A recent analysis of global cryptocurrency transactions by Chainalysis sheds light on the unique nature of Sub-Saharan Africa’s crypto market, which represented just 2% of global activity between July 2021 and June 2022.
For example, although large transactions fueled by investors and financial institutions helped Western Europe and North America account for around 20% each of the total transaction value in that period, when it comes to retail transactions, Sub-Saharan Africa demonstrates significant adoption.
In fact, by value, retail transfers below $10,000 make up 6.4% of the region’s transaction volume, more than any other region globally.
The role of retail becomes even more apparent when looking at the number of individual transfers, which made up 95% of all transfers in sub-Saharan Africa. And of those, transactions valued under $1,000 accounted for 80% of all crypto activity in the region by the number of transactions.
As a result of the penetration of cryptocurrency into everyday commercial transactions, three African countries make the top 30 in Chainalysis’ Global Crypto Adoption Index: Nigeria, Kenya and South Africa, which ranked 11th, 9th and 30th, respectively.
In a recent interview with PYMNTS, Owen Odia, Nigeria country manager at global cryptocurrency business Luno, said that Nigerians’ appetite for crypto was fueled by three factors; an interest in currencies like bitcoin as a speculative investment, the possibility of using crypto to hedge against inflation, and using it to make international payments to merchants that don’t accept the local naira currency.
Watch Odia’s interview: Emerging Market Consumers Lukewarm on Value of CBDCs
Nigeria’s crypto-powered retail sector benefits from incoming transactions too, thanks to FinTechs like Lazerpay, a Nigerian crypto payment gateway startup that helps businesses accept crypto payments from anywhere in the world.
With Lazerpay, African merchants can sell to international customers without those customers needing to transact in local currencies or accrue foreign exchange fees. Its users can then cash out in stablecoins or one of several fiat currencies, including the naira or Ghana’s cedi.
Other African companies making moves in the space include Johannesburg-based firm VALR, Kenyan FinTech Bitpesa and Yellow Card, a pan-African cryptocurrency exchange that this month closed a $40 million Series B funding round to fuel its expansion across the continent.
Watch VALR CEO interview: Crypto Seen as Africa’s Cross-Border Payments ‘Game Changer’
Also related: Crypto Exchange Yellow Card Raises $40M to Expand
Catering to Africa’s preference for mobile money, Yellow Card even allows users to fund their accounts via USSD transfer, setting the stage for the continent’s mobile money and crypto payment networks to become further integrated.
For James Mwangi, the CEO of Kenya’s largest lender, Equity Group Holdings, digital currencies can even enhance the mobile money system, if regulators come on board.
“Africa will benefit substantially from leapfrogging on the fourth industrial technologies, and cryptocurrency is one of them. Cryptocurrency can as well complement the mobile money wallet, but essentially, we need to talk to the regulators,” he told a conference audience recently, per PYMNTS.
Read more: Kenyan Financial CEO: Crypto Could Enhance Mobile Money
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