The adoption of cryptocurrencies in the African region has grown exponentially since 2020, according to the blockchain analyst firm.
Analyst firm Blockchain Chainalysis reported that Africa saw a bullish cryptocurrency market last year. The company revealed that the African cryptocurrency market saw a 1,200% increase in value between July 2020 and June 2021. This increase was driven by peer-to-peer trading, the suitability of cryptocurrency as a store of value and its use to facilitate trade. shipments. The latest numbers rank the continent third among the fastest growing Bitcoin economies worldwide.
The report, released on Tuesday, also highlighted that the volume of transactions with African countries in the same period was about $105.6 billion. He further revealed that certain African countries saw high numbers in base cryptocurrency adoption, with Kenya, Nigeria and South Africa ranking in the top 20 of the Chainalysis Global Crypto Adoption Index.
Africa was also reported to have the largest share of retail-scale transactions, with 7% of total crypto transactions being of this nature, compared to the global average of 5.5%. P2P commerce has been one of the most significant drivers of the burgeoning crypto space in Africa, with the world's two largest P2P commerce platforms registering substantial growth in the region during this period.
The continent stands out in the domain of P2P transactions, surpassing all others. Of the total transaction volume, 1.2% was attributed to P2P trading and a significant 2.6% of all Bitcoin transactions are based on P2P.
Cryptocurrency users in Africa are switching to P2P commerce primarily due to government restrictions. Many banks in the region do not allow users to transfer money from their accounts to their crypto wallets. However, the decentralization of P2P makes it possible to circumvent this obstacle.
Artur Schaback, the co-founder of Paxful, noted the 57% and 300% growth his platform had last year in Nigeria and Kenya, respectively. Adedeji Owonibi, CEO of Convexity, a Nigerian blockchain solutions company, told Chainalysis how the lack of banks facilitating crypto transactions has boosted the popularity of P2P options.
" Binance used to be the most popular platform by far, but after the central bank's sanction, many are switching to P2P platforms such as Paxful and Remitano."
Owonibi also pointed out that a significant part of P2P transactions takes place on informal platforms, such as messaging applications. This could mean that the prevalence of P2P in Africa may be even higher than you think.
“Informal P2P commerce is huge in Nigeria on WhatsApp and Telegram.
More African governments are now trying to play the blockchain game, although they were cautious before.