While Western Crypto Services Primarily Serve Hedge Funds, African Service Providers Cater to Online Merchants, Says 2020 Cambridge University Study

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The 2020 and 3rd global cryptoasset benchmarking study by Cambridge University is out and provides great insights into crypto use across the globe.

The report indicates that there are now over 101 million unique users of cryptoassets globally by the Q3 2020.

Among the users, the report indicates that while North America and European firms primarily serve cryptoasset hedge funds and traditional institutional investors, Middle Eastern and African service providers cater to non-retail clients with a focus on online merchants who make up 50% of their clientele.

SEE ALSO2020 CHAINALYSIS REPORT: A Breakdown of The 2020 Geography of Cryptocurrency Report with a Focus on Africa

Below is a detailed breakdown of the stats from the report as it relates to Africa:

  • Crypto service providers focus on online merchants who make up 50% of the clientele base
  • Less than 1 out of 3 companies operating in the region hold a license or registration
  • Only 1 out of 2 crypto accounts in the region have been KYC’ed – the lowest globally
  • Sudan is among the top 8 most restricted locations by crypto exchanges globally

  • The region accounts for the highest percentage in a lack of external audits globally at 31%
  • Small exchanges dominate the region with 47% of transacted volumes directed to external wallets
  • 40% of exchange volumes in the region have an internal order book vs 83% in Asia
  • The majority of firms in the region are less than two years old

  • The region holds the highest operational risk globally for increasing regulatory buden
  • The region holds the lowest operational risk for negative industry publicity globally
  • The region holds the highest operational risk due to difficulty of entering into banking relationships globally
  • The region holds the highest operational risk due to deteriorating banking relationships globally
  • The region holds the highest risk for miners globally due to unfavorable global regulation related to cryptoassets mining
  • The region holds the highest risk for criminal use of crypto assets globally
  • The region holds the highest risk for the emergence of Central Bank Digital Currencies (CBDCs) for miners globally – Over half vs the rest of the world
  • The region holds the highest risk for miners globally for having too many cryptoassets in the market

  • The region holds the highest risk for cryptoassets at 52% due to lack of insurance cover
  • The region holds second-highest sentiments on future developments for stablecoins after North America
  • The region holds the lowest sentiment on future developments for non-fungible tokens (ERC tokens) globally
  • Middle East and Africa account for only 4% of the Bitcoin hashpower
  • The region holds the highest operational risks for miners globally for halving, planned and unplanned protocol changes
  • The region accounts for the largest fiat-to-fiat transactions via crypto at 25%
  • The region accounts for the second-largest domestic payment transaction volumes after South America

  • The region accounts for the second-largest cross-border payment transaction volumes after South America
  • Retailers in the region make up 75% of the crypto assets customer base

  • Businesses and institutional clients make up 20% of crypto assets customer base in the region
  • In-house compliance teams make up 8% of company costs in the region vs 8% global average
  • The region accounts for 38% of independent crypto-asset reserves audits – the lowest globally

The report findings also suggest that the industry has entered a growth stage with regulatory dialogue supporting its growth by providing clarity and harmonization on the treatmnt of cryptoassets and related activities.

Check out the full report here.

 

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