Africa

The State of Cryptocurrency in Africa

On the global index of the acceptance of cryptocurrency by continents, Africa sits just a place away from the continent at the bottom, but the problem is that Antarctica is inhabitable. So Africa is in fact the continent with the least popularity of cryptocurrency. On the world scale, there are over 2000 cryptocurrencies and every single day, more coins are still being created. But only few of these currencies are in Africa, with the most popular ones being Bitcoin, Litecoin, Ripple, Ethereum and Dash.
If there is anything that has hindered the general acceptance of cryptocurrency in Africa, it has to be the volatility of the market. It can be generally said that changes in prices that the average American or European might not see as significant means a lot to an African. For example, a US dollar is an equivalent of 360naira (Nigerian).  During the first week of 2018, Bitcoin traded at $20,000 USD, and there were a lot of bullish prediction on this coin, with some self-acclaimed prophets predicting $75,000 in value. We all know what happened to Bitcoin about a week later. By the end of 2018, Bitcoin had experienced what is now called crypto winter, trading at %3,700 USD. All these figures are a lot of money for a continent with a lot of people living below a dollar per day. So yes, the mass cannot afford to put in money into cryptocurrency, and even if they could, the volatility of digital currencies scare them. But then again, who isn’t scared?
This does not mean that there is no prospect for digital currencies in the continent. As a matter of fact, some countries in the continent are working on owning cryptocurrency assets and Bitcoin ATMs are now in countries like South Africa. To get a clearer picture of the state of cryptocurrency in Africa, I will now proceed to analyze headlines that are currently making the rounds.

Africa Countries and Digital Currency

 
There are 54 countries in Africa. Out of these countries, South Africa and Swaziland are leading on the acceptance scale. South African seems to be ahead of every other country in terms of acceptance as it is the only country that has Bitcoin ATMs installed. Also, with its unrivalled technological advancement in relative to other African countries, the country is currently host to various cryptocurrency and blockchain start-up projects.
Senegal and Tunisia as sovereign states are recorded to be the earliest adopters of cryptocurrencies. In 2015, Tunisia started issuing the world’s first institutionalized digital currency; eDinar. Although the digital currency has not made the waves that it was expected to have, it is a proof that the government of the country, and the citizens as a whole are aware of the importance of digital currency. Senegal on the other hand issued eCFA in December 2016, a digital currency equivalent of CFA franc, the national currency of the country.
Most of the east countries in Africa seems to be on reserve. Rwanda for example is said to be carrying out research on the potentials of cryptocurrencies and how they could harness these potentials. But in general, most of the governments and central banks in Africa have so far taken the ‘wait and see’ stand as regards cryptocurrencies. It is almost like they are waiting for their European or America counterparts to experiment first before they can join the bandwagon. If there is anything we know Africa for, it is the fact that they do not like failure.

Africans and Digital Currency

 
Bitcoin is the most popular among Africans. It is said that cryptocurrency is not a term in Africa, they rather stick to Bitcoin as the generic name. Although the exact amount of holders of cryptocurrency cannot be ascertained, data from top exchange companies places it above three million holders. Out of these holders, South Africans and Nigeria are the leading holders.
There has been crypto projects that are targeting the unbaked in Africa, among many other projects like the healthcare crypto projects, logistics crypto projects and a whole lot more. If there was any reason why cryptocurrencies were appealing to Africans, it has to be the general perception that it was an unregulated cryptocurrency, totally independent and free from Government interference. But as it stands, the future of cryptocurrencies seems to be gearing towards regularizations by top exchange and security companies. However, this might not in any way affect the investors in Africa. The acceptance is on the rise, and the future looks bright.

Africa Citizens Continue with Massive Adaptation of Cryptocurrencies amidst Tax and Regulatory Issues

It is fascinating to notice that despite cryptocurrencies having been conceived far from the Africa continent, they are swiftly following the trends of Europe’s Malta into becoming a significant part of key cryptocurrency exchanges, tokens, and wallets. For instance, we can look at what happened in the recent past in Uganda, South Africa, and Kenya.
 

Uganda

 
Binance is a giant exchange which recently commenced a fiat-crypto exchange at the core of the country and registered more than 40,000 users within the first few months after launching. Before the exchange landed in the country, 70% of citizens in Uganda had difficult in banking the digital currencies because of the rigorous registration process. Now, excited cryptocurrency users in Uganda are thankful of Binance for making transactions of the system swift and easy to use.
 

South Africa

 
Despite the South African Reserve Bank (SARB) hindering the legalization of cryptocurrency tenders, recent studies revealed the spike in the demand of digital currencies among citizens as more users invest in the same. The trend has been spearheading with the enthusiasts of the sector including the founder of the Civic coin, Vinny Lingham who introduced South Africans to the possible breakthrough of digital currency and blockchain.
 

Kenya

 
Earlier this year, the Treasury Secretary in the country, Henry Rotich was issued with an ultimatum of two weeks to decide on the regulation of the cryptocurrencies. And despite not giving any updates to date, the finance CS acknowledged the increase of cryptocurrency activities in the country and indicated that the innovation had a significant impact on the financial sector.
 
During the first half of 2018, Sureremit which is an unregulated exchange raised $7 million through ICOs notwithstanding several other ATM bitcoin machines that have started operations in the country. More so, independent individuals such as the “roasted meat” trader in Nyeri, a town in Kenya reveals of currently using Bitcoin in the business.
 
Other countries currently running cryptocurrency ATMs include South Africa, Zimbabwe, and Djibouti. In Nigeria, the Central Bank has been reluctant in regulating cryptocurrencies, but key exchanges such as Luno have witnessed an increase of user base whereby more users are deciding to invest in the sector.
 

Bitcoin ATMs in Africa

 
Some time back, it was rare to find a cryptocurrency ATM in Africa, but currently, various countries have commenced making strides in establishing the facilities mainly for Bitcoin. The first ATM was set up in South Africa four years ago, and as of now, users of digital currencies across the continent particularly in Zimbabwe, Kenya, and Djibouti can enjoy several Bitcoin ATMs in various Cities.
 
General Bytes and Genesis Coin which lead in Bitcoin ATMs in the globe have contributed significantly in setting similar facilities in Africa. The process involves more than 30 manufacturers of Bitcoin ATMs which are currently run by over 400 operators. The cryptocurrencies ATMs are increasing in demand, and it’s the matter of time before other countries such as Nigeria and Ghana follow suit.  
 

African Bitcoin Exchanges

 
At present, Africa has several exchanges that offer users with the opportunity to trade in cryptocurrencies while using the local currencies. Luno, NairaEx, Ice3X, and Golix are the most established and the longest-standing exchanges in the continent, and since the beginning of 2017, other exchanges such as Remitano, CoinDirect, and Belfrics saw a fertile ground and launched activities in the continent.
 

Spreading of Cryptocurrency

 
The idea of governments in Africa not regulating cryptocurrencies may have spurred the growth of the same, but with the current trend, there is no guarantee that the authorities will not change their mind.
 
For instance, alarmed with the fall of the banking sector or arbitrary finance appropriation by the governments, citizens who cannot access to banks in the continent and who dwell in politically unstable countries have high chances of choosing cryptocurrencies.
 

Cryptocurrency/Blockchain in Africa

 
Despite some progress in digital currency awareness and adoption in Africa, the majority of people in the continent still view it with anxiety. However, it might pick up with more user experience and awareness on the same. Social media is offering cryptocurrencies a huge shot with various articles and videos depicting flourishing users of the technology. There is also adequate information online about cryptocurrency and blockchain and how to invest and trade fruitfully in the field.
 

The Future of Blockchain/ Cryptocurrency in Africa

 
The cryptocurrency market in Africa is set to open up. The continent has big potential with the big number of users currently switching off from the traditional financial services to cryptocurrency sector which provides huge returns quickly.