Cryptocurrencies are fast entering the mainstream world of finance and business, and are slowly gaining acceptance as a legitimate form of value, even if the stated aim of replacing traditional currency is a long way away. In this regard, it is a little surprising, but extremely encouraging to note the progress that cryptocurrencies are making in Africa. Within Africa, it is Nigeria that is leading the crypto conversion wave.
At present, Nigeria leads the rest of the continent in the use of Bitcoin. In fact, the volume of Bitcoin transactions in Nigeria is more than the rest of Africa combined, so it is no surprise to see that some of the leading crypto brands, such as Bfinance, Paxful, FTX, Crypto.com have begun to enter Nigeria. In terms of peer to peer lending (P2P), Nigeria led the rest of Africa for the month of October 2020, posting P2P volumes of over $32 million, while South Africa, in second place, had only $9 million, followed by Kenya with $7.4 million.
One of the biggest reasons for the wave of crypto in Nigeria is the country’s demographics. Nearly 32% of the country’s population can be classified as part of the youth, which means that there is a ready market of people who are comfortable using technology and are also up to date with regard to economic trends. The naira has been susceptible to high inflation in recent years, so people are choosing to invest and save their money in bitcoin and other cryptocurrencies to better protect their value.
Another area where cryptocurrency has very high potential is in online casinos. Gambling is a very popular activity all across Africa, and especially in Nigeria, specifically sports betting.
Bucking the trend with regard to online transfers, most cryptocurrency transfers to and from African countries are under $10,000 in value. While crypto assets are being generally used by large corporations and financial traders globally, Africans are using it for daily activities and commerce, with individuals and small businesses accounting for the majority of these transactions.