Contrary to what experts expected, cryptocurrency adoption in Africa is on the rise. Unlike in other parts of the world, African countries have been skeptic of the blockchain technology, cryptocurrencies in particular due to reports that virtual currencies have been used for nefarious purposes like tax evasion, money laundering and terrorism financing. The acceptance has been gradual, and for the last six months, the popularity of cryptocurrencies and blockchain-related businesses have largely increased in the African region.
In a new report, political risk news and analysis site Global Risk Insights listed the various factors that enabled the growth of cryptocurrency and blockchain businesses in Africa. According to the report, one major factor is the high unemployment rate in most of the African countries.
A research conducted by the International Labor Organization(ILO) showed that the unemployment level in Africa was so high that many have opted to create their own small business. According to ILO, 66% of businesses in the Sub-Saharan region fall under the informal sector. The informal sector in Africa is largely dominated by the youth who are actively turning to blockchain solutions. Pushed by unemployment and hardships in the informal sector, many youths are motivated to start various innovations all across Africa.
Blockchain technology has provided many businesses in the informal sector with the much needed financial hope they can’t get from their governments. In Kenya, small businesses can now access microloans through their mobile phones. Thiswas made possible after blockchain startup Twiga Foods teamed up with IBM to help small business in the region. Also in Kenya, youths are crowdsourcing to gain capital to start up innovations and support those already in business
Cryptocurrencies like Bitcoin are steadily gaining popularity as they are easy to access and transact with compared to fiats. According to reports, countries among them South Africa and Zimbabwe have taken great strides including installation of bitcoin ATMs. People in Africa can also access their cryptocurrency holdings using their mobile devices.
Also in South Africa, a startup is working to build an ecosystem that uses Bitcoin Cash. Centbee is a cryptocurrency wallet and a merchant payment solution that embraces Bitcoin Cash, which will allow it to offer straightforward and easy global payments. With its promise of delivering a game-changing ecosystem replacement, Centbee has attracted high-profile investors from the blockchain field, including blockchain research and development firm nChain Group.
Meanwhile, virtual currency exchanges continue increasing in the region, with some like Luno Exchange and BitPesa making quite the impression. These exchanges have grown and are currently trading in millions per day. So far, Africans are involved in over 1,500 cryptocurrencies, with Bitcoin ranking the highest. The future of blockchain in Africa looks brilliant as the technology continues to penetrate Africa’s core.
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