Crypto dominance in Africa shows no signs of slowing down

Crypto dominance in Africa shows no signs of slowing down

Despite prevailing market conditions, cryptocurrency adoption, primarily in emerging economies, continues to grow unabated. This reality, in turn, is driving investor interest in these potential markets.

For example, the African blockchain landscape is currently attracting significant funding from major venture capital firms as well as angel investors. Recently, the Central African Republic (CAR), following in the footsteps of another emerging economy El Salvador, approved the use of bitcoin (BTC) as legal tender, further increasing investor confidence.

According to the latest Nation report, African blockchain startups raised approximately $304 million during the first and second quarters of 2022, nearly three times more than the total $127 million raised by startups in the region for all of 2021. The report further clarified that in the first three months of 2022, venture capital funds invested $91 million in various African crypto companies. In the second quarter, revenue grew by a staggering 134% to $213 million. This came at a time when the broader crypto market was stumbling due to the implosion of Terra, rising inflation, and ongoing geopolitical challenges.

Seychelles-based cryptocurrency exchange KuCoin raised $150 million, which has since been dubbed the “mega deal” for the African blockchain market. Pan-African crypto exchange Mara and Nigerian crypto firm raised $23 million and $10 million each, while Congo-based Jambo raised $30 million and South African exchange VALR raised $50 million.

Emerging economies love Bitcoin

In the fourth quarter of 2021, when the cryptocurrency market was reaching new highs, several cryptocurrency-focused educational and awareness campaigns were launched across the African continent, the fruits of which are becoming increasingly apparent in recent months.

For example, a group of distributed ledger technology (DLT) experts based in East and West Africa under the umbrella of Jelurida Africa launched the first East Africa Blockchain Expedition to educate locals on the benefits and advancements in blockchain and crypto. last year. Other organizations such as Emurgo Africa, the commercial wing of the Cardano Foundation, have also actively invested in a variety of educational and awareness programs to accelerate the widespread adoption of blockchain technology and cryptocurrencies.

Thanks to these efforts, several major companies in the region have begun to integrate blockchain technology into their existing models, further contributing to the growing adoption. Nigerian digital payments company Interswitch and Senegalese fintech company Wave are among the tech unicorns embracing the nascent technology. Another notable pan-African incubator project, Adrian Labs, has also entered the scene to support startups and entrepreneurs in the region using blockchain, AI, and other emerging technologies.

In addition to venture capital interest, an increasing number of Africans are adopting cryptocurrency as their go-to source for payments, transfers, and even savings. In general, several African countries are seeing a surge in cryptocurrency adoption as residents continue to battle regional challenges such as inflation and the devaluation of their local currencies.

Another reason behind the increased adoption is the growing number of tech-savvy young adults across the African region, coupled with the increased use of smartphones and the internet. In his latest report, Finbold reported that Nigeria now ranks as the most crypto-obsessed country in the world, with a Google trending search score of 371.

Cryptocurrency exchange AAX recently commissioned a survey in conjunction with Forrester Consulting to assess cryptocurrency adoption in Africa, Latin America, Southeast Asia, and the Middle East. Awareness and adoption of cryptocurrency, primarily bitcoin (BTC), is reportedly at its highest in these regions, with Africa leading the way.

The Forrester Consulting survey highlights that the majority of African respondents have indicated that they use BTC as the preferred method of transferring funds domestically and internationally. Nearly 46% of respondents said they use BTC to make payments and transfers, while 56% said they use it to preserve long-term value and 52% said they use it as an investment tool.

On the future of blockchain and cryptocurrencies in Africa, Jelurida Africa Director General Mr. Adebajo explains: “Most African governments are more interested in building local capacity. So if the plan is to draw the attention of the government, more efforts should be made to train developers within Africa. Although experience also matters a lot when implementing sophisticated solutions, this is where foreign developers would come in handy. When such a need arises, we will be willing to work with foreign entities to achieve the objectives of the projects.”

“We have spent the last few months prototyping solutions in various fields. As we continue to engage the government and hold meetings and meetups, we also plan to hold a Pan-African Hackathon in collaboration with some other big players in the space,” emphasizes Adebajo. “But most importantly, we plan to launch some great solutions specially designed for Africans before the end of the fourth quarter of 2022.”

Amidst this promising backdrop, cryptocurrencies have transformed the African landscape, laying the foundation for the African blockchain ecosystem of the future while also allowing local talent to connect with the brightest minds and resources in the world. broader crypto community.

Leave a Reply

Your email address will not be published.