Kenyans Lead in Peer-to-Peer Crypto Trade Globally

Kenyans are trading cryptocurrencies directly with peer-to-peer transactions (P2P) more than elsewhere in the world, according to Chainalysis, Global Crypto adoption index 2021.

The citizens of other African countries also cut jumping on the opportunity to cushion remittances and cross-border businesses from costly transfers and the risk of weakening currencies. Consequently, the internet-savvy Kenyans are leading the world when it comes to using digital currency platforms where individuals trade amongst themselves.

According to Chainalysis, Global Crypto has ranked Kenya well ahead of the other 154 countries surveyed. Also surprising the country ranked highly in this segment are Togo (2), Tanzania (4), and Ghana (10). A widespread person-to-person crypto trade has also been recorded in Nigeria (18), with South Africa ranked 62nd. The trend is believed to have been partly influenced by the danger of weakening African currencies due to a resurgence of the deadly virus in Delta Variant, which has jolted efforts to re-open economies.

“Many emerging markets face significant currency devaluation, driving residents to buy cryptocurrency on P2P platforms in order to preserve their savings,” – according to the report.

Kenya’s currency has depreciated by 6.3 per cent against the US dollar since January, according to the Central Bank of Kenya data. Elsewhere Nigeria is one of the countries that have witnessed a depreciated currency of 5.6 per cent against the US dollar since January, according to the Nigeria apex bank. However, there has been no significant sell-ff amongst Africa currencies in 2021, with the South African Rand relatively unchanged between January 1 and August 1 after strengthening in June. That suggests that where Africa is concerned, users might be turning to P2P platforms to more efficiently and cheaply make international transactions; international money transfer costs are notoriously high in Africa, while traders are often limited.

“Cryptocurrency gives those residents a way to circumvent those limits so that they can meet their financial needs,” – said the reports.

The index shows residents in emerging economies moving smaller, retail-sized payments under 10,000 US dollars worth of cryptocurrency for international transactions to facilitate individual remittances and purchase of goods to import and sell. The ranking did not share the absolute trade volumes per country but based its listings on transactions data supplied by two of the largest and most popular P2P platforms, LocalBitcoins and Paxful.

“While this means that we aren’t capturing all P2P value, we believe these two exchanges are popular enough for their metrics to acts as an overall approximation,” – says Chainalysis.

Regarding the overall adoption of cryptocurrencies per country, Kenya and Nigeria are also at positions 1 and 2 in Africa, respectively, ranked 5th and 6th globally. The latest data from Chainalysis shows usage of cryptocurrencies globally rose by over 880 per cent in 2020, primarily driven by transactions on peer-to-peer platforms in emerging markets.

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