Cryptocurrency is basically, a digital currency based on an innovative technology called the blockchain. Its users range from small businesses to process payments, financial tech-based startups, and retail consumers that use it to send money across border and as an investment asset.
Since crypto assets like Bitcoin and its contemporaries, also known as altcoins, have been gaining high acceptability and in high use around the world for payments, investing and banking,
Such that the total daily trading volume of bitcoin,which is the most popular cryptocurrency, is around $38.68 billion and market capitalization touching $123.12 billion on 4th April 2020.
Many Africans largely use cryptocurrencies like Ethereum, Ripple, Bitcoin, and Litecoin for applications in banking, making payment transfers
There are numerous causes for the surge of cryptocurrencies usage in the continent but unreliable local currencies could be a major factor among other rationales
High uncertainty of economies in most part of Africa makes cryptocurrencies, a viable medium for asset management in lieu of storing its value in most cases
For Individuals and startups, it is a better approach in transferring funds to anyone in the world for paying remittance, suppliers, e-commerce shopping, to and from friends and family members based overseas, as it cost very low charges than many commercial banks in Africa which charge excessive fees in unstable currency markets and unreliable economic ecosystem.
Consequently, many Africans in urban areas have relative access to Internet access via mobile penetration and such platform have made the adoption of cryptocurrencies accessible to everyone through mobile
Financial tech-based startups which are very disruptive in Africa is using crypto-assets for new technologies like mobile money.
They are also experimenting with Blockchain and cryptocurrencies in simplifying their processes across African borders and globally. Many of such startups have built blockchain apps, crypto exchanges, and money transfer services for the needs of the average African
Furthermore, a lot of African businesses and startups are now accepting and paying in bitcoins, XRP, bitcoin, bitcoin cash in reaching global suppliers and buyers.
This has been made easy for many Africans by a growing number of disruptive payment gateways and exchanges based in Africa and around the globe, they include Payfast, Gemini, Coinbase, Luno, Bitpay, Bitstamp, Bithumb, Binance, and many others
Luno Exchange a South African based company is the leading crypto exchange in Africa was established in 2013. It has more than a million customers in over 40 countries worldwide and it’s the first crypto exchange to be based in Africa with a presence in Nigeria and South Africa, offering ZAR/BTC, NGN/BTC crypto trading pairs.
Meanwhile, there are some notable crypto-based transfer services such as London-based Kobocoin working in Nigeria.
Crypto assets such as Bitcoin was created after the global recession of 2008 with an intention of a decentralized currency with transparent and controls to consumers advocating for low transaction cost, better security and easier access to its medium of choice
In Nigeria is the largest ecosystem in Africa, its use and trading are still unregulated by the government. Nigeria’s central bank has declared cryptocurrencies as being non-legal tender.
However, the use of cryptocurrencies has not been banned entirely in Nigeria. It was reported that Nigeria’s Securities and Exchange Commission set up a committee in 2019 to create a framework for the regulation of digital assets and local crypto exchanges in Nigeria.