Crypto’s dominance across Africa shows no sign of abating

Crypto’s dominance across Africa shows no sign of abating

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

For example, the African blockchain landscape is currently attracting significant funding from prominent 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 boosting investor confidence.

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

Seychelles-based crypto 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 startup 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

Back in the fourth quarter of 2021, when the crypto market reached new heights, several crypto-centric awareness and education campaigns were launched across the African continent, the fruits of which have become increasingly evident in recent months.

For example, a group of distributed ledger technology (DLT) experts based from East and West Africa under the umbrella of Jelurida Africa launched the first-ever East Africa Blockchain Expedition to educate local people about the benefits and advancements in blockchain and crypto last year. Other organizations such as Emurgo Africa, the Cardano Foundation’s commercial wing, have also actively invested in a number of awareness and education programs to accelerate the widespread adoption of blockchain technology and cryptocurrency.

Thanks to these efforts, several mainstream businesses around the region have begun to integrate blockchain technology into their existing models, further contributing to its growing use. Nigerian digital payments company Interswitch and Senegalese fintech firm 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 the region’s startups and entrepreneurs using blockchain, AI and other emerging technologies.

In addition to venture capital interests, a growing number of Africans are adopting cryptocurrency as their source of payments, transfers and even savings. Overall, several African countries are experiencing an increase in crypto adoption as citizens 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, along with the increased use of smartphones and the internet. In its latest report, Finbold reported that Nigeria now ranks as the world’s most crypto-obsessed country, with a Google trending search score of 371.

Recently, the cryptocurrency exchange AAX commissioned a survey in collaboration with Forrester Consulting to assess the use of cryptocurrency in Africa, Latin America, Southeast Asia and the Middle East. According to the reports, the awareness and use of cryptocurrency, primarily bitcoin (BTC), is at an all-time high in these regions, with Africa leading the list.

Forrester Consulting’s survey highlights that the majority of African respondents have indicated that they use BTC as the preferred method of transferring funds domestically and internationally. Almost 46% of respondents noted that 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 crypto in Africa, Jelurida Africa’s CEO, Mr. Adebajo explains, “Most African governments are more interested in building local capacity. So if the plan is to get the attention of the government, more effort needs to be put into train developers from Africa. Although experience also matters a lot when implementing sophisticated solutions, this is where foreign developers will come in handy. When such a need arises, we will be willing to cooperate with foreign entities to realize the goals of the projects. »

“We have spent the last couple of months building prototype solutions across different fields. While we continue to engage the government and hold meetings and meetings, we also plan to hold a Pan African Hackathon in collaboration with some other major players in the space,” emphasizes Adebajo. “But most importantly, we plan to launch some major solutions specifically tailored for Africans before the end of the fourth quarter of 2022.”

Amidst this promising backdrop, crypto has transformed the African landscape, laying the groundwork for the future African blockchain ecosystem, while allowing local talent to connect with the brightest minds and resources of the wider crypto community.

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