According to a survey by blockchain data company Chainalysis, Sub-Saharan Africa is driving unprecedented crypto growth and usage thanks to small retail purchases, with the area handling the world’s greatest proportion (80%) of crypto retail sales of less than $1,000.
The research also emphasizes that Sub-Saharan Africa is the region of the world with the highest prevalence of peer-to-peer transactions. Africa has far more peer-to-peer transactions than Central and Southern Asia and Oceania, the region with the second-highest numbers in that category, combined with around 6% of the total amount of crypto transactions.
The report claims that many Africans now use cryptocurrency in their daily lives. Remittances and business transactions, in addition to retail transactions, have been important factors in driving Africa’s high adoption and usage rates.
The paper notes that in nations where the value of their domestic fiat currencies is declining, as we’ve seen in Nigeria and Kenya, “Crypto adoption is driven by everyday necessity, as opposed to speculation by the already wealthy.”
At first look, the Chainalysis report’s high-level statistics portray a continent as having the lowest global bitcoin transaction volume ($100.6 billion in on-chain volume received between July 2021 and June 2022, according to Chainalysis).
However, a closer look at the research reveals two things: first, a very diverse region with varying rates of usage and adoption; and second, a real need for cryptocurrencies.
Africa’s varied crypto acceptance rates and usage
The Chainalysis study includes a link to the Global Crypto Adoption Index, which also comes from Chainalysis, and compares nations like Burkina Faso and Malawi to others in Africa like Nigeria and Kenya.
Burkina Faso and Malawi were placed 133 and 137 out of 146 countries, respectively, whereas Nigeria and Kenya were ranked 11 and 19, respectively, in the ranking. This broad range demonstrates the variety in cryptocurrency adoption and usage across the African continent.
A genuine need for crypto
Chainalysis contrasts wealthy Western nations that utilize cryptocurrency to increase wealth with less developed African nations that use cryptocurrency to build and protect wealth in the face of challenging economic situations.
Adedeji Owonibi, founder of the Nigeria-based blockchain consulting firm and product studio Convexity, stated in an interview with Chainalysis that Sub-Saharan Africa does not have large, institutional-level traders. “Retailers are the ones pushing this market. Cryptocurrency is a lifeline for Nigeria’s large population of highly educated young graduates who have high unemployment rates and no jobs to turn to. It’s how they provide for their family.
A market where cryptocurrencies are used frequently may offer special chances for business owners and startups. The paper reveals that despite a bear market, retail usage is steady or even rises.
The research notes that “the number of modest retail transfers actually increased starting at the beginning of the bear market in May.”
Startups that can enable retail, commercial, and peer-to-peer interactions appear to have a good chance of succeeding in Africa. Chainalysis reports that Nigeria, Paxful’s biggest market, and Kenya are enjoying remittance user growth rates of up to 55% and 140%, respectively.
