Why Africa Continues to Lag Behind in Cryptocurrency Adoption
Africa continues to dominate Google Trends search interest for “bitcoin,” however that has not equated into prevalent adoption of cryptocurrency by users and organizations. Apart from nontransparent regulation and a lack of awareness, one of the major factors for this failure has been the expansive usage of mobile money on the continent.
Crypto Adoption Disappointing, Even as Africa Dominates Bitcoin Search Interest
According to Google Trends, the biggest search interest for bitcoin worldwide is by potential investors from Nigeria, South Africa, and Kenya, the three greatest cryptocurrency markets in Africa. That dominance is, nevertheless, predominantly limited to trading activities on exchanges. On a couple of occasions, bitcoin might be utilized as a way of payment, mainly to abroad suppliers.
However, regardless of that world-leading interest, Africa still falls behind the rest of the world in everyday BTC usage and adoption. The cryptocurrency has found it challenging to break the stranglehold of convenience, simpleness, and effectiveness that, like a magnet, draws countless Africans to mobile money. The continent of 1.2 billion individuals is home to over 50 percent of the world’s mobile money services.
For instance, with a basic telephone handset, one can send or receive money through SMS anywhere within a particular country, without the need of a web connection. By comparison, you will require a smart device and a secure internet connection to complete a cryptocurrency transaction. While web use has actually risen dramatically in the past twenty years, users from Africa account for simply 10 percent of the worldwide overall, making the case for crypto on the continent even more puzzling. Likewise, erratic power supply in numerous countries continues to hinder internet access on which cryptocurrency largely depends.
How To Beat Mobile Money at Its Own Game
Vin Armani, creator and CTO of Cointext, an internet-free wallet service that allows users to send or receive bitcoin cash (BCH) by means of SMS– similar to mobile money, believes his service might rival mobile money in the continent. In Africa, Cointext is presently available just in South Africa, and it’s uncertain the number of people is, in fact, utilizing the service there. “We are preparing to make a significant announcement that will provide us international coverage (in every country),” Armani told news.Bitcoin.com.
“We’re currently working on an integration that will make us available for smartphones throughout Africa. We’re also working on SMS solutions for a few other African countries,” another official from Cointext commented on the side.
Elisha Owusu Akyaw, a 17-year-old Ghanian crypto investor and influencer, has made a fortune investing in bitcoin. He believes that “Cryptocurrencies should integrate with mobile banking platforms.” Akyaw might have a point. The mobile money experience has actually grown extremely deeply in African economics to the level, perhaps, of defining its people.”The power of financial technology to expand access to the use of accounts is demonstrated most persuasively in Sub-Saharan Africa,” the World Bank’s Global Findex Database detailed in its financial addition study, which discovered 21 percent of adults on the continent now have a mobile money account. This is “nearly twice the share in 2014 and easily the highest of any region in the world.”
If that is insufficient, cryptocurrencies will likely have to combat tooth and nail to get any sensible market share in the mobile money-dominated payment systems in Africa, an area typically touted as the next frontier for virtual currencies. In Zimbabwe, publicly noted Econet Wireless manages 95 percent of the mobile money market share through its Ecocash platform. The seven year-old service is so successful that almost every federal government department depends on it for electronic payments.
With more than 6 million users in the South African country, Ecocash has actually processed over $23 billion worth of transactions since launch in September 2011. It boasts more than 32,000 agents (merchants) throughout Zimbabwe. This is the sort of established competitors that cryptocurrencies will need to compete with. There will be 725 million mobile phone subscribers in Africa by 2020, according to the GSM Association, who might either plug into crypto or mobile money.
Cumbersome Registration Processes Dissuade Crypto Use
Bernard Parah, a 26-year-old business owner from Lagos, Nigeria, acknowledges this challenge and also the opportunity. 2 years back, he founded Bitnob Quickserve, a platform that allows Africans to purchase vouchers and redeem them for BTC without the requirement to complete KYC or AML procedures. Parah posits that a person of the greatest barriers to cryptocurrency adoption is the maze of confirmations needed by exchanges at registration.
“We believe that [the service] will reduce the entry barrier for many people who want to try out bitcoins here in Africa,” Parah told news.Bitcoin.com. “Onboarding users needs to be made simpler. Many first time users give up at the point where they have to upload their personal identity details for verification.”
Parah likewise pointed to ease of use and the worry of loss of funds without recovery as stumbling blocks. “A bitcoin address looks like a foreign language to new users,” he observes. “Many people are not ready to be their own banks, they would rather settle for convenience over security,” stated Parah, who said there’s a need for more awareness and education about cryptocurrency in general.
A host of fake bitcoin scams have not assisted the cryptocurrency cause either. In Uganda, for instance, countless individuals have actually succumbed to a variety of Ponzi plans, including the D9 Club, which promised to pay members in BTC. The plan, now collapsed, masqueraded as a sports trading company, promising members significant weekly payouts in bitcoin on initial investment of in between $250 and $2,000. “Scams give Africa [and crypto] a bad name,” decried Chimezie Chuta, an IT specialist and bitcoin enthusiast from Nigeria. Regulation has, as always, been a sticky issue where bitcoin is concerned.
What are your thoughts about cryptocurrency adoption in Africa? Let us know in the comments section below.
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