African countries have huge potential when it comes to the crypto industry. Interestingly, two African nations are among the top eight countries of the Chainalysis crypto adoption index. This fact once more underlines the popularity of cryptocurrencies in Africa.
However, there are challenges as well. People should keep in mind that heavy-handed oversight could create problems for the local crypto industry.
Interestingly, Nigeria is the main driving force, as the country has the best result in 2020, with the weekly P2P volumes of $5 million to $10 million. Moreover, Kenya and South Africa also reached great results, with between $1 million and $2 million a week each.
Africa is the strongest growing region in 2020 for the P2P exchange Paxful. Notably, centralized exchanges also reported a spike in trade activity. For example, Luno reported $549 million worth of combined volume from Nigerian and South African customers in August. Thus, compared to the start of 2020, this number increased by 49%. Furthermore, the number of new customers rose by 122% from the fourth quarter of 2019 until the second quarter of 2020.
One of the major factors why the crypto became popular in Africa has to do with the notoriously exclusive local banking sector. Interestingly, crypto-assets gained popularity among Africa’s large community of workers who live abroad.
Crypto industry in Africa
According to Lagos-based BuyCoins exchange, people are trying to move money in and out of the country, and the exchange benefited from the situation.
However, the popularity of crypto attracted the attention of regulators. Several months ago, South African regulators proposed regulations that would impose strict licensing and monitoring requirements, without recognizing crypto assets as legal tender.
Moreover, last week Nigeria’s Securities and Exchange Commission proposed guidelines that would treat all crypto assets like securities by default.
Regulations are important, as without regulations it would be harder to develop the crypto industry. However, regulators should work with crypto-related companies and enthusiasts to come up with the best solution.