Cryptocurrencies have made a huge impact in the world since 2009 and very few would claim not to know what cryptocurrencies are. As of 2021, the estimated global crypto ownership rates were at an average of 3.9%, with over 300 million crypto users worldwide, this shows just how much the world has received cryptos.
Africa is undergoing an economic revolution with cryptocurrency at the heart of this revolution, it is important to note that cryptocurrencies are not there to kill central banks, but there are there as an alternative and people have seen the potential in cryptocurrencies.
Amongst the developing economies, Africa is the fastest-growing cryptocurrency market, it is also the third-fastest growing market in the world. In Africa the use of fiat cash has declined in major economies as consumers are adopting electronic payment methods such as Lipa Na M-PESA, credit cards and payment gateways and the availability of electronic payment methods has made cryptocurrencies to be easily accepted because the idea is quite similar.
Clearly, cryptocurrencies are very popular in Africa and there has to be a reasonable explanation why it is so, this article seeks to explain some of the reasons why cryptocurrencies are popular in Africa.
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Why are cryptocurrencies so popular in Africa?
No need for infrastructure
Africa has always had an infrastructure problem, the likes of South Africa and Egypt are the few African countries with sound infrastructure, the rest of Africa have a challenge in this regard. Having poor infrastructure has made financial services less accessible and this is where cryptocurrencies become an extremely good alternative to traditional banking in Africa because it is mostly an online based industry and users are only required to have a smartphone to to access blockchain networks.
Cryptocurrencies transfers are relatively cheaper
It is not a secret that banks are quite expensive and you will be charged for every transaction you make, well, there are some rich folks who do not mind the charges, but this is a real issue in Africa and that is why many people are turning to cryptocurrencies because P2P cryptocurrencies exchanges like Paxful and Coinbase amongst others like Valr, aim to cut out the middlemen, such as credit card companies or banks, making it cheaper to transfer money from one virtual wallet to another.
Africans in the diaspora have seen the advantages of cryptocurrencies because they are able to send remittances across borders more cheaply.
Avoiding currency instability
Africa has some of the most unstable economies in the world, countries like Zimbabwe continue to struggle with hyperinflation and it becomes very risky to store your money in the local currency of such an unstable economy. In the year 2015, the Zimbabwean dollar skyrocketed in 2015 and several people turned to trade in cryptocurrency to avoid losing it all.
Cryptocurrencies are accessible to anyone as long as they have a computer or smartphone and an internet connection. You can set up a cryptocurrency wallet quickly compared to opening an account at a traditional financial institution. Using cryptocurrency can allow people who don’t use traditional banking services to easily make online transactions or send money to loved ones.