6 Factors Influencing The Adoption of Cryptocurrency In Africa
Over the last few decades, the financial industry has seen a lot of technological advancements. Now cryptocurrencies have taken the world by storm, and Africa hasn’t been excluded.
As the second-most-populous continent globally with about 1.5 billion people, it has the third fastest-growing market. Still, it remains the smallest, with only 2 percent of the global value of all cryptocurrencies.
According to Chainanalysis, Kenya, Nigeria, South Africa, and Tanzania had one of the highest cryptocurrency adoption rates and ranked in the top 20 of the global adoption index.
Factors influencing the adoption of cryptocurrency in Africa
Lack of accessibility to financial institutions
One of the problems faced by Africans is poor accessibility to financial institutions. 700milliion out of the estimated population lack access to a financial institution. Inadequate access to banking services has inhibited the growth of entrepreneurship in Africa. However, introducing cryptocurrencies into Africa’s financial markets has provided individuals with an excellent place to secure and store their money.
User Education
According to an article published by Wikipedia, young people make up 60% of the African population. African youths are keen on finding new avenues to improve their standard of living as well as make money.
As a vanguard of blockchain education, Binance has organized free crypto classes for over 541,000 Africans, aimed at supplying blockchain savvy youths with the required skills to transform the industry.
These localized crypto education strategies help drive crypto adoption mainstream in Africa.
Devaluation of fiat currencies
Due to the instability of fiat currencies and a lack of faith in economic systems, most Africans have run to cryptocurrencies to preserve their savings.
Because there are only 21 million Bitcoins in the world, crypto investors do not have to worry about inflation due to overprinting, which is common with fiat currencies.
Binance has continued to be one of the most popular and widely recognized platforms in the African crypto market, where Africans can buy bitcoin or exchange their currencies for other stable coins
The use of P2P platforms
According to a report by Chainanalysis, no region uses P2P platforms at a higher rate than African cryptocurrency users. They account for 1.2% of all African transaction volume and 2.6% of all volume for Bitcoin specifically.
This platform has enabled the continued trade of cryptocurrencies in countries such as Nigeria and Kenya, where bans have been placed on the use of cryptocurrencies.
P2P refers to the direct exchange of assets that could be cryptocurrency between individual parties without the influence of a third party. Although the P2P platform helps you have more authority over who you want to trade with, this privilege comes with inherent risks. However, trading on Binance P2P is safe as we provide an escrow service that ensures safe and fair trading.
On Binance P2P, you can also buy and sell your cryptos with no fees attached. Finally, it offers a seamless experience by providing ways to customize your trading.
Remittance payments
Remittances refer to money sent by people in the diaspora to their families. This money has served as a financial lifeline to most households.
Chainanalysis studies show that African cross-region transfers make up a more significant share of its cryptocurrency market than any other region. In 2019, Sub-Saharan Africa received about $48billion of estimated remittances. Although a large volume of these payments was seen coming from Europe and America, many of them were from African countries.
The major concern with traditional financial institutions is the high fees made while making remittances to Sub-Saharan countries. Some African countries even have a limit on the amount someone can send abroad.
Analysis has shown that the number of remittance payments made using cryptocurrencies has been on the increase because of lower restrictions and fees.
Binance also aids in ensuring users can send and receive value across continents through Binance Pay, a contactless, borderless, and secure cryptocurrency payment technology to let people all over the world pay and get paid in crypto. With Binance Pay, you can send and receive money overseas instantly and with zero transaction cost.
International trade
As cryptocurrencies are becoming widely accepted globally, it has become easier to use in international trades. Most African importers and exporters have affirmed the benefits of cryptocurrencies in international trade.
On average, payments across borders take about three to five business days to process. This lag time can be a major blocker for most African SMEson businesses that depend on cash flow to keep their business operations running.
The adoption of cryptocurrencies by Africans has helped reduce the time lag as transactions can now be made instantly.
How to buy crypto in Africa
Binance is a good place to start if you are new to cryptocurrency. To get started on your journey, you have to take the first step to buying crypto on the Binance app.
All you need to do is sign up on Binance, and complete your account verification. Once your account is verified, you can start buying Bitcoin and other cryptocurrencies with zero fees on Binance P2P.
If you want to learn more about Binance payment gateways, read the following articles