Small value crypto transfers up 55% in Africa
10 Sep 2020
Cryptocurrency usage figures in Africa continue to increase according to findings from blockchain analytics firm Chainalysis.
More and more Africans are opting to use crypto to sidestep high fees, regulatory difficulties and currency instability, reports Cointelegraph.
The number of transfers per month to and from Africa has surpassed 600,000, with the total number of transfers under $10,000 increasing by 55% in the year to June, to hit $316 million.
Nigeria tops the list in terms of the highest number of cryptocurrency transfers, followed by South Africa and Kenya.
Retailer Abolaji Odunjo told Reuters he began using Bitcoin – the world’s largest cryptocurrency – to pay his Chinese suppliers, for speed and convenience.
“Bitcoin helped to protect my business against the currency devaluation, and enabled me to grow at the same time,” he stated.
Several countries in Africa face a constant struggle with currency devaluation and instability, leading to higher demand and increased cost of purchasing U.S. dollars.
Over the past decade, certain currencies, such as South Africa’s Rand, have lost over half of their value against the U.S. dollar.
Furthermore, according to a World Bank post, fiat remittance fees in Sub-Saharan Africa cost an average 8.9%, with the highest costs per transaction, at 20%, recorded in South Africa.
Bitcoin fees are dramatically less, usually under 3%.
The Cointelegraph report goes on to add that the value of cryptocurrencies sent to Africa in 2020 is set to exceed the previous year’s total of $8 billion sent, with nearly $1 billion sent solely in June.
In contrast the World Bank reported just $48 billion worth of fiat currency was sent to Sub-Saharan Africa last year, with the total forecast to drop to $37 billion in 2020.
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