Cryptocurrencies are experiencing a boom in Africa, where they are gradually adopted with Binance exchange leading the charge.
Crypto Adoption increasing within Africa
According to the latest report from Chainalysis, Africa has experienced an increasing surge in adoption of crypto assets. We already knew that the P2P transactions within the continent had significantly increased especially for Bitcoin.
However, the analysis also pointed out that the volumes from Africa remain comparatively low when compared with other continents which means that adoption is happening on an individual level.
“Africa has the smallest crypto economy of any region we analyzed, with just $8billion [in cryptoassets] received last year. But this relatively low activity is creating value that changes the game for users in the region, as they experience economic instability. “
The small transactions (less than $10,000) represents the individual nature of cryptocurrency adoption across the continent.
A significant number of users use cryptocurrencies to send funds from other parts of the world to Africa. The services offered by P2P exchanges are also used for transfers from one African country to another. Finally, cryptocurrency mitigates against inflation and acts a buffer against the loss of value of local fiat currencies.
Binance claims the biggest market share
As expected the massive adoption of cryptocurrencies has attracted several centralized exchanges with Binance leading the charge. Binance has always had the highest number of users in the region but this number has widened since the start of 2020.
This increased userbase by the leading exchange comes as no surprise to industry insider Adedeji Owonibi of Nigerian based analytical firm A&D Forensics who believes that Binance had a well thought out plan when launching in Africa.
“When Binance came to Nigeria, it gave a lot of people the opportunity to buy and trade [crypto]. I was able to carry out crypto-fiat transactions that were previously inaccessible. They have more liquidity than other exchanges in the region, they recruit local community managers and they provide free rewards for people who sign up. “
The exchange has also made the right moves by adding key local currencies on its platform. About a year ago, Binance added the Nigerian Naira which was an excellent ploy to attract users from the country which currently has the highest number of crypto users in Africa.
More recently, the exchange announced the launch of a crypto-fiat payment application aimed at the market named Bundle. Binance therefore seems well positioned to consolidate its hegemony in the African market. Globally the exchange currently has a trading volume of $3 billion daily.