Despite socioeconomic and other headwinds, cryptocurrency adoption is increasing in Africa. KuCoin has released a positive report that shows crypto transactions have increased by as much as 2,670% by 2022.
This is an astonishing trend in growth. The steep influx is due to the low values observed in previous periods. About 2.8% of global volumes are made up of crypto transactions in Africa.
Johnny Lyu, KuCoin’s CEO, stated to Cointelegraph that “the acceptance of digital assets will continue to grow exponentially in Africa,” and that “African countries have a high crypto adoption rate, surpassing even the largest regions like the United States, Europe, and Asia.”
“Take a look at how cars, mobile phones, and consumer electronics took off across Africa. Africa is a continent that is known for its lightning-fast progress and rapid adoption.
The report mentions in particular that “more than 88.5 percent of all cryptocurrency transactions made by Africans are trans-border transfers.” Users pay less than 0.1% of the total amount of the transaction in cryptocurrencies.
Africa has high levels of inflation and a growing smartphone penetration, effectively allowing anyone with a smartphone to be their bank. It also has a young digitally-savvy population that is used to digital currencies. Africa is an excellent testing ground for cryptocurrencies.
Lyu added a cautionary note to the astonishing growth levels:
“The rate of growth will depend on the stances of both local policy-makers as well as separate officials on cryptocurrencies. However, I believe there is a bright future for digital money in Africa strong>
BTC adoption in Central and West Africa is increasing against the backdropof mistrust and discomfort with the CFA. Cointelegraph previously examined the state crypto adoption in Africa and noted that the “economic opportunities offered by the region is immense.”
Lyu believes that Africa is in a unique position because of the combination “growing inflation”, high unemployment rates and poor access to banking services, as well as huge fees for international payments, which creates an environment favorable to crypto adoption. Ultimately:
“The financial problems that the region is facing are forcing people into looking for new tools and technologies to give them some economic freedom.”
In the long-term, Africa hosts a wealth of advantages “which cannot but contribute to the widespread use of digital assets among locals.” The median age in Africa is very low at 19 years, with over 40% of its population living in urban areas.
“Another positive phenomena is the growing technological consciousness of the local population with many young people exploring internet technologies and programming.”