Africa’s Cryptocurrency trading in the year 2020 has seen immense potential. In fact as per a Reuters report, the total number of cryptocurrency transactions in Africa have risen by almost 55%. Countries like Nigeria, South Africa and Kenya are the ones that contribute to Africa’s crypto transaction revolution. Back in June, the crypto analytic agency, Chainalysis reported that the crypto transfers individually and by small businesses in Africa rose by 40% and amounted to a total of $315 million.
Crypto Help the Small Businesses to get Hold of the US Dollar
Alexis Akwagyiram, the Nigerian bureau chief of Reuters explained the reason behind the growth of cryptocurrency trading. He said the main reason why crypto has grown popular because over the past few years the value of the fiat currencies have fallen down. Consequently, it has become a challenge for them to get hold of the US Dollar which is a global standard of currency. To cope up with the challenge, small businesses use bitcoin for their trades and services. By doing so, they not only get a wider exposure to the global trade systems but also get to interact directly with their business partners who are located in different parts of the world.
Cryptocurrencies Allow Smoother and Efficient Businesses
Generally, cryptocurrencies are easier to use which helps these small businesses to be much more efficient and smooth. Nigeria has recently seen a great uptrend in its crypto usage. To be precise, the country has reported a growth of over 55% with total number of crypto transactions amounting up to $120,000. The country’s economy is hugely dependent on oil reserves. And a few months ago, the economy crippled as lockdowns stopped many companies and industries and the low global crude prices went very low. Consequently, Nigeria’s fiat currency Naira lost its value. Hence in a country whose economy is unstable, cryptocurrencies can be of great help.
Cryptocurrencies in Africa are Still Unregulated
However, cryptocurrencies in many countries are still unregulated. The governments of the countries have still not passed any framework regarding the regulatory procedures of the crypto assets. Legality of such assets in the continent still requires clarity. Hence it is highly possible that these businesses may be exposed to frauds and scams. If any sum is lost in the process they may not have any right to complain or claim for the losses because of lack of a regulatory framework.
