The number of users of bitcoin is growing worldwide, including in Africa. Although the size of the African bitcoin economy is small compared to other continents, the adoption of bitcoin among the common people is high. Peer-to-Peer platforms play an important role in this, partly due to bank regulations .

The bitcoin economy in Africa has grown rapidly in the past year. In total, more than $100 billion was sent to the continent via bitcoin, a 1200% growth from the previous year. In addition, the countries Nigeria, South Africa and Kenya are in the top 20 of the global crypto adoption index.

Adoption among common people

Compared to other continents or countries, the institutional adoption of bitcoin in Africa is disappointing. The common people, on the other hand, make a lot of use of the digital currency compared to other countries. Seven percent of bitcoin’s transaction volume in Africa comes from retail investors. This is higher than the global average of 5.5%.

Most of these transactions are done through peer-to-peer platforms. These are websites or apps where individuals trade bitcoin directly with each other, no traditional financial institutions such as banks are involved. Examples of such platforms are LocalBitcoins and Paxful.

The popularity of such platforms is due to new laws and regulations in some countries. Governments and central banks in Nigeria and Kenya, for example, have banned customers of commercial banks from transacting money with trading platforms. This has made it more difficult for many people to buy bitcoin. The use of platforms where individuals without a central party find each other to buy and sell the digital currency is a suitable alternative.

Africa & Bitcoin

Due to the often financially unstable situation in African countries, the use of bitcoin in the continent is on the rise. The digital currency is available to anyone with a telephone and an internet connection. Moreover, the transaction costs for sending money with traditional financial institutions are high, often around 8%. With bitcoin this is a lot less. It is therefore a widely used way to receive and send money from abroad. The people of Nigeria receive about $20 billion a year, often from Europe or North America.

In addition to transfers from abroad, bitcoin is also increasingly used by African companies as a means of payment. Because paying with local fiat currency can be difficult due to legislation, bitcoin is increasingly being used as an alternative. Particularly when it comes to relatively large transactions. For example, the government of Nigeria has banned debit card payments above $500 dollars abroad.

Finally, bitcoin is used in Africa as a means of savings. Due to the large amount of money printed by central banks, the purchasing power of local currencies in Zimbabwe, for example, is falling sharply. Despite the volatility, Bitcoin offers a solution for many. The reason for this is the scarce nature of the coin. Read more about that here.

Bitcoin adoption is different all over the world. For example, read about El Salvador here or about Ukraine here.