Years ago media predicted the rise of bitcoin in the emerging-market countries. Unsurprisingly, that’s what is happening today. Bitcoin and its brethren are conquering the financial markets of countries, which are living through financial or economic crisis and suffer from bureaucracy, lack of development, volatility of national currencies and high remittance fees. The digital asset seems to be quite an attractive alternative to financial systems of developing countries, particularly, African states. Currently, the oldest cryptocurrency in the world is experiencing the prosperity period in the region.
Africa Embraces Bitcoin
According to Google Trends and several reports, bitcoin is currently trending in African countries. For instance, atop of the Trends list in January 2018, there is South Africa. Two other countries, Nigeria and Ghana, are represented in top-10 countries, interested in bitcoin.
Just last month Nigeria was #1 on the trending list, and now it sits on #7 when Ghana is #10. Furthermore, the popularity of bitcoin also grows in other highly populated areas such as Kenya and Sudan.
The popularity of bitcoin keeps growing in South Africa. Perhaps, people there find the decentralized currency as means of surviving and getting success when the government is not capable of solving economic, social and political issues. In March 2017, the online trading platform eToro, which functions in the country, has seen the increase of the number of customers, just at the time, when Pravin Gordhan, the South African now ex-minister of finance, lost his post.
In the comment to the Wall Street Journal, the platform’s analyst Mati Greenspan said that the political difficulties might have directly influenced the growth of traders on the exchange:
“In South Africa, the number of new users trading bitcoin through eToro rose by 671% from January to the end of November last year over the same period in 2016, more than the 574% overall growth.”
The leader of marketing for digital asset platform Luno, which is based in London but operates in Asian and African countries, Werner van Rooyen added that South Africans conduct thousands of trades per week on the platform.
Meanwhile, in 2017 the p2p transactions in Nigeria grew by about 1,500%, as it is reported in the article by Bloomberg. At this time, the state lived thought the rehabilitation era of the foreign exchange market. Hence, the national public currency of Nigeria – naira – decreased by 12.4%.
No wonder that people started paying more attention to alternative means of transaction and deposit. In accordance with LocalBitcoins data, last year, trading volume in Nigeria stood at $115 million, when the worldwide trading made up to $1.9 billion.
The columnist from Uganda, Catherine Byaruhanga in her blog for BBC stated that despite the risks of the bubble, the surging price of bitcoin seems especially appealing to African millennials. Among the African representatives of generation Y, who pile into bitcoin, is young Peace Akware. She lives in Uganda’s capital city Kampala and is optimistic concerning her crypto investment. The young lady hopes not only to make purchases with bitcoin like buying a car and land but also to invest in building on the land.
On the other hand, Ugandan Martin Serugga cautions millennials that bitcoin can be risky. He conducts classes about cryptocurrency every week for around 50 people. He also teaches them how to trade bitcoin against the local public currency.
According to News.Bitcoin.com the adoption of bitcoin has been increasing exponentially due to the political turmoil in the country, particularly, after the scandalous resignation of Zimbabwe’s president Robert Mugabe. The economic volatility of the country has also led to the fact that bitcoin overcame global averages numerous times throughout 2017.
Bitcoin Thriving Amidst Caveat
Some experts in the field of digital safety believe that the quite novel crypto technological trends will help to make difference in Africa. One of them is Neil Blazevic, who answered BBC:
“With the right support for innovation, and collaboration Africa could once again leapfrog over the digital divide and become a market leader just like it did in the move from landline communications infrastructure to the mobile phone ecosystem.”
In the meantime, the p2p platform Localbitcoins is fixing the volume records in such countries as Nigeria, South Africa, and Kenya. The trading there has been soaring of the essence since summer 2017.
Nevertheless, not everybody is happy with bitcoin adoption in Africa. A group of activists from several African nations has turned to the EAC (East African Community), which is a six-Eastern African-state central bank organization, with a special request. These members’ goal is to develop a unified currency for the six Eastern African nations, but they believe that bitcoin can be dangerous to this project.
Furthermore, within the past few months several central African banks, e.g., Kenyan, Tanzanian and some others also expressed their concern over bitcoin and asked people to be cautious with it.
Charts Source: Google Trends; Localbitcoins.