Blockchain technology is making a significant impact in Africa by addressing real-world problems such as hyperinflation and corruption. While many Western investors may see cryptocurrency as a speculative trend, executives in Africa believe it is a powerful tool for financial freedom and inclusion.
Chris Maurice, the founder and CEO of Yellow Card, Africa’s largest cryptocurrency exchange, highlights the rapid growth of crypto in Africa. He states that crypto is thriving because it allows Africans to escape the failures of the traditional financial system and transact more freely. Maurice emphasizes that crypto in Africa solves real-world problems related to banking and currencies, unlike the perception of it being a casino-like gamble in the West. The most common use cases for crypto in Africa include international payments, sending money to friends and family, and protecting against inflation.
Similarly, Kevin Imani, the founder and CEO of Sankore 2.0, believes that blockchain-based payments can act as a human rights technology. In underdeveloped nations, citizens face challenges due to hyperinflationary pressure and corruption. Cryptocurrencies provide a lifeline by promoting greater financial inclusion and control over money. Inflation rates in Sub-Saharan Africa reached an estimated 14.5% in 2022, making peer-to-peer crypto transactions an attractive alternative to weak national currencies.
Okoye Kevin Chibuoyim, the founder and CEO of GIDA, a crypto education platform in Nigeria, sees crypto as Africa’s next opportunity to be part of something great. He compares it to the internet revolution of the 2000s, which many Africans were not as exposed to at that time. Chibuoyim highlights the transparency of the blockchain, which contrasts with the lack of accountability and transparency often associated with African governments. He believes that blockchain technology builds trust within the system.
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The growing adoption of cryptocurrencies in Africa is evident in the increase in cryptocurrency users by 2,500% in 2021. This surge led to an 11-fold explosion in venture capital funding for African crypto startups in 2022. Maurice specifically mentions Nigeria as a country where cryptocurrency adoption is exceptionally high, with 47% of Nigerians reported to own or transact with crypto on a daily basis.
While many African countries embrace cryptocurrency, there are instances of legal and regulatory restrictions. Botswana stands out for having the most legal and regulatory clarity in the region. However, some countries, including Cameroon, Central African Republic, Gabon, Guyana, Lesotho, Libya, and Zimbabwe, have declared cryptocurrency illegal.
Partnerships between international and African companies are further accelerating the growth of crypto in Africa. For example, Block, a U.S. digital payments firm led by Jack Dorsey, partnered with Yellow Card to facilitate cross-border payments in Africa using Block’s infrastructure. Such collaborations contribute to the development of a robust crypto ecosystem in the continent.
The emergence of blockchain technology in Africa showcases its potential to address socio-economic challenges and promote financial inclusion. As the continent continues to embrace cryptocurrencies, it has the opportunity to become a global leader in this space. The technologies’ transparent nature, ability to counter hyperinflation and corruption, and offer financial freedom make it a lifeline for many Africans. With proper regulatory frameworks and widespread adoption, blockchain technology can revolutionize the African economy and empower its people.
