Africa makes up the largest share of retail crypto volumes of transfers under $10, 000 than any region globally, according to the upcoming September 2020 Chainalysis report.
A significant share of these transactions is taking place between Africa and East Asia, particularly for business purposes.
The report has been compiled by Chainalysis, the largest and most recognized blockchain analysis and data company that works with exchanges, financial institutions, and government agencies, including the United States, and in other countries.
Here are some stats from the upcoming report:
- Volatile fiat currencies, especially in Nigeria, South Africa, Egypt, and Ghana are driving crypto remittances
- The higher the level and rate of currency devaluation per country, the higher the P2P trading volumes in those countries
- $8.1 billion was sent on-chain in the last year across Africa with $ billion received
- When native currency loses value, P2P trading volumes rise soon after
- Binance accounts for the largest portion of African crypto volumes (70%) due to liquidity and variety in trading pairs
- LocalBitcoins accounts for the largest crypto value in Africa
- Monthly crypto transfers below $10, 000 jumped up 55% in one year
- Number of monthly transfers rose by half to over 600, 700
- Nigeria crypto transfers totalled nearly $36 million in June 2020
- Nigeria crypto transfers jumped nearly 50% to 120, 00 transactions by June 2020
- Eastern Asia accounts for the largest crypto transfers to Africa with over 15, 000 transactions
- The top 10 largest crypto services in Africa have seen their overall activity and market share grow from 66% to 78% in one year
Despite Africa accounting for the smallest crytocurrency economy of any region, the report shows that this small amount of activity is nevertheless creating life-changing real value to users across the continent.
Some of the reasons cited for this value-add include:
- Economic instability hedging
- Low-fee remittances
- Saving alternatives
The report highlights remittances as an early use case for the developing economics across the continent with roughly $562 million worth of cryptocurrency transferred directly from overseas addresses to the ones based in Africa in retail-sized payments.
Most of these remittances are coming from North America, Western Europe, and East Asia, regions that have the highest concentrations of African migrants.
A recent report by Reuters showed how Nigerian businesses are using bitcoin to purchase supplies from China and United Arab Emirates enabling them bypass the need for buying dollars or using money-transfer firms.
Below is a breakdown of countries fueling Africa’s cryptocurrency use between July 2019 – June 2020:
- South Africa – Over $800 million
- Nigeria – Over $600 million
- Kenya – Over $400 million
Crypto exchanges across the African continent continue to report high transaction volumes and impressive growth numbers which points to quiet boom in crypto adoption.
NB: This blog is an excerpt from the Chainalysis 2020 Geography of Cryptocurrency Report. We will share the full report once it drops in September 2020
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