TL;DR
- Sub-Saharan Africa has seen a $125 billion increase in on-chain value, with Nigeria and South Africa leading in cryptocurrency adoption.
- Stablecoins are gaining traction as a reliable alternative for cross-border remittances, particularly in Nigeria and Ethiopia, due to local currency volatility.
Sub-Saharan Africa is undergoing a significant shift in its financial landscape, particularly with the rise of cryptocurrencies. According to the 2024 Geography of Cryptocurrency Report by Chainalysis, the region has experienced a notable increase of approximately $125 billion in on-chain value, despite accounting for only 2.7% of the global crypto economy. Nigeria and South Africa are at the forefront of this growth, with Nigeria emerging as the second-largest country for cryptocurrency adoption globally.
Nigeria has seen around $59 billion in on-chain value from July 2023 to June 2024, driven by the practical use of cryptocurrencies for everyday transactions like bill payments and retail purchases. Moyo Sodipo, COO of Busha, highlights the shift in perception of cryptocurrencies from speculative assets to essential tools for daily financial activities. Notably, 85% of Nigeria's crypto transactions are under $1 million, reflecting a trend towards smaller, retail-sized transfers.
South Africa has also established itself as a significant player in the crypto space, receiving about $26 billion in value over the past year. The country's regulatory environment has fostered growth, allowing licensed companies to thrive and increasing institutional interest in digital assets. Rob Downes from ABSA Bank notes the convergence of traditional finance and digital assets, with a growing demand for custody solutions.
Both nations are witnessing a surge in stablecoin adoption, with these digital currencies becoming vital in the region's crypto economy. In Nigeria, stablecoins account for around 40% of all inflows, serving as a hedge against local currency volatility. The average cost of sending remittances via stablecoins is significantly lower than traditional methods, making them an attractive option for many. Ethiopia has also seen a remarkable 180% year-over-year increase in stablecoin transfers due to the devaluation of the birr.
As Sub-Saharan Africa continues to embrace cryptocurrency, the potential for financial inclusion and innovation is substantial. The report emphasizes the need for regulatory clarity and collaboration between traditional financial institutions and crypto companies to build a thriving ecosystem.
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Nigeria and South Africa Lead Cryptocurrency Growth in Sub-Saharan Africa
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