Africa has several countries in its landmass that are increasingly turning to cryptocurrency. Interest has peaked on social platforms, with businesses now using it to fund cross-border payments. We discuss Africa’s interests in cryptocurrency and the blockchain in the following article.
A recent study has revealed that interest in cryptocurrency has risen by 189% in the space of a year. This has been measured between January 2023 and August 2024 and has been on the Telegram messaging service. It has been characterized by people joining cryptocurrency-based groups.
Interest in Crypto Surging in Africa
Even more interesting is the demographic of the users, with around 56% of them being under the age of 25. This is in contrast to many other countries, where millenials in the 28 to 43 age group represent the largest cryptocurrency user group. This also aligns perfectly with the main demographic of the Telegram messaging service.
Telegram has become extremely popular among cryptocurrency traders. Due to its privacy, anonymity, and ability to create groups and channels, it is much more attractive to those investing in cryptocurrency than other platforms like Facebook. However, this strength is also its biggest weakness, as it is also a haven for scammers.
Why Crypto Works for African Youth
There is now £1.8 trillion worth of cryptocurrency on blockchains and in wallets across the digital ecosphere. In developing nations like many found in Africa, where poverty levels are high, this is an attractive prospect. That is the first reason cryptocurrency is attracting the youth there.
The next is that the traditional financial institutions of countries there are not as robust as they are elsewhere in the world. Banking services often have limited access and function against backdrops of economic instability. Cryptocurrency security and speedy transactions are evident bonuses. It can also work as a hedge against inflation in countries where prices are rising rapidly.
In a country where the youth are turning to mobile devices as primary forms of communication, entertainment, and finance, cryptocurrency is another great solution. Mobile adoption rates in Africa are growing due to network connectivity and internet structure. This is easy to see in its increased use of messaging services like Telegram.
It is not just Africa where this is evident, and it seems to be a recent trend across emerging economies. Eastern Europe is one such front. In Ukraine, for example, it is estimated that the user base will reach 34 million users by 2025.
Nigerian Adoption Rates
A quick glance over the top countries for adoption rates shows a host of African economies included, most notably those centered around sub-Saharan Africa. South Africa is just in the top thirty, with Kenya at 28 and Ethiopia at 26. However, leading the charge is Nigeria coming in 2nd in the poll.
One use of cryptocurrency on the continent is through stablecoins. This is a cryptocurrency that is typically pegged to the value of a commodity or currency. In an area of the world where USD are scarce, then coins like USDT and USDC have mass appeal. They allow companies to trade across borders, store value, and pay for imports with the worries of a fluctuating currency at home.
All of this has been exasperated by an FX shortage in the continent, with around 70% struggling to exchange money. This has made it hard for businesses to grow, do business with foreign investors, and crucially, function in their everyday operations. Ethiopia, with its huge and growing population, saw the biggest growth for stablecoin use in retail purchases, accounting for 180% of growth year upon year.
Blockchain Use in Property
It is not just businesses that are interested in the use of cryptocurrency and the blockchain to revolutionize services either. Nigeria has turned to it as a solution for its increasing problems with land registry.
Over the next 18 months, a consortium of local technology firms in Lagos, partnered with the government, are aiming to tokenize real estate properties. Physical assets, like land, will be converted into digital form on the blockchain. This will create an immuntable register for authorities to use and facilitate the transfer of deeds and property.
There are two main reasons for this. The first is that the country has a huge backlog of title deeds that it must register. This takes time and effort. The second is that land fraud is rife in the country. Due to its chequered history, who owns land can often be unclear. Poor record-keeping and databases also make it easy to fraudulently take land from others.
These changes signify one thing: Africa is undergoing a digital revolution. Its businesses, but crucially its youth on apps like Telegram, are turning to cryptocurrency to circumvent the problems with the country’s financial systems. In turn, the government is using it to deal with administrative and social injustices. Africa could soon create fully digital states, and that will only push up the value of cryptocurrencies.