The cryptocurrency market in Africa has grown over 1,200% since 2020, according to data from digital analytics firm Chainalysis.

As well as this substantial growth since last year, Africa has also had a larger share of overall retail transaction volume in relation to the global average.

Chainalysis said the cryptocurrency market in Africa increased in value by more than 1,200% between July last year and June 2021, with the highest adoption recorded in Kenya, South Africa, Nigeria and Tanzania, Cointelegraph reports.

The analytics firm added that one of the principal factors driving the increased crypto adoption may be the growing popularity of P2P platforms, as a number of countries have restricted or prevented people from sending money to exchanges via local banks.

Africa received $105.6 billion worth of crypto between July 2020 and June 2021, according to the Chainalysis data, with the largest overall transaction volume made up of “retail-sized transfers” – around 7% compared to the global average of 5.5%. 

Furthermore, P2P platforms, such as Paxful and LocalBitcoins, make up 1.2% of all cryptocurrency transactions on the continent.

“In many of these frontier markets, people can’t send money from their bank accounts to a centralised exchange, so they rely on P2P,” stated Paxful co-founder and COO Artur Schaback. “Crypto products are getting more user friendly, so they can onboard more people into the crypto economy and help them see that crypto is faster, cheaper and more convenient.”

Another factor fuelling the growth in crypto adoption involves remittances as a way of circumventing governments restricting amounts that can be sent overseas. 

Nigeria is looking to pilot its CBDC (central bank digital currency) known as the eNaira, on 1 October, whilst South Africa belongs to a joint initiative with Australia, Singapore and Malaysia to roll out a digital currency.