With massive crypto adoption happening across the African continent, there has been this assumption that Africans are interested in crypto because they want to become rich.
After all, Africa has been known as the dark continent for many years, and cryptocurrencies represent an opportunity to change that narrative.
However, that may not be the reason Africans are flocking to crpyto.
Paxful, the largest P2P bitcoin marketplace in Africa, has an established presence in Nigeria. According to the Paxful regional director for Nigeria, Nena Nwachukwu, many of the people trading cryptocurrencies in Nigeria can already afford basic services. Nena identified that cryptocurrencies are popular because they ‘give people financial empowerment.’
Strict regulations by Central Banks across the continent limit financial options for people in Africa.
According to Nena, for instance in Nigeria, it is not possible to use more than $400 USD on international e-Commerce services such as Amazon and Alibaba. With cryptocurrencies however, people in Nigeria can trade independently with each other, and even across borders with other people in Africa, and internationally.
GetCards, a Nigerian service that enables users to buy gift cards and shop from over 300 stores via crypto, solves this problem.
As a result, businesses and traders are using cryptocurrencies to make payments for imported goods, and to pay suppliers.
Besides, many Nigerians invest in cryptocurrencies to protect their wealth since the central Bank has a tendency to devalue the local fiat currency.
In 2020, the end-SARS protests in Nigeria was also another opportunity that increased crypto adoption. As financial services belonging to organizers of the protest were disrupted by authorities, they began to receive donations in cryptocurrencies instead.
For example, Feminist Coalition, one of the major supporters of the nationwide protests, raised $387,000 USD during the duration of the protests with 40% of the donations in bitcoin.
Twitter CEO, Jack Dorsey, even donated to the group.
With donations coming locally and internationally, the subject of crypto became more popular in tandem with the protests.
When the Central Bank in Nigeria banned financial institutions like banks from facilitating crypto transactions, it was misconstrued as a total ban. However, the announcement made more regular Nigerians curious about crypto. As a result, the actions of the government seemed to spur people on to the alternative.
Overall, it seems that crypto adoption in Nigeria, and the greater Africa, is largely out of a need to solve endemic problems that have plagued the continent for a long time.
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