The adoption and use of Bitcoin in Sub-Saharan Africa has surged to the highest globally, according to the 2023 Geography of Cryptocurrency Report by Chainalysis. The report, published yesterday, focuses on the region's significant growth in cryptocurrency usage, with homegrown sub-Saharan Africa-based exchanges outpacing global ones.
Nigeria stands out with a 9% annual growth rate in cryptocurrency activities, ranking second globally in Bitcoin usage, only behind India. This growth is driven by economic hardships, including recessions and a weak national currency. The Naira crisis has led to further adoption of cryptocurrency as residents seek alternative stores of value.
Despite accounting for just 2.3% of global transaction volume between July 2022 and June 2023, Sub-Saharan Africa's crypto economy has penetrated key markets and become an integral part of many residents' day-to-day lives. Countries such as Kenya, Ghana, and South Africa rank high on the Global Crypto Adoption Index.
In Ghana, high inflation rates have made Bitcoin an attractive alternative store of value. Similarly, in South Africa, clear regulations are fostering more crypto usage. The Financial Sector Conduct Authority recently launched a crypto licensing system that has removed much of the regulatory uncertainty and encouraged crypto trading. Consequently, Luno, a South African platform, saw a nearly 50% surge in users over three years.
Co-founder of a Nigerian crypto exchange, Moyo Sodipo noted that stablecoins are also growing in popularity in the region. Users are not only chasing high returns but also seeking stability, reflecting a mature market.
Chainalysis concludes that while richer countries might trade more cryptocurrencies, the real need for crypto is more pressing in developing markets. The report disproves the idea that crypto is primarily a Western trend.
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