In recent years, Africa has been one of the most active regions in the cryptocurrency industry. The continent is home to several exchanges, startups, and initiatives that are driving cryptocurrency innovation forward.
Most of Sub-Saharan Africa’s population is relatively young, 70% is under the age of 30, which is critical for cryptocurrency and blockchain innovation in Africa. This makes Africa an ideal cradle for innovative technologies, including cryptocurrencies. Africa has a history of adopting new technologies, with mobile money being used across the continent.
Role of Crypto in Africa
Even if Africa becomes just 2% of the global cryptocurrency market, its rapid growth will revolutionize finance in a more digital and urban sub-Saharan continent. Africans received $105.6 billion in cryptocurrency during the year from July 2020 to June 2021, according to Chainalysis, a blockchain data firm. According to Chainalysis, Kenya, South Africa and Nigeria are among the top ten countries for the use of cryptocurrency.
The beauty of cryptocurrency is that it enables decentralized P2P lending, allowing everyone from all economic strata to succeed by providing more financial alternatives to underserved consumer demographics. Cryptocurrencies have the potential to solve several economic problems in developing countries, including expanding access to finance for micro, small, and medium-sized enterprises (MSMEs), making it easier to send remittances, and providing currency alternative.
According to Chainalysis, in 2020, $562 million in cryptocurrency was used for remittances to sub-Saharan Africa, accounting for 14% of the total $48 billion sent. Because cryptocurrencies have made low-cost mortgages feasible, people who couldn’t get credit due to irregular sources of income can now access them.
Factors Preventing People from Adopting Cryptocurrency in Africa
Accepting bitcoin as a viable currency requires recognizing its value around the world, a truly decentralized asset that people can use to securely move and store value. Due to a lack of regulation, trust, large regulatory agencies restricting digital currencies, and a scarcity of cryptocurrency education, many African countries are lagging behind, despite the rates of aforementioned booming adoption in some others.
There are currently no formal educational institutions for cryptocurrencies in Africa. A few key players, such as foundations and individuals, have emerged to provide training, but that is not enough to put Africa on the international map as a cryptocurrency leader.
Africans use popular social networking sites like YouTube, TikTok, Twitter, and Facebook to learn about digital currencies like Bitcoin. They can also find useful information on the subject in books, blog posts or documents provided by crypto platforms such as Binance, Coinbase, and Coinmarketcap, which require an internet connection. Due to the threat of central bank regulation or bans, most African media companies have avoided promoting crypto awareness.
With the Internet becoming the main source of information for many people on the continent, the internet connection rate must improve significantly if cryptocurrency businesses grow in Africa, which is far from the case at present. Only 22% of the mainland has access to high-speed internet, which is a significant issue given the number of African countries that rely on mobile towers. 91% of mobile users need to use 2G or 3G networks, which are obsolete by today’s standards. A blockchain startup, 3air, is working on a solution to the continent’s internet problem.
How can 3air help accelerate crypto adoption in Africa?
The African continent is home to many Internet users who cannot access the web for lack of broadband connectivity. By leveraging blockchain technology, 3air has ambitious plans to deliver seamless connections in Africa.
End of 2021, 3air in partnership with K3 Telecom to provide Africans with easy access to broadband. The partnership allows the telecom operator to expand its “K3 Last Mile” initiative, which provides internet connectivity for areas with poor coverage. 3air promises a blockchain-based internet software interface. The physical infrastructure would include mobile base stations with the capacity to deliver 15,000 users at super speeds of 1 Gbps per user, more than a hundred times faster than what current mobile internet providers offer.
Cities will have connected base stations, with at least one station connected to the Internet. Users will connect through transceivers that can be found in homes and structures. These transceivers are tiny, highly efficient, rugged and simple to install, making them economical and practical for citywide use, according to 3air. Each base station consumes 500W of power, which will not affect the local environment.
With increased access to high-speed internet, 3air hopes more people will have the opportunity to learn and embrace cryptocurrency. 3air hopes that increased access to the internet will reduce the digital divide and allow for a more level playing field for economic opportunity. Unbanked or underbanked Africans have flocked to cryptocurrency because it is decentralized and can store value. 3air aims to provide everyone in Africa with internet access so that they can enjoy the benefits offered by digital currencies.
What is the future of cryptocurrencies in Africa?
Africa presents a unique opportunity for new technologies and innovations, including cryptocurrencies. The continent has a young and growing population that is increasingly tech-savvy. With proper infrastructure and education, there is excellent potential for cryptocurrency adoption in Africa.
Cryptocurrencies would be extremely beneficial for Africans. They are decentralized and perfect for countries with unstable economies or currencies. Additionally, cryptocurrency can be used to send money abroad at no cost.