Cryptocurrency is one of the most promising financial innovations. The popularity of cryptocurrency and Bitcoin in particular, appears to have increased significantly in Africa in the last decade. A study by Arcane Research 2020 showed that multiple African countries like Nigeria, South Africa, and Uganda are among the top 10 countries that search for Bitcoin on Google. Also, it was found that African countries possess the highest amounts when it comes to cryptocurrency, this shows that Africans are adopting this innovation rapidly. There is so much interest in Bitcoin in Africa because many Africans do not have access to a bank account due to the scarcity of banks in large areas. The study conducted by Arcane Research (2020) also showed that 20 per cent of African adults are already dependent on Internet banking, indicating that they are certainly open to this technology.
Africa has over 40 currencies that are struggling with instability and levels of inflation compared to the US dollar, causing a lot of distrust because the national currencies fluctuate a lot in value. The African population is losing confidence in paper money and this is why it looks for other stable currencies. African people nowadays don’t use fiat currencies anymore and instead of that, they use phone minutes and credits as a way to trade. Cryptocurrencies such as Bitcoin are thriving in Africa because it serves as a safe haven for their money. As long as the national currencies don’t catch up, it looks like cryptocurrency will become the new way to pay the bills in Africa.
The data from US blockchain research firm – Chainalysis shows that monthly cryptocurrency transfers to and from Africa of under $10,000 typically made by individuals and small businesses jumped by more than 55% in a year to reach $316 million in June 2020. The number of monthly transfers also rose by almost half according to Chainalysis, which says that research is the most comprehensive effort yet to map out global crypto use. Much of the activities took place in Nigeria, the continent’s biggest economy, along with South Africa and Kenya.
The general consensus among experts appears to be that a safe haven is something of value that tends to move up or at least stay consistent in value while other assets and their respective markets are falling. From the get-go since its launch, Bitcoin has been defined as a safe haven. While this works well for assets and commodities with true global market longevity, for Bitcoin, a different avenue is ideal. From its launch in 2009, Bitcoin has always been set up as a true macro-hedge or safe haven, because of just how revolutionary it is. Before it existed, there was never any other decentralized currency that truly worked in practice and consequently, the entire world had always been dependent on fiat run systems or systems that could always be manipulated by the governments involved with them.