The challenges in Africa have made it ripe to respond to the advantages of blockchain technology, particularly as it applies to cryptocurrency. On its own, blockchain has taken a central position in global digital transformation. Much of the explosion of cryptocurrency markets in Africa has only unfolded in the past two years and there is no sign that it is slowing down. We look at why this is and what the current trends are, such as adopting crypto (especially Bitcoin) as legal tender, and funding startups.
Legal Tender in Africa
The statistics for Africa indicate a surging interest in cryptocurrencies in Africa. Initially, it all started with bitcoin trading in the region. But what is of great interest is the growing acceptance that Bitcoin can be used in normal trade, making it a fiat currency. For example, following on from El Salvador, the Central African Republic has denoted Bitcoin as legal tender.
Trends in Crypto in Africa
Africa takes third place in the world in terms of how quickly its cryptocurrency market grows. The enormous figure attributed to this growth is a whopping 1,200 percent over the period from July 2020 to June 2021 (a single year). This has resulted in many investors being willing to invest their assets and money in Africa, boosting commerce far and wide.
Countries such as Nigeria, Tanzania, South Africa, and Kenya have played a major role in the adoption of crypto in those areas that cannot provide an accessible fiat financial infrastructure. This has led to many citizens choosing to store their wealth in cryptocurrencies. Thus, crypto is vigorously traded, transferred, and transacted throughout Africa.
Blockchain Startups that have been able to come into being because of crypto indicate another large trend. In 2021, these organizations made a total of over ninety million dollars in one quarter alone. Compared to the previous quarter, this is a 1,668 percent increase over 149%, in cash flow.
Nigeria, Seychelles, South Africa, and Kenya together collected 96% of all venture dollars in blockchain funding around the globe. This was split largely between Fintech businesses in the amount of $67 million and blockchain exchanges that brought in $34 million. Added to the four percent that went to the remaining countries, a total of $127 million was made in 2021.
Blockchain Unicorns
Blockchain unicorns is a term that covers blockchain organizations that meet two criteria. Firstly, they must be privately owned. Secondly, they must be worth a minimum valuation of one million dollars.
What makes blockchain unicorns so special? One, they are considered to be very successful. Two, they have a firm foothold in the blockchain industry. Third, they excel as leaders in technology and innovation. They also take up a major share of the market.
It is anticipated that Africa will have its first blockchain unicorns within the next three years. However, two companies that are using blockchain in Africa already are Wave and Interswitch in Nigeria.
Blockchain rests on distributed ledger technology, making it decentralized, secure, and transparent. Cryptocurrencies work on this technology. Africa is making great strides in both.
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