According to a study by Chainalysis, Africa’s cryptocurrency economy grew by 1200% between July 2020 and June 2021. The value of transactions was estimated to be US$105.6 billion during that period.
This makes Africa the third fastest-growing crypto-economy globally which is pretty surprising judging from regulators on the continent not unanimously welcoming alternative currencies with open arms. The story in Zimbabwe remains the same as the RBZ is still stone-faced when anything concerning cryptos is even remotely mentioned.
Earlier this year we saw the Central Bank of Nigeria pull an RBZ by telling all traditional financial institutions in the country not to trade with crypto exchanges. The reason for the Nigerian Central Bank taking this stance was because the #EndSARS protests were raising considerable amounts of money through Bitcoin donations.
The only way the authorities over there could stem the tide of the movement was, as it always is in Africa, through regulation. Even in progressive South Africa, we have seen the authorities there take the odd stance of banning locals from trading Bitcoin and other cryptocurrencies across borders.
However, even with all of this pressure, Africans have not been deterred and P2P transactions have been the order of the day. According to the study by Chainalysis Nigeria, Kenya, Uganda, South Africa and Ghana lead the way. Enthusiasts have been using platforms like Paxful to skirt the traditional financial system and central bank regulations.
The study also found that Africans are using cryptocurrencies as a form of savings because of local currencies losing their value. Chainalysis noted that in Nigeria, P2P trading increased when the value of the local currency took a tumble.
The same phenomenon was observed in Kenya as well… It appears that central banks in Africa are better served by setting up conducive cryptocurrency frameworks rather than repressing their use. This would most certainly stem the flow of crypto-scams which are a greater threat than alternative currencies.