In Africa and other developing nations, cryptocurrency use has increased. That is in line with a policy brief that UNCTAD, a United Nations organization, recently published. The populations of South Africa (7.1%), Kenya (8.5%), and Nigeria (6.3%) use these digital currencies in significant numbers. Bitcoin became legal tender in the Central African Republic in June.

Why is Africa a growing market for cryptocurrencies?

A significant section of the low-income population, which was previously disadvantaged financially, has come to accept cryptocurrencies. This group couldn’t access the majority of African banks. Even when they were, excessive transaction costs put off low-income account users.

Venture capital firms are increasing their investments in cryptocurrency startups as the use of cryptocurrencies in Africa rises.

Businesses That Act As Angel Investors

According to Nation, compared to the $127 million they raised altogether in all of 2021, African blockchain startups raised nearly three times as much money ($304 million) in the first and second quarters of 2022.

Throughout the first three months of 2022, several African cryptocurrency businesses got investments totaling $91 million in venture capital. To reach $213 million in the second quarter, the inflow rose by 134%.

Pan-African cryptocurrency exchange Mara and a Nigerian firm both raised $23 million and $10 million, while Congo-based Jambo raised $30 million and the South African exchange VALR raised $50 million.

Advancement of Blockchain Adoption

With a number of efforts, African nations are advancing quickly with the use of cryptocurrencies. Following the lead of other countries, the Central African Republic recently permitted the use of bitcoin as legal money.

In order to assist the businesses and entrepreneurs in the region using blockchain, artificial intelligence, and other cutting-edge technologies, Adrian Labs, a well-known Pan-African incubator project, has also entered the picture. Wave, a Senegalese business that specializes in digital payments, and Interswitch, a Nigerian startup, are two tech unicorns that have embraced blockchain technology.

Jelurida Africa launched the first-ever East Africa Blockchain Expedition last year to inform the populace about the benefits and advancements of blockchain and cryptocurrency.

Other organizations, including Emurgo Africa, the business arm of the Cardano Foundation, have actively financed a variety of educational and awareness-raising projects to speed up the adoption of blockchain technology and cryptocurrencies.

Although the continent still has the smallest cryptocurrency economy of any region, that relatively small amount of activity is creating life-changing value for users in the region facing economic instability, offering low-fee remittances and an alternative way to save.