decreasing in value permanently.
Anthony Okafor is an adjunct professor of finance at the University of Louisville. According to him, the Nigerian Naira has depreciated by over 100% since 2015. So, Nigerians invest in crypto assets to escape inflation.
They invest in them to preserve wealth!
As a result, Nigeria is on the first rank by search interest for the keyword “Bitcoin” on Google.
Besides, Nigeria has a thriving developer community. E.g., Logiscool, a school for programming and coding, launched its first branch for kids and teenagers in Abuja, Nigeria.
But Nigeria has one problem! A regulatory problem!
In early 2021, Nigeria’s central bank has ordered all banks to report and close all accounts that have transacted with cryptocurrencies. And did this stop Nigerian’s appetite for digital assets? No!
Now, people mostly execute peer-to-peer trades or transact crypto assets directly to each other.
So, the government’s approach to banning cryptocurrencies wasn’t successful, and more innovation is taking place.
Kenya: how to start a fintech revolution in Africa!
A great example of how fast societies in Africa can adopt new technologies is M-Pesa. M-Pesa is a mobile payment service provider. People can transfer money back and forth by sending an SMS.
Launched in 2007, M-Pesa has become the largest mobile network operator in Kenya. And today, M-Pesa operates in several African countries such as Ghana, Lesotho, Tanzania, or DRC.
These types of developments repeat over and over again. Countries like Kenya, which are at a certain developmental stage, tend to skip some innovations. E.g., China skipped the era of credit cards almost entirely and bootstrapped mobile payments globally.
So, many African countries may skip the era of fintech and move directly towards decentralized payment methods that don’t require intermediaries: DeFi services!
Conclusion: how Africa will benefit from the crypto revolution
Blockchain Technology and cryptocurrencies could have a game-changing impact on the African continent. Cryptocurrencies like bitcoin can be a hedge against inflation and prevent corruption. And some African countries like Nigeria have thriving developer communities.
All in all: a bright future lies ahead for Africa!