Bitcoin and Crypto Adoption in Africa on the Rise
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Bitcoin casinos have been on a roll in Nigeria and throughout Africa too. Young people on the black continent love to play games and obviously love crypto, so crypto casinos were a match made of heaven.
Of course, it’s not just casinos that have led to the widespread and sudden crypto adoption in Africa. Growth in remittances, currency devaluations, and widespread Internet access have all played a role too. And, while there are challenges to overcome, it seems that the trend isn’t stopping any time soon.
What Fuels Africa’s Crypto Growth?
Remittance growth is one of the major reasons why young Africans are adopting crypto. Reports from the World Bank say that it’s much costlier to send money in Sub-Saharan African than any other region. The global average rate is 6.8% per transaction, but for Africa, it’s 8.9%. In 2019 alone, remittances to sub-Saharan Africa were close to $48 billion, with Nigeria receiving almost half of it at $23.8 billion.
According to studies, remittances alleviate poverty in low to middle-income countries. It also improves nutritional outcome and has been linked to higher spending on education. A sharp decline in remittance affects families’ ability to spend money in these areas which results in poorer quality of life.
That doesn’t happen with Bitcoin and crypto, so it’s quite obvious why Africans love it. Nigerians prefer to use cryptocurrencies to send money abroad. Sending remittances through Bitcoin platforms costs almost nothing compared to what banks take. Currency conversion fees and bank fees are also avoided, so it’s no wonder that crypto adoption in Africa is on the rise.
Inflation and currency devaluation have also played their parts in the increasing Bitcoin and crypto adoption. Nigeria, Ghana, Zambia, and South Sudan have been struck with skyscraping inflation rates recently. Not surprisingly, the biggest crypto economies are in these countries, with their youth using Bitcoin and cryptos in general as a much safer way to make transactions.
Still Challenges to Face
The crypto adoption trend in Africa might not isn’t set to stop anytime soon. However, there are still obstacles it needs to pass before cryptos can also be accepted by African governments.
That right there is the biggest challenge. African banks have been adamant that Bitcoin and cryptos are not legal tender – that much has been clarified several times. There’s literally no safety valve for African players if they lose their crypto account. Plus, most conversions are done by informal brokers which can be shady.
Financial scams and the bubble theory are two other major challenges. The youth in Africa is interested in crypto because of sky-high potential returns, but this also makes them fall into the trap of many scams.
Plus, the volatility of Bitcoin is another big problem, adding to the list of obstacles in African for widespread crypto adoption.
