In the last couple of years, crypto has been making a lot of headway in Africa, becoming exceedingly popular. Well, some countries have embraced crypto regulations while others still remain cautious, making crypto a hot topic all over. Countries like Nigeria and South Africa are playing a big role in the adoption of crypto, coming out as key players in the global digital currency landscape.
Even though the region accounted for only 2.7% of the total crypto transaction value globally between 2023 and 2024, there was a huge increase in on-chain value in Sub-Saharan Africa. According to The 2024 Geography of Crypto Report by Chainalysis, the amount of crypto received in 2024 was $125 billion, $7.5 billion more than in 2023. This just goes on to elaborate on how much the region is increasing the use of crypto.
Right now, you can get altcoins, stablecoins, memecoins and other types of crypto. For example, Solana is one of those coins that has gained much popularity dues to its scalability and technical solutions. When you look at the Solana price chart , you'll realize why it is a big competitor to altcoins like Ethereum. Its price is quite affordable, and now tie it to its uses, including NFT and DeFi integrations, it becomes explosive.
Where is crypto reigning supreme?
The demand for crypto has been reigning high in Nigeria , with the country being the only African country to be ranked in the top 20 globally in crypto transaction value. Other countries like Kenya, Ethiopia and South Africa follow suit, ranking 26th, 28th and 30th, in that order. All this comes from the report by Chainalysis.
In 2024, Nigeria saw a massive surge of 68% to reach a whopping 106 million crypto holders. Now, Egypt’s numbers blew the roof with a massive 138% increase to reach 21 million users. Kenya and South Africa followed suit to see a 90% and 38% increase, respectively, to reach 11 million and 13.9 million users. Even in countries where crypto has been banned, like Morocco, there are over 6 million people holding crypto. However, Abdellatif Jouahri (The boss of Bank Al-Maghrib) revealed that the government was drafting a law to regulate the cryptocurrency industry.
But now, you might be wondering the reason behind this whole crypto explosion.
The increased use of stablecoins
Stablecoins have become a vital aspect of the crypto economy of Sub-Saharan Africa. In 2024, stablecoins accounted for nearly 43% of the region’s overall transaction volume. You can just compare this to 18% of the transaction volume carried out through Bitcoin. The inflation rate and volatility and inflation rate of some country currencies has made stablecoins, especially the ones pegged to the US Dollar, a common occurrence. Individuals have been using USDT and USDC for a number of things because of their advantages. For example, stablecoins are being used for:
- Facilitating international payments
- Supporting cross-border payments
- Storing value
Speaking to Chainalysis, Chris Maurice, the CEO of a popular crypto asset exchange in Africa, said that the reason more people are turning towards stablecoins is the FX crisis. About 70% of African countries have been undergoing a foreign exchange (FX) shortage, thus turning to stablecoins to help them strengthen their economies.
Ethiopia has become the fastest-growing market for retail-sized stablecoin transfer, with a whopping 180% YoY growth. In July 2024, Ethiopia’s local currency lost 30% of its value, fueling the demand for stablecoins. Starting in late 2023, South Africa saw an increase in the popularity of stablecoins, surpassing Bitcoin in popularity.
The soaring growth of cross-border payments across Africa
Africa has been increasing cross-border payments at a very high rate. Currently, there are more than 40 million Africans living outside the country of their origin. These people make cross-border transactions frequently. In 2022, the total amount transacted through international borders was more than $100 billion.
However, with international transactions come charges. For instance, if you want to transact $200 using bank transfers, there is a cost of around $8 to $10. Cumulatively, all these transaction costs can be frustrating, leading people to look for more reliable ways. Also, conventional banking systems are quite slow in that an international transaction can take anywhere between 2 days and 2 weeks. Then comes crypto!
According to Chris Maurice, cryptocurrencies are at the forefront of opening up African economies to the global market. Businesses are able to operate with minimal costs due to the minimal transaction costs that come with crypto. Also, Rob Downes, Head of Digital Assets, ABSA Bank, CIB, stated that stablecoins and other crypto are proving to be game changers for people sending money abroad to family members or businesses. This is because these tokens are faster, more reliable and more affordable than the traditional payment services.
Businesses, from small-scale importers to large-scale multinationals making transactions across international borders, have been seeing massive changes in how they transact. Cryptocurrencies are facilitating transactions that, at other times, would be stalled because of currency shortages or payment rejections.
Over the course of the few years that cryptocurrencies have been on board, Africa has been taking time to develop itself in crypto transactions. Right now, a country like Nigeria is giving other global giants a run for the adoption of this technology. Actually, we can also see that other countries on the continent are not being left behind in this technological race. In the next few years, a good portion of Africa will be working with cryptocurrencies because of the numerous benefits it carries.
