Why crypto is thriving in Sub-Saharan Africa: Chainalysis Study

A new report from blockchaindata company Chainanalysis shows strong crypto adoption and adoption rate in Sub-Saharan Africa. With highly educated young people and low job prospects, cryptocurrencies are a way to feed their families.

The crypto market in Sub-Saharan Africa is different from the rest of the world in terms of crypto usage. huhThe continent is home to some of the most advanced crypto ecosystems.

What do Africans use crypto for?

The report also highlights how peer to peer (P2P) transoms are more common in Sub-Saharan Africa than anywhere else in the world. According to reports, the region records the highest number of cryptocurrency transactions via P2P.

Small retail payments drive exceptional crypto adoption and use, with the region making the highest percentage (80%) of crypto retail payments under $1,000.

Many Africans have integrated crypto into everyday life, the report said. In addition to retail transactions, wire transfers and commercial transactions have also been important factors in Africa’s high adoption and usage rates.

Crypto Matters in Sub-Saharan Africa

In Africa, cryptocurrencies are embraced for several reasons. A major challenge is the volatile value of local African currencies. Kenya and Nigeria are in the top 20 countries with high crypto adoption worldwide.

“Crypto use is driven by everyday necessity as opposed to speculation by the already wealthy…especially in countries where the value of local fiat currencies is falling, as we have seen in Nigeria and Kenya,”

The local currencies have depreciated significantly against the US dollar and other foreign currencies such as the euro and the British pound. However, the decline in exchange rates has no direct impact on crypto holders, which could be a reason for the massive adoption of crypto.

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Strict regulations make it nearly impossible to buy digital assets by wire transfer from a bank account. As a result, crypto users have become dependent on P2P transactions, which have continued to grow and strengthen the entire global crypto ecosystem.

There is also a general reliance on wire transfers from other regions, including the US and Europe. These transfers are often sent in crypto to avoid delays and friction.

The future for crypto in Africa

Chainalysis expects crypto use in Sub-Saharan Africa to increase as long as regulations, economic volatility and the need for cross-border transactions continue.

Ideally, the high rate of development within African countries could lead to a more extensive crypto ecosystem in the near future. The market is more open to new concepts and ideas than the relatively reserved western market. This would allow the African continent to easily boost the adoption of cryptocurrencies within governments and everyday life.

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