Three Reasons Blockchain Is Exploding in Africa
On October 17th, Binance launched a cryptocurrency exchange in Uganda that will manage over a million transactions each second. Binance Uganda allows the deposit and withdrawal of shillings, the country’s currency. It also allows users to buy Ethereum and Bitcoin.
Kenya is planning on using blockchain technology to distribute government-issued housing to citizens.
Rwanda’s government is preparing to use blockchain technology to keep tabs on supply chains of the metal tantalum. The conflict metal is used in the manufacture of various electronics we enjoy today.
It appears that blockchain technology and cryptocurrencies are really taking off in Africa. Although America, South Korea, and China are seen as the leaders in the blockchain and crypto markets, people are saying Africa is next to shine.
Could it be that globalism is causing blockchain and crypto booms across the planet, and now it’s Africa’s time?
Perhaps. Perhaps not.
I think it’s much more complicated than that. Rather, I believe there are several factors exclusive to Africa that provide an answer.
Here are the three reasons we at Token Authority believe blockchain is exploding in Africa.
First, Africa’s various governments are helping blockchain and cryptos take off on the continent.
Governments in Africa are taking an uninvolved approach to cryptocurrencies. While they aren’t regulating, governments on the continent are advising against using cryptocurrencies.
This hands-off manner by African governments is creating a perfect environment for blockchain and cryptos to thrive.
With little to no government regulation, citizens can enjoy the exchange of cryptocurrencies without any worry of breaking laws. That in turn is making cryptos even more appealing, leading more people to take part.
Basically, governments in Africa are doing something by doing nothing.
Mobile Phone Use and Bad Banking
Believe it or not, mobile phone use is the second reason blockchain and cryptocurrency are blowing up in African markets.
For about 10 years, mobile phone use in Africa has skyrocketed. Millions of citizens have had their lives transformed due to mobile phones’ presence on the continent. Mobile use is so prevalent in Africa that people have easier access to cell phones than to electricity.
Africa as a whole is a very under-banked continent. According to Binance’s Benjamin Rameau, less than half of Sub-Saharan Africans above the age of 15 own a bank account.
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In response, citizens aren’t working with banks; instead, they’re just downloading and using banking apps on their phones. Citizens in Africa, some for the first time, are handling their money in an actual account, albeit a digital one.
Mobile banking has been so transformative on the continent that some people have managed to slip out of poverty.
These aspects, combined with Africans’ high mobile phone usage, are fueling the cryptocurrency industry. Cryptocurrency exchanges are appealing because, compared to traditional banks, they provide lower fees and transfers.
According to the World Bank, Sub-Saharan Africa is leading the world in mobile banking application use. About 10% of the planet’s mobile banking users come from the region.
Most importantly, inflation is assisting blockchain and crypto expansion in Africa.
In many parts of Africa, currencies have crazy inflation rates. On top of that, there are places where governments are really dropping the ball on managing their economies. South Sudan, Nigeria, and Zimbabwe are great examples.
To that end, people are using alternative ways of payment, such as bartering with one another.
But now there’s another option. People are starting to use cryptocurrencies.
Using cryptocurrencies, citizens in Africa could make transactions with anyone across the globe, not having to worry about how far their dollar, shilling, or other currency would stretch. No need to worry about crazy transfer fees and times, as cryptocurrencies offer a much faster and cheaper transfer.
The more African citizens make transactions with other parts of the globe, the better their economies will be in the long run.
Only time will tell, but it seems like we are watching a blockchain and crypto leader emerge in real time.
The more you know,
John Butler, Jr.
Contributing Editor, The Token Authority