Between July 2020 and June 2021, Africa’s
cryptocurrency market grew by 1,200 percent – making up for a whopping $105.6
billion (roughly Rs. 775 crores), a recent report by Chainalysis said.
Kenya, Nigeria, South Africa, and Tanzania all
rank among the top 20 countries on the Global Crypto Adoption Index, and
together, the African nations represent the third most rapidly growing
cryptocurrency market in the world.
The report also noted that the bulk of these
crypto transactions aren’t driven by large institutional investors, but instead
small and medium-sized retail buyers and businesses.
As per the report by market research firm
Chainalysis, Africa records plenty of smaller transfer sizes indicating higher
adoption of cryptocurrency trading at the grassroots level.
“Cross-region transfers also make up a bigger
share of Africa's cryptocurrency market than any other region at 96 percent of
all transaction volume, versus 78 percent for all regions combined,” the report
said.
The study further observed that facilitating
crypto payments using peer-to-peer (P2P) platforms is more popular in Africa,
as compared to other countries.
P2P platforms are online investment gateways
that enable borrowers to attract lenders to identify and purchase loans that
meet their investment criteria. Using these platforms, Africa-based crypto
buyers and investors get into trading in digital currencie.
“Some countries, such as Nigeria and Kenya,
have made it difficult for customers to send money to cryptocurrency businesses
from their bank accounts, either by passing laws or simply by advising banks
not to allow these transfers. However, this isn't an issue for P2P platforms,
which are non-custodial and let customers trade cash for cryptocurrency amongst
themselves,” Chainalysis explained.
For now, Vietnam, India, Pakistan, and Ukraine
are sitting at the top four ranks of rapid crypto adoption. The rate of
cryptocurrency adoption rose by 880 percent in 2020 in these regions, a report
released earlier this month had claimed.
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