Digital analytics firm Chainalysis has reported that Africa's cryptocurrency market has grown significantly since last year, with the region accounting for a larger share of total retail transactions compared to the global average.
In a report published on Tuesday, Chainalysis said , the African cryptocurrency market appreciated by more than 1,200% between July 2020 and June 2021, with high adoption in Kenya, South Africa, Nigeria and Tanzania. The firm added that the popularity of P2P platforms may have been one of the factors driving greater cryptocurrency adoption in the region, given that some countries have restricted or prohibited residents from sending money to exchanges through local banks.
According to Chainalysis, the entire continent received $105.6 billion worth of cryptocurrencies between July 2020 and June 2021. However, its share of total market transactions consisted of "retail-sized transfers" larger than any other region in the world - around 7% as opposed to the global average of 5.5%. In addition, P2P platforms - including Paxful and LocalBitcoins - account for 1.2% of all crypto transactions in Africa.
"In many of these frontier markets, people can't send money from their bank accounts to a centralized exchange, so they rely on P2P," - said Paxful co-founder and COO Arthur Schaback. "Crypto products are becoming more user-friendly, so they can introduce more people to the crypto economy and help them see that crypto is faster, cheaper and more convenient."
Other drivers of cryptocurrency adoption in the region may include remittances as a way to get around governments limiting the number of funds people can send overseas. Many users in Africa may also use cryptocurrencies as a faster and cheaper way to pay for international trade transactions and accumulate savings to avoid possible fluctuations in the value of their fiat currency.
