In recent years, Africa has been one of the most active regions in the cryptocurrency industry. The continent is home to several exchanges, startups, and initiatives pushing cryptocurrency innovation forward.
Most of sub-Saharan Africa’s population is relatively young, 70% under 30 years old, which is critical for cryptocurrency and blockchain innovation in Africa. It makes Africa an ideal birthplace for innovative technologies, including cryptocurrencies. Africa has a history of embracing new technologies, with mobile money being used across the continent.
Role of crypto in Africa
Even though Africa gets just 2% of the global cryptocurrency market, its rapid growth will revolutionize finance in a more digital and urban sub-Saharan continent. Africans received $105.6 billion in cryptocurrency during the one year from July 2020 through June 2021, according to Chainalysis, a blockchain data firm. According to Chainalysis, Kenya, South Africa, and Nigeria are among the top ten countries for cryptocurrency usage.
The beauty of cryptocurrency is that it permits decentralized P2P lending, allowing everyone from all economic strata to succeed by providing more financial alternatives to underserved consumer demographics. Cryptocurrencies have the potential to address several economic issues in developing countries, including expanding access to finance for micro, small, and medium-sized enterprises (MSMEs), making remittance sending easier, and providing an alternative currency.
According to Chainalysis, in 2020, $562 million worth of cryptocurrency was utilized for remittance payments in Sub-Saharan Africa—or 14% of the overall $48 billion sent. Because cryptocurrencies have made low-cost mortgages feasible, people who couldn’t get credit because of irregular income sources can now access it.
Factors preventing people from adopting cryptocurrency in Africa
To accept Bitcoin as a viable currency, one must recognize its value worldwide, a truly decentralized asset that populations may utilize to move and store value securely. Because of a lack of regulation, trust, big regulatory agencies restricting digital currencies, and a scarcity of cryptocurrency education, many African nations are lagging behind, despite the aforementioned booming adoption rates in some others.
There is currently no formal educational institution for cryptocurrencies in Africa. A few key players, such as foundations and individuals, have emerged to offer training, but it isn’t nearly enough to place Africa on the international map as a cryptocurrency leader.
Africans use popular social networking sites such as YouTube, TikTok, Twitter, and Facebook to learn about digital currencies like Bitcoin. They may also find helpful information on the subject from books, blog articles, or materials provided by crypto platforms such as Binance, Coinbase, and Coinmarketcap, which require an internet connection. Because of the threat of central bank regulation or bans, most African media firms have avoided promoting crypto awareness.
With the internet becoming a primary source of information for many individuals on the continent, the internet connection rate must improve dramatically if cryptocurrency businesses develop in Africa, which is far from true now. Only 22% of the continent has access to high-speed internet, which is a significant problem considering how much African countries rely on mobile towers. 91% of mobile users need to use 2G or 3G networks, which are outdated by today’s standards. One blockchain startup, 3air, is working on a solution to the continent’s internet problem.
How can 3air help fast-track crypto adoption in Africa?
The African continent is home to many internet users who cannot access the web due to a lack of broadband connectivity. By leveraging blockchain technology, 3air has ambitious plans to provide fault-free connections in Africa.
In late 2021, 3air partnered with K3 Telecom to provide people in Africa with easy access to broadband. The partnership allows the telecommunications operator to expand its “K3 Last Mile” initiative, which provides internet connectivity for regions with low coverage. 3air promises a blockchain-based internet software interface. The physical infrastructure would include mobile base stations with the capacity to provide 15,000 users at super-speeds of 1Gbps per user, more than a hundred times faster than what current mobile internet providers offer.
Cities will feature connected base stations, with at least one station linked to the internet. Users will connect via transceivers that may find in homes and structures. These transceivers are tiny, highly effective, sturdy, and simple to install, making them cost-effective and practical for citywide usage, according to 3air. Each base station consumes 500W of power, which won’t affect the local environment.
With increased access to high-speed internet, 3air hopes more people will have the opportunity to learn about and adopt cryptocurrency. 3air hopes that increased access to the internet will close the digital divide and allow for a more level playing field regarding economic opportunities. Africans who are unbanked or underbanked have flocked to cryptocurrency since it is decentralized and can keep value. 3air aims to provide everyone in Africa with access to the internet so that they may take advantage of the benefits that digital currencies provide.
What is the future of cryptocurrencies in Africa?
Africa presents a unique opportunity for new technologies and innovations, including cryptocurrencies. The continent has a young and growing population that is increasingly tech-savvy. With the proper infrastructure and education, there is excellent potential for cryptocurrency adoption in Africa.
Cryptocurrencies would be enormously beneficial for Africans. They are decentralized and perfect for countries with unstable economies or currencies. In addition, cryptocurrency can be used to send money overseas with no fees.