It’s easy for pundits, journalists, and entrepreneurs be hyper-focused on the European, Asian, and North American cryptocurrency markets as most of the world’s crypto-related business does take place in these regions. However, the cryptocurrency industry in Africa has been quietly and steadily gaining momentum. More specifically, Bitcoin’s trading volume across Africa has continued to grow at an increasing rate.
Paxful, a peer-to-peer crypto exchange, has positioned itself perfectly within the expanding African crypto-market. An eye-popping $40 million worth of Bitcoin is bought and sold on the exchange on a monthly basis. According to a Bitcoinist report, Paxful is “happy” to serve a population that is severely underbanked and in need of access to the “online economic marketplace.”
Indeed, while cryptocurrency in the western world is most often viewed as a profitable investment or a way to anonymously pay for things on the internet, crypto has played a different role in some of the world’s most underbanked regions.
Safe haven for savings
Across Africa, people have used crypto wallets, which are often supported by mobile phones, as a way to store their funds in environments lacking adequate banking services or with very unstable currencies. Despite the renowned volatility of Bitcoin, the Express reported that some African fiat currencies can be even more volatile.
Thus, ”cryptocurrencies offer financial stability and the ability to store and exchange value of something independent to the politics in their home country.”
Ray Youssef, co-founder of Paxful, told Bitcoinist that “[Africans are] converting their savings into crypto to preserve their wealth from hyperinflation.” For example, “Nigeria’s fiat currency, Naira, has lost 90% of its value when compared to the USD and EUR in the past two years alone. Meanwhile, Bitcoin rose over 1,000% in 2017.”
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Residents of Zimbabwe have also turned to Bitcoin as a way to protect their funds. In mid-November of 2017, Bitcoin became so popular in the country that it was trading at $14,000 on Zimbabwean exchange Golix, roughly $6000 over the price of a single BTC in the rest of the world at the time.
Paxful and other services giving African citizens access to crypto can also help them to participate in ICOs, circumvent online spending limits, and provide gateways to participate and invest in a whole world of online ventures that were previously inaccessible to them.
The fact is that with its unique set of needs and opportunities, the African cryptomarket is rife with potential. Paxful is only one of the first to take hold of this quickly expanding industry.
Ray Youssef agrees. In an article entitled ‘Building Wakanda: CryptoCurrency is the Vibranium of Africa,’ he writes “we are all on the verge of the P2P financial revolution and it is being led by Africa.”