Are you looking for a new crypto market to invest in? Well, you might consider checking a few markets in Africa. The African crypto market has been booming. More people were adopting technology now more than ever.
The total number of transfers under $10,000 in Africa increased by 55 percent in the last year. This is according to research by Chainalayasis, a blockchain market intelligence firm. Reportedly, as of September 2020, the number of monthly crypto transfers to and from Africa has surpassed the 600,000 marks. In June 2020 alone, Nigeria, South Africa, and Kenya transacted an almost $1 Billion worth of crypto.
Why a boom in Africa? Many factors support crypto adoption in the region. Young, tech-savvy populations have quickly adapted to bitcoin. The de facto currency of global trade, weaker local currencies that make it harder to get dollars. The complex bureaucracy that complicates money transfers has also contributed to this.
Nigeria: Crypto hotspot
Nigeria currently ranks as the most significant Bitcoin trading market in Africa. The country is among the fastest-growing crypto markets across the globe, as reported by Blockchain.com. In a different report by Google Trends, Nigeria was reportedly the leading country in Bitcoin interest in mid-2020.
Nigeria has had more peer to peer transactions in 2020. This is according to recent reports by Usefultulips, a Bitcoin analytic data provider. According to the report, Nigeria records a volume of about $8 million weekly on peer to peer transactions. South Africa and Kenya have recorded $2 million worth of the weekly transactions.
Some have attributed the surge to the recent crypto regulations by the Securities and Exchange Commission of Nigeria. The news was received with excitement by the cryptocurrency community. Chimezie Chuta, Founder, Blockchain Nigeria User Group, stated:
“SEC Nigeria has consistently shown that it has a clear understanding of her role in creating a conducive environment for the growth and development of Virtual Financial Assets, and Cryptocurrencies in general. This recent publication will act as a catalyst for mass adoption. It will also create much needed institutional investor confidence for the Nigeria Capital Market.”
The Nigerian SEC explained that the regulations are intended to protect the investors and promote transparency within the market. The regulators hope to use these guidelines to create standards that encourage ethics. The authority explained that these regulations would not hinder technology or, in any way, stifle innovation.
The regulations have not been implemented yet but regulating cryptocurrencies seems to represent a shift in the country’s attitude toward cryptocurrencies. It is not yet clear when these regulations will be implemented. But cryptocurrencies will be classified as securities from the official statements. Back in 2018, the Central Bank of Nigeria had declared Bitcoin, Monero, Litecoin, Dogecoin, and Ripple were not regarded as money.
South Africa and Crypto Regulations
In the last five years, South Africa has emerged as one of Africa’s leading crypto adopters. About 13% of internet users in South Africa own or use cryptocurrencies. The country was recently ranked among the top three countries globally, where crypto is most likely used.
In April 2020, regulators in South Africa together with the South African Reserve Bank, took their first steps in creating cryptocurrency laws by publishing a framework proposal. The authorities released a policy paper with 30 recommendations for regulations of cryptocurrencies and their related activities. The recommendations comply with the Financial Action Taskforce standards, the global money laundering, and terrorist financing watchdog.
Last month, there were rumors that the South African Revenue Service (SARS) planned to bring striker taxes to regulate the cryptocurrency community.
Marius Reitz, Luno’s general manager for Africa, explained that the hasty, heavy-handed regulation could crush innovation within the sector.
“What we’d like to see is a phased approach. It can be very easy for regulators to want to regulate the entire industry from the onset but it could stifle innovation. Once governments regulate better, there’s more chance of opening up integration with traditional financial infrastructure and there would be more mass adoption as well,” he said
African Women and Cryptocurrencies
The COVID 19 pandemic has brought different effects across the globe. For young women in Africa, the pandemic was an eye-opener. It has forced many to look for alternative assets as global markets plummet threatened their investments.
According to Paxful, a peer-to-peer bitcoin marketplace, there has been a growth of young African women using bitcoin. They rely on bitcoin peer to peer to power their business since the beginning of this year. Paxful explained that since it began Paxful Peer Program, an entrepreneurship program last November, many women became enthusiastic about becoming their bosses.
Tugba Abadan, Paxful’s newly appointed Head of MEA, said:
“Our sector can still do better to attract more female blockchain professionals and entrepreneurs. At Paxful, nearly 40% of our global workforce is female. We continuously keep our eyes out for more female collaborators, community builders, and problem solvers.”
According to data from CoinMarketCap, there has been a significant growth of women participating in the cryptocurrency industry. The number rose by 43.24% in the first quarter of 2020. This was a 13% increase from figures seen in 2018. Particularly, the increased adoption was for women aged between 18- 24 years.
Victoria Chauke, a student at Johannesburg’s Wits University, who has a bitcoin side-hustle to earn some extra cash, says,
“Trading bitcoin was a better option for me as I could learn on the go; it’s much more flexible as I can make money while at home, in-between classes, or while busy with other commitments. I believe we need a lot more women in the bitcoin community”.
Another, Yvonne Kagondu, Paxful’s Community Coordinator in Kenya, says:
“It’s not easy to be a young African at the moment. Unfortunately, many of us suffer the consequences of unemployment and poverty. It’s very important to be on the lookout for as many opportunities as possible and find one that suits you best.”
While the numbers are lower than in other regions globally, many believe this new trend will continue in the coming days.