Crisis creates difficulties for some and gives opportunities to others. While in developed countries borders were locked and key transactions postponed, new players entered the market. Continuously working in the African market, we have noticed that during the pandemic this region managed to make a leap in the development of digital financial services. Recently our suggestion has been confirmed by participants of the session within the framework of The Global Boardroom held on the platform FT Live by Financial Times on May 6th. The conversation was attended by the managers and founders of the most promising African startups.
Reasons why the whole world is looking at Africa right now:
1. Huge audience not covered by banking services
In Africa 350 million people do not have access to banking services. So in terms of hyperinflation the first step for them to stabilize their finances is operations with cryptocurrencies. Since 2015, Bitcoin has become the leading medium of exchange in Africa. For instance, Nigeria is the leader in terms of growth, recording weekly P2P connections between $5 million and $10 million. Kenya and South Africa tied for second place with an average of $1 million to $2 million per week.
2. Cryptocurrency boom
Africa is one of the fastest growing digital spaces in the world. According to data from US Blockchain research firm Chainalysis, monthly cryptocurrency transfers in Africa jumped more than 55% during the year and reached the level of $316 million from September 2019 to September 2020.
Despite global economic uncertainty in 2020 cryptocurrency trading continued to grow in Africa and this trend keeps strengthening in 2021. In May 2020 Nigeria showed the highest volume of trade in one week that was $7.2 million, making the third largest P2P week. The Silver Medal went to Kenya, which saw another record-breaking week trading at the level of $1.6 million. South Africa closed the top-3 by exchanging $1.1 million per week. The continent is moving from ‘exporting goods’ to ‘exporting ideas’ as Dimieari Von Kemedi (Co-Founder and CEO, Alluvial and Angalafintech) stated.