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- Africa’s cryptocurrency adoption rate is massive as it continues to be a huge player in trading and investing activities
- A mobile-native population which is bound to use 690 million smartphones by 2025 has the potential to gain supremacy in the crypto space
- The adoption of innovative technologies and an efficient education system will pave the way for a bright future
Digital currencies have been adopted by citizens across the world and Africa is not far behind. Nigeria was the second-largest Bitcoin trader in 2020 which is evident that the environment is evolving at a brisk pace. Moreover, South Africa is also a competitive country in terms of allowing the use of cryptocurrency among its citizens.
Luno, formerly known as BitX, was launched in South Africa and added one million new customers to its platform last year. Marius Reitz from Luno believes that regulations in the crypto space will lead to early adoption among investors.
Adoption is a smooth and on-going process
The demographic trends and economic welfare of sub-Saharan African countries have led to the adoption of cryptocurrencies as a means of payment. Rising inflation has led to significant devaluation of domestic currencies. Luno made the first move and allowed investors to trade and invest in cryptocurrency via the local currency. It led to a safe, secure and easy medium of payment.
Reitz was concerned that the unique opportunities present in Africa might soon be exploited with illicit activities as it continues to remain an unregulated market to a certain extent. Expats sent back approximately $48 billion to their families in Africa according to a World Bank report. The underbanked countries in the continent have potential to grow their economy via stablecoins and the adoption of decentralised finance.
Regulations to mould future investors interest
Luno has highlighted the importance of regulations and how it will pave the way ahead for investors. Scammers and illicit activity dealings have increased as market watchdogs have become more vigilante. The Central Bank of Nigeria issued a regulatory notice that all financial institutions will have to put on hold the on and off-ramp crypto services.
Institutions like Luno are working closely with market operators to allow for a smoother adoption and creating awareness among the masses. The Intergovernmental Crypto Assets Regulatory Working Group has been on the regulatory front for quite some time making withdrawal and deposit services even more safe and easier.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
