Africa the next battleground for crypto
Africa is set to be the next battleground for major crypto asset exchange, as the conditions on the continent are favorable for digital currency and as the leading economy, South Africa could lead the charge in this digital transformation.
However, the economic situation and high inflation in Africa could shape the local crypto markets and reason why the people on the second-most populous continent have been gaining an interest in crypto investments. South Africa in particular seems ready to ride the waves and thrive in the crypto world. The continent of Africa contains 54 countries the second-largest and second-most populated in the world only behind Asia in both categories and it is estimated to double its figure by 2050.
Therefore, in the world of traditional investment, Africa may not be bright spot unlike other continent, but economic growth has become increasingly noticeable. Data from the international Monetary Fund (IMF) shows that Africa’s real GDP is expected to have an annual growth of 3.6% this year- higher than the global growth forecast of 3.3%. The IMF also forecast that by the year 2023, Africa’s economic expansion will accelerate to 4.1%.
Africa’s growth prospects may appear lucrative for some investors; however, its due to inflation problems could hamper growth.
While Africa’s average inflation rate has been relatively contained and much lower than that of other developing economies, if observed over an extended period of time, certain inflation rates across the continent show high instability due to political and economic issues in countries such as Zimbabwe, South Sudan, Sudan, Liberia and Angola. The inflation rate in these countries can be as high as double or even triple digits.
When inflation rate is surges drastically, businesses are faced with challenge of appropriately pricing their goods, which significantly reduce consumer buying power. This is where Bitcoin (BTC) and crypto come in. According to the United Nations, the high inflation landscape plus improving economic situation have provided an ideal environment to foster crypto markets in Africa. According to blockchain experts, the UN’s Africa Renewal publication states that many African citizens use bitcoin as a tool to counter the hyperinflation in their country.
The report also says Nigeria, South Africa, Botswana, Ghana, Kenya and Zimbabwe were among the African countries that have the highest Bitcoin penetration rates, while other countries like Uganda were also seen gaining interest in cryptocurrency.
A very good example is the city of Lagos Nigeria, data from Google Trends shows that Lagos ranks as the number one city based on the volume of online searches for Bitcoin (BTC), while this data may indicate a high level of interest among the city’s approximately 21 million people.
Another example in South Africa a study that indicate 10.7% of internet users in south Africa own crypto, making the country the highest ownership rate of crypto users in the world a study from we are social and Hootsuite.
Therefore, some of the popular South African casinos springbok and punt casino are now accepting fund transfer coursed through Bitcoin and other crypto currencies.
However, a weak currency leads to high crypto ownership, while the strength of a country’s currency could add another dimension to the crypto development in Africa.
Crypto is the future and Africa must take full advantage of it.
Written by Adeleye Awakan
Associate/Editor www.gbc.ng Africa’s leading digital gaming magazine. For consultant on gaming in Africa, Marketing, PR, Advertising, and Thoughtful leadership article contact: [email protected]