Which countries in africa are using cryptocurrency

There are tools that allow anyone to look up transaction data — including where, when, and how much of a cryptocurrency someone sent from a wallet address. But there are risks, too. What are those? First, cryptocurrencies are very complex. They require a bit of technological astuteness to embrace. A significant proportion of the adult population in sub-Saharan Africa This, to a certain extent, turns the financial inclusion argument on its head.

This is a threat that does not exist if you have a bank account. Thirdly, cryptocurrencies have had a history of volatility , as is currently being experienced in the crypto market. This has adversely affected retail investors, especially those who do not understand this type of asset class. Another issue of profound concern to African states is the potential threat to monetary sovereignty.

Should crypto ever be more widely used than domestic fiat currency, national monetary agencies such as central banks may not be able to steer their economies to a path of growth using monetary policy. Such policy is, after all, primarily administered through domestic currencies.

An associated threat is the weakening of effective capital controls in African states. These are needed to prevent capital flight from domestic economies. Any weakening can result in significant volatility in currency rates and the rapid depreciation of domestic currencies. Read more: Decentralised finance calls into question whether the crypto industry can ever be regulated There are also threats to financial stability.

This could arise from significant exposure that financial institutions, like banks, have to crypto firms such as through loans. Regulation in some African countries, such as Nigeria addresses this by restricting transactions between banks and crypto assets service providers. What is the future of cryptocurrencies in Africa? Despite the ongoing downturn in the market, cryptocurrency represents the future of finance and financial transactions.

And there are indications that cryptocurrencies are here to stay which is seen from their increasing recognition by countries. At one extreme, the governments of El Salvador and the Central African Republic have adopted bitcoin as legal tender, although the implementation and impact of this on their broader economies have been faced with severe criticisms. Others, such as Nigeria , have recognised the need for state representation of digital currencies in the form of central bank digital currencies.

Many other countries are now exploring this option. It is important to note, however, that the uptake of central bank digital currencies has been very low in developing countries that have rolled them out. In another world, Bitcoin is a decentralized currency over which the central bank and regulators have little control. As a result, most African and global governments have outlawed cryptocurrency.

Despite these unfortunate events, the number of businesses accepting cryptocurrency as a payment method remains high. This includes well-known corporations such as Microsoft. This is one of the factors contributing to the explosive growth of cryptocurrency adoption in African countries. These countries see digital assets as a way to increase their wealth. This currency provides a platform for good governance and development in Africa.

These currencies can also help reduce the current corruption rate in African countries to some extent. Throughout the years, numerous cryptocurrency-based operations have emerged in Africa. The Luno Exchange, based in South Africa, is one of these operations. Luno Exchange currently has over 1. BitPesa is another Kenyan crypto-related operation.

BitPesa, launched in , facilitates the transfer of virtual remittances between international and African countries. Since its inception, BitPesa has reported impressive trading volumes. Because Bitcoin is still young and has a lot of potentials, crypto experts predict that similar operations will sprout in large numbers. What are the challenges of cryptocurrency adoption in Africa? Although there has been exponential growth in crypto adoption in Africa, some challenges have been facing it.

One major problem is the lack of adequate infrastructure. Only 20 Bitcoin nodes are available in Africa, out of 10, The figure for Ethereum is even lower. Furthermore, the majority of these nodes are located in South Africa.

Furthermore, the Bitcoin Mining Network is underdeveloped. Africa accounts for only 0. And it only contributes 0. The majority of these contributions are from South Africa. Another report by Coinshares, a pioneer in digital asset investing, revealed that bitcoin mining activity in Africa is virtually non-existent. Another common issue in African countries is low internet penetration. Africa has a penetration rate of 39 percent, while the global average is 59 percent. One of the most important requirements for crypto mining and investment is high-speed internet.

So, for crypto adoption to take off in Africa, each country must have a good and improved internet connection. Fortunately, some African countries have increased their internet penetration so far. Kenya has the highest internet penetration rate at Fortunately, Internet Service Provider ISP companies such as telecom are working to improve and expand internet access in African countries.

There is no doubt that as internet penetration improves, crypto adoption will increase exponentially. The dominant mobile money system in countries like Kenya, may also be a barrier to cryptocurrency adoption in these countries. According to the Central Bank of Kenya, Kenyans have transacted billions of dollars through mobile money services such as M-pesa over the years.

As a result of this dominance, cryptocurrency adoption in Kenya and similar countries may struggle to reach the pinnacle of dominance.

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Africa is the second most populated continent in the world with an estimated population of 1. Due to past histories like colonialism, civil wars and harsh terrains, African countries have suffered from poverty, poor growth and extreme economic loss and crisis for a long time. Nonetheless, the underdevelopment in infrastructure has made Africa a big vector for cryptocurrency, which only requires a smartphone and network connection to gain access to blockchain networks.

As well as basic crypto knowledge, which can be acquired from relevant crypto blogs. In the last year, about a 1, percent increase in crypto value had been accounted for, in Africa alone. According to Chainalysis Insights, Africa has top peer-to-peer p2p payment platforms in terms of transaction volume across all regions. Over 70 million Nigerians have traded cryptocurrency in the last six months.

Central banks in most African countries like Kenya and Nigeria have been hostile to cryptocurrency exchanges, leaving crypto traders in Africa to deploy P2P platforms as the only viable solution, unless they use VPNs to access servers in other countries, which can be inconvenient for many. In December , the Central Bank of Kenya issued a warning to Kenyans to stop the trade of bitcoins. And we have come up with the following answers: Regulations In certain African countries, crypto operations have been greatly stifled by draconian regulations.

Crypto trading is outrightly prohibited in countries such as Tanzania, Algeria and Morocco. In December , the Bank of Tanzania also proscribed the use of crypto services. Heavy-handed regulations in these countries mean that people are disallowed from undertaking crypto transactions, as it is a criminal activity punishable by law. Small Youth Populations Young people are the most tech savvy demographic of any society. As such, they are much more conversant with crypto dealings. They are by far the biggest proponents of crypto platforms across Africa.

However, many African countries have small youth populations. In Lesotho and Namibia, there are only about , and , youths respectively. These youth population sizes are almost negligible when compared to those of countries like Nigeria 34 million and Ethiopia 31 million.