Sub-Saharan Africa is the region in the world with the smallest crypto economy, accounting for 2.3% of global transaction volume between July 2022 and June 2023. However, Bitcoin (BTC) is largely dominant in countries that are located in the of the African continent located south of the Sahara Desert.
As Chainalysis revealed in its latest report on the global crypto economy, although Sub-Saharan Africa is one of the smallest cryptocurrency markets, a closer look reveals that cryptocurrencies have penetrated major local markets and become an important part of everyday life. of many residents. The highlight is Bitcoin, the most traded cryptocurrency in the region:
“In no region is Bitcoin more dominant than Sub-Saharan Africa. After all, the world’s first cryptocurrency represents a larger portion of transaction volume there than in any other region,” highlighted Chainalysis.
The graph below shows Bitcoin’s share of regional transaction volume. In Sub-Saharan Africa, the percentage is the highest of all: 9.3%.
As justification for this broad dominance of Bitcoin, Chainalysis indicated that it may be that residents of Sub-Saharan Africa are turning to “digital gold” as an alternative store of value:
“Many countries in the region have been struggling with rising inflation and debt. This has made cryptocurrency an attractive means of storing value, preserving savings and achieving greater financial freedom.”
Bitcoin Adoption in Sub-Saharan Africa
Also according to the report, between the months of July 2022 and June 2023, the region received around US$117.1 billion in cryptocurrencies. This equates to 2.3% of global transaction volume as mentioned.
Across the region, during the period studied, centralized exchanges are the most used type of platform. These platforms intermediated more than half of all transaction volume.
Additionally, the report noted that the Sub-Saharan African cryptocurrency market also appears more retail-oriented than most other regions. This is because a greater portion of transaction volume comes from trades under $1 million in value compared to most other regions.
A more detailed analysis shows the adoption of cryptocurrencies in Sub-Saharan African countries. Nigeria, for example, ranks second overall in the Global Cryptocurrency Adoption Index. At the same time, it leads the region in gross transaction volume.
Next, other countries in the region that rank highly on the index include Kenya (21st), Ghana (29th) and South Africa (31st).
Migration to stablecoins
Despite Bitcoin’s broad dominance in the region, local experts have noted that some players are turning to stablecoins due to the volatility of the market’s largest cryptocurrency.
“Now that Bitcoin has lost much of its value, there is a desire to diversify between Bitcoin and stablecoins. However, changes in the market are not dampening activity. People are constantly looking for opportunities to protect themselves against the devaluation of the Naira and the persistent economic decline since COVID,” highlighted Moyo Sodipo, co-founder of Nigeria-based cryptocurrency exchange Busha.