Small crypt transfers have grown by 55% in Africa!

According to the latest study of the blockchain analytics company Chainalysis, Africans are gradually moving towards cryptocurrencies to trade local fiat currencies. Company research indicates that many people and companies use cryptocurrencies to prevent high prices, regulatory risks and monetary uncertainty. There have been 600,000 transfers from and to Africa per month. In total, transfers below 10 thousand dollars jumped by 55% to 316 million dollars in June.

South Africa and Kenya lead the field on cryptocurrency payments, the largest economy of the world. In Lagos, the biggest city in Nigeria, Abolaji Odunjo, who operates a mobile phone retail store, has begun using Bitcoin to pay his Chinese suppliers. He stated that this form of payment helped him escape high fees and provided an alternative to increasingly costly U.S. dollars. Many African countries struggle with devaluation of their currencies and peace, rising demand and, thus, purchasing US dollars. Such currencies have lost more than 50% of their value against the U.S. dollar over the last decade, such as South African Rand. 

Other respondents stated that Bitcoin payments often benefit families living abroad, in countries such as the United States and the United Kingdom.  According to the World Bank ‘s report, fiat transfer fees in Sub-Saharan Africa cost an average of 8.9% — the greater cost for South Africa is up to 20%. Bitcoin fees are considerably smaller, generally below 3%. Cryptocurrencies sent to Africa in 2020 will top 8 billion dollars in total in the previous year, with nearly 1 billion dollars in June alone. In 2019, however, only 48 trillion dollars of fiat were transmitted to sub-Saharan Africa and this is expected to decrease to 37 trillion dollars this year.

Data source: Cointelegraph and Reuters