Why do we see a spike in crypto adoption in Africa? A lot of thoughts around this question are popping out of everywhere across the world. Africa, despite a third world and a poor country has been witnessing massive crypto adoption. The reason is quite simple: ROIs, risk-free investment and ease. Where most of the population had to struggle a lot to enjoy financial inclusion via formalities, crypto has simply eased that process. You need no legal documents or complex process or even minimum balance to open an account. Now with crypto wallets in the picture, you can even put your $5 bill to a good use and make considerable returns.
Why crypto drive is at a new high in Africa?
Currency inflation has reached its pinnacle in Africa. In some of the countries in Africa, currency notes have turned as good as toilet paper. It doesn’t make sense to stack up a pile of cash to buy a pound of bread. That’s the situation in Africa and even in South America. That’s why people have shifted to crypto for refuge. As dwindling monetary policies of the government has made fiat a decorative bathroom prop. You shouldn’t be surprised to see people using fiat as toilet paper. On the contrary, cryptos have turned up as profit making machines. Most folks invested in numerous DeFi protocols in Africa and stacked up cash by the DeFi boom in 2021.
There’s a lot of inflow and outflow of cash from and to Africa due to the African diaspora living in different parts of the world. With that said, the African government imposing restrictions and high fees on remittance have made cryptos a refuge that citizens want in Africa. In 2020, there was a 55% increase of remittance amounting to US$10,000 or below to Africa. As the government imposed restrictions on money transfer mediums like Western Union via high fees, the crypto adoption reached the next level in Africa. On the Tron blockchain, remitters were able to send money for a very little fee of even $1 with instant settlement.
The market is ripe for innovation in foreign remittance. As the state imposes more restrictions and makes transfers burdensome, citizens are most likely to use crypto as an alternative gateway. CoinNest has paved the way to instantly send money in no time with minimal fees to anywhere in the world. We would be seeing a significant growth in how blockchain will drive the remittance industry in Africa.
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