Africa is witnessing a rapid growth of Cryptocurrency adoption in recent days. As per a research report, ten African countries, including South Africa, Kenya, Ghana, Nigeria, and Uganda, are frequent in the list of top 10 countries to search about Bitcoin in the Google search. Here we will know about the reasons that are leading the Crypto adoption in Africa.
Top 5 Reasons Of Strong Growth In Crypto Adoption In Africa
Here are the five reasons that play a huge role in the growth of Crypto adoption in Africa.
As we know, Cryptocurrency is decentralized. Any government has no authority over Cryptocurrencies. So, they fail to regulate it and also can not restrict the Cryptocurrencies that are owned by the country residents. If we check the financial history of Africa, we will notice an unstable financial state along with several cases of hyperinflation.
When South Sudan suffers an inflation rate of around 280%, on the other hand, Nigeria had inflation of only 15.37% in the year 2017. In order to avoid this critical situation, more African investors are attracted to Cryptocurrency. It is already proven that when it comes to inflation, Cryptocurrency can offer a relatively stable solution to the volatile local currency.
Lack Of Proper Banking System
The whole world is aware of the unbanked population of Africa. So, with unparalleled accessibility and added security, Cryptocurrencies are a proper alternative to traditional currencies. The simple payments system that Cryptocurrency offers is much more time-saving and seeks fewer resources in comparison to physical payments.
Digital banking also allows them to create credit history along with a digital financial footprint, which one can use to invest in business opportunities. If you want to get some idea about the unbanked African population, you can Visit here. You also can search for the banking system in Africa on the internet.
Africa is also famous for money laundering activities. Due to their decentralized and no governmental recognitions, Cryptocurrencies are becoming popular in money laundering. With the help of Blockchain, the transaction saves time and performs in a more efficient way. Plus, no additional charges are required for international transactions to be completed.
The Blockchain won’t allow any of the members to know the original identity of any members. One also won’t get any information on how much Cryptocurrency any member has. This anonymity of Blockchain or Cryptocurrency is attracting more people in Africa. And the adoption rate of Cryptocurrency is increasing gradually.
To Increase the Fiat Currency Value
Though the covid 19 pandemic has impacted the Cryptocurrency market along with the overall economic system of the whole world, even the economic status of the United States of America is also harmed by the coronavirus pandemic. However, the Cryptocurrency market has experienced some severe consequences, but by the end of 2020, the Crypto market has started to rise.
The price value of the most popular Cryptocurrency, Bitcoin, has crossed $40,000. By the third week of January 2021, the price value of Bitcoin manages to cross $42,000. So, with more Bitcoins, there is a chance of increasing the value of fiat currency and developing a more stable economic system. This is another reason behind the growth in Crypto adoption in African countries.
Around 30 million Africans are abroad for their working purposes. The enormous amount of cross border remittance has the ability to directly fuels the economic system. There are six African countries, 10% or more of their GDP depends on the remittance, where the rate is 3% for the other 3 countries.
Apart from supporting families, this amount also helps to set up businesses and supports its expansion. Plus cross border or international transactions with Cryptocurrencies are more secure and efficient in comparison to traditional banking transactions. It also costs less to send money overseas with Cryptocurrency. The World Bank, along with other leading international institutions, believes that trading with African countries can work as a catalyst for economic growth as well.
Though the rate of Crypto adoption in Africa is increasing, Africa does not have a proper technical set up for Cryptocurrencies. But with the growth of the popularity of Cryptocurrency, the day is not so far when Africa will start to lead the Crypto world.