African countries collectively received US$105.6 billion worth of cryptocurrency between July 2020 and June 2021, a year-on-year increase by more than 12 times, blockchain data platform Chainalysis said in a report.
Fast facts
- The adoption rate of cryptocurrency in Africa at the grassroots level is the highest in the world. And retail transactions in Africa account for more than 7% of total transactions, while the global average is 5.5%.
- As some countries restrict or prohibit residents from sending money to crypto exchanges through local banks, the popularity of P2P platforms may be one of the driving factors for more cryptocurrency adoption in the region. Other drivers include the need to bypass government restrictions on remittances abroad and the need to change savings into cryptocurrencies to avoid fiat inflation.
- A previous Forkast article reported that sub-Saharan Africa is the most expensive region in the world for remittances. On average, sending funds equivalent to US$200 to these regions costs about 9.3% of the transfer value. Crypto-based financial technology companies such as Bitpesa, LocalBitcoin, and Paxful can reduce transaction fees significantly by more than 90%.
- The Chainalysis report says the most significant cryptocurrency streams connect Africa and East Asia, followed by Northern Europe, Western Europe and North America. The report says a large amount of crypto transfer from Africa to East Asia is from Chinese workers in Africa. According to a Quartz report, by the end of 2019 there were 182,745 Chinese workers in Africa, mostly distributed in about 10,000 Chinese companies.