Chainalysis report reveals that the Sub-Saharan part of Africa has the lowest crypto transaction volume for any region the platform has studied. From July 2021 and June 2022, the area recorded a transaction worth over $100.6 billion.
Nigeria And Kenya Pushing Crypto Usage In The Region
The crypto transaction volume recorded from July last year to June 2023 in Sub-saharan Africa represents 2% of worldwide crypto activity. However, these numbers could be misleading.
A deeper analysis shows that Africa has one of the most developed crypto markets in the world. Moreover, most people have integrated crypto usage into their financial activities.
According to Chainalysis’ Global Crypto Adoption Index, Nigeria ranked 11th while Kenya ranked 19th. Assessing both nations based on population and purchasing power, they have strong crypto adoption.
This is evident in P2P exchanges that have helped develop the crypto economy in this area. One feature that makes this Sub-Saharan Africa unique is the retail market’s increased use of P2P crypto platforms.
Retail transactions of less than $10,000 account for 6.4% of the total volume of transactions, more than any area. This role becomes magnified by looking at individual transfers, which account for over 95% of all crypto transfers.
Furthermore, the report stated that several young individuals are turning to crypto to build and preserve their wealth. This is different from torn regions, where people use crypto to increase their existing wealth.
Most Nigerians Turn To Crypto To Survive – Owonibi
According to the founder of Convexity, a blockchain consultant firm, Adedeji Owonibi, most people in this region see crypto trading as a way to survive. Owonibi said that institutional traders are very few in the area.
Hence, retail traders are the ones pushing the market. Also, most of the unemployed graduates in Nigeria have switched to crypto to make ends meet.
Another point that Owonibi mentioned is the volatility of the Nigerian Naira, which has pushed several individuals into crypto investment. Most people have converted their wealth into stablecoins, such as Tether.
According to Chainalysis, most users in the region have embraced crypto out of necessity. The number of retail transfers in Sub-Saharan Africa grew when the bear market started in May.
Since most of these people are trading out of necessity, the latest price drops will not deter them from trading. Besides, those trading stablecoins will not be affected by market fluctuations.
Another finding that Chainalysis repeated is the high usage of P2P platforms. According to the report, P2P exchanges are responsible for over 6% of crypto transaction volumes in Africa. This is twice the number recorded by the next-closest region, Oceania and Central & Southern Asia.
Paxful CEO Expects Ghana’s Crypto Adoption To Increase
Ray Youssef, the CEO of Paxful, stated that Ghana is another country that would Nigeria’s level of crypto adoption. This is based on their present growth rate.
Youssef stated that most Nigerians visit Ghana to teach the people about crypto. Moreover, Paxful’s trading volume has increased in Ghana by over 100% in the past year and 400% in the past two years.
This aligns with Chainalysis data which shows that Ghana and other countries in Sub-Saharan Africa have witnessed huge crypto adoption.
Despite the ban on crypto in Nigeria in 2021, most users went underground and kept communicating with potential buyers and sellers using social media platforms. Owonibi and Youssef added that crypto usage for remittances and commerce has also increased the usage of crypto in the region.
Additionally, Chainalysis noted that crypto adoption and usage in Sub-Saharan Africa would continue to grow. Crypto would only have to keep providing solutions to people’s financial difficulties.
One way crypto is helping the people is by allowing them to conduct cross-border transactions, especially in regions with strict financial restrictions. Crypto also helps them to shield their wealth against economic volatility.