Cryptocurrencies are taking over the world and changing industries at the same time. While most of the innovations have previously come from either US, China or Japan now this dynamic seems to be changing. Despite what may seem logical the adoption rate of these technologies aren’t necessarily the highest in the most developed countries. The rise of cryptocurrency and bitcoin has finally given the opportunity to the unbanked or those who don’t have access to traditional financial services can now access them from any device.
Cryptocurrencies and blockchain, in general, offer the transparency and accessibility of transactions that we’ve never experienced before, which is the main appeal of this technology for most countries. While some chose to embrace this technological revolution other seems to be resisting, fearing the possible negative consequences of the unregulated asset transfer systems. While China and the US are in a race to outsource each other and gain the technological edge, Africa has surfaced as one of the pillars of these technological innovations and has shown a surprising level of cryptocurrency and blockchain adoption.
While you would think that middle-lower income countries would shy away from such innovations the opposite proves to be true. Africa has shown one of the best adoption rates while also becoming a hotspot for Fintech startups. There are some countries that are doing better than the others, for example, Nigeria and Kenya are amongst the leaders in this field, with Kenya also leading in the forex industry and brokerage, as described here, so these countries are getting worldwide attention for their tech products as well.
Why Africa prefers crypto
As mentioned above, most of the African countries are either middle or lower income. The banking systems there, along with the authorities sometimes are not trusted by the people. The banking system that has its own flaws but what really attracted the majority of the attention to cryptocurrency is their inclusive nature.
While the banking systems all around the world tend to be exclusive of those usually with lower income and maybe lack of documents, it means that a large chunk of the population has never had access to the majority of the financial services that the privileged part of the world enjoys. What cryptocurrencies did for these counties above all bring these services and make them not only accessible but fee-free as well. This is why the adoption rate has been so high if we compare them to the number of cell-phones in the continent.
Cryptocurrencies provide these services in the most user-friendly fashion and give the people a chance to be a part of the technological revolution. The services that are just coming to Europe and the US, for example, Google Pay have long been a part of Africa’s everyday life. They have shown to be successful because they offer the services that other traditional financial companies there can not. But this trend isn’t necessarily new.
One of Africa’s most renowned creations is M-Pesa a mobile money platform that has been around for 10 years. This is a pilot scheme ran by Vodafone for Safaricom and Vodacom and is making billions in yearly revenue. So Africa is not a stranger to this technology.
The transparency factor
While the problem of the unbanked is somewhat universal, the problem that Africa faces much more frequently is corruption. People prefer being able to know what is going on with their assets and would like to have free access to it, even if it means a higher risk of identity theft, which present with all digital payments. Africa has dealt with the abuse of power from the government officials and the banking policies can be too harsh, so it’s hard to trust these authorities with their money.
One of the things that should be considered is that some countries in Africa even the ones that are leading the cryptocurrency revolution have very low credit card adoption rates. That is a huge reason behind the fintech boom in the continent right now while banks meanwhile are fighting hard against cryptocurrencies still.
While the US might want to take its time before it switches from the convenience of credit and debit cards to e-wallets and cryptocurrency Africa is looking for a solution to its everyday problems. Some countries will also benefit from crypto adoption because of high inflation rates o their own currencies. So, Africa has all the necessary motivations to focus on developing is crypto adoption and financial technologies.
Can Africa lead the crypto revolution
So far Africa has surpassed all the expectations placed upon it when it comes to fintech innovations so it’s not too far off to say that Africa is slowly becoming a hub of innovations. Considering the high adoption rates of these innovative technologies and considering the high interest from investors all over the world to finance these innovations and their adoption, it seems like Africa has the potential to become one of the leading countries in this movement.
A lot more companies are now setting up their cloud storage in Africa, They’re hiring local stand and are encouraging this trend on the continent. It is not too far off to say that Africa is already establishing itself as an innovator that also uses its financial technologies and can lead by real-life experiences. It’s easy to see why the interest in the local African Startups has been so high. The investors see the potential that these firms hold and don’t want to be left out of the equation.