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 driving cryptocurrency innovation.
Most of Sub-Saharan Africa’s population is relatively young, 70% under the age of 30, which is crucial for cryptocurrencies and blockchain innovation in Africa. It makes Africa an ideal birthplace 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
Although Africa accounts for only 2% of the global cryptocurrency market, its rapid growth is poised to revolutionize finance in a more digital and urban sub-Saharan continent. According to Chainalysis, a blockchain data company, Africans received $105.6 billion in cryptocurrency in the one year from July 2020 to June 2021. According to Chainalysis, Kenya, South Africa and Nigeria are among the top ten countries for cryptocurrency usage.
The beauty of cryptocurrency is that it enables decentralized P2P lending, allowing anyone from all walks of life to thrive by providing more financial alternatives for underserved consumer demographics. Cryptocurrencies have the potential to address several economic issues in developing countries, including expanding access to finance for micro, small and medium-sized enterprises (MSMEs), facilitating the sending of remittances, and providing an alternative currency.
According to Chainalysis, $562 million worth of cryptocurrencies were used for remittances in sub-Saharan Africa in 2020 — or 14% of the total $48 billion sent. Since cryptocurrencies made low-cost mortgages possible, people who couldn’t get credit due to irregular sources of income can now access them.
Factors discouraging people from adopting cryptocurrency in Africa
Accepting bitcoin as a viable currency requires global recognition of its value, a truly decentralized asset that populations can use to securely move and store value. Due to a lack of regulation, trust, big regulators restricting digital currencies, and a lack of cryptocurrency education, many African nations are lagging behind in some others, despite the aforementioned booming adoption rates.
There is currently no formal cryptocurrency educational institution in Africa. Some key players, such as foundations and individuals, have emerged to offer training, but it’s not nearly enough to put Africa on the international map as a cryptocurrency leader.
Africans use popular social networks like YouTube, TikTok, Twitter and Facebook to learn about digital currencies like Bitcoin. You can also find helpful information on this topic in books, blog articles or materials provided by crypto platforms like Binance, Coinbase and Coinmarketcap that require internet connection. Due to the threat of central bank regulation or bans, most African media outlets have avoided promoting crypto awareness.
With the internet becoming a primary source of information for many people on the continent, if cryptocurrency companies develop in Africa, the internet connection rate needs to improve dramatically, which is far from the case at the moment. Only 22% of the continent has access to high-speed internet, which is a significant problem considering how reliant African countries are on cell towers. 91% of cell phone users must use 2G or 3G networks, which are outdated 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?
There are many internet users living on the African continent who cannot access the internet due to the lack of broadband connections. By using blockchain technology, 3air has ambitious plans to provide trouble-free connections in Africa.
In late 2021, 3air partnered with K3 Telecom to bring people in Africa easy access to broadband. The partnership allows the telecom operator to expand its “K3 Last Mile” initiative, which provides Internet connectivity to regions with poor network coverage. 3air promises a blockchain-based internet software interface. The physical infrastructure would include mobile base stations capable of serving 15,000 users at super-speeds of 1 Gbps per user, more than 100 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 connect via transceivers found in homes and buildings. These transceivers are tiny, highly effective, rugged and easy to install, making them inexpensive and practical for city-wide deployments, according to 3air. Each base station consumes 500W of power, which does not affect the local environment.
With increased access to high-speed internet, 3air hopes more people will have the opportunity to learn about and embrace cryptocurrencies. 3air hopes that increased access to the Internet will close the digital divide and enable a level playing field in economic opportunities. Africans who are unbanked or unbanked have flocked to cryptocurrency as it is decentralized and able to retain its value. 3air aims to bring internet access to everyone in Africa so they can take advantage of digital currencies.
What is the future of cryptocurrencies in Africa?
Africa offers a unique opportunity for new technologies and innovations, including cryptocurrencies. The continent has a young and growing population that is increasingly tech-savvy. With the right infrastructure and education, there is excellent potential for cryptocurrency adoption in Africa.
Cryptocurrencies would be hugely beneficial for Africans. They are decentralized and perfect for countries with unstable economies or currencies. In addition, cryptocurrency can be used to send money abroad without any fees.