Sub-Saharan Africa accounts for the least cryptocurrency transaction volume of any region with only 2% of global activity, the latest 2022 Chainalysis cryptocurrency geography report has shown.
However, a deep dive into the data reveals that small retail crypto transactions under $1,000 accounted for 80% of total transaction volume in Africa between July 2021 – July 2022 – more than any other regional globally.
This proportion is the most out of the 8 global regions analyzed even though it is clear that transactions below $1,000 represent the majority of transactions that crypto users are doing in every region analyzed.
Africa’s total transaction value within that period was $100.6 billion, accounting for 2% of global transactions, with African users preferring small transaction sizes, and retail use, over institutional transactions.
Retail-sized transfers below $10,000 USD make up 6.4% of its transaction volume, more than any other region. – Chainalysis
The report goes on to add that retail transfers represent 95% of the total crypto transaction volume occurring on the continent.
Chainalysis conducted interviews to help clarify the data they determined on-chain, leading the research firm to conclude that many Africans are everyday retail users who are looking to find profit by doing daily transactions. Here is what Adedeji Owonibi, a blockchain expert in Nigeria, of Africa’s largest markets indicated:
We don’t have big, institutional-level traders in Sub-Saharan Africa. The people driving the market here are retail. Nigeria has a ton of highly educated young graduates with high unemployment rates, no jobs available – crypto to them is a rescue. It’s a way to feed their family and solve their daily financial needs. – CEO, Convexity
Nigeria leads the region in P2P activity where users get to trade directly with each other, to support several other uses.
P2P exchanges account for 6% of all cryptocurrency transaction volume in Africa, more than double the share of the next-closest region, Central & Southern Asia and Oceania. – Chainalysis
The 4 use cases driving crypto growth in Africa include:
Here are more stats from the report:
- Nigeria recorded a 55% year-to-year growth of remittance users on Paxful, one of the major P2P exchanges on the continent
- In the same period, Kenya recorded 140% growth in remittance users, according to Paxful CEO, Ray Youssef
- Ghana is catching up as a leading P2P player having grown total transactions by 100% in the last year, and 400% in the last 2 years
- Cameroon has also been highlighted as a market expected to see substantial growth in Africa in the coming year
Are Ghana🇬🇭 and Cameroon🇨🇲 the next P2P markets in Africa 🌍? @chainalysis pic.twitter.com/4ZbnUse5X5
— BitKE (@BitcoinKE) October 1, 2022
The growth of P2P has been encouraged by bans, such as the one imposed by the Central Bank of Nigeria in February 2021, prohibiting banks from enabling crypto transactions.
Despite the heavy trading on these exchanges, many Africans are believed to be transacting larger volumes on untracked channels such as Telegram and Whatsapp groups where they trade with individuals from Africa, and across the world.
South Africa has been described as leading in raw transaction value of Sub-Saharan countries despite not making it t to the top 20 of Chainalysis global crypto adoption index. Nigeria is ranked 9th and Kenya 19th.
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