Next Continent for 10x Crypto Adoption: Africa
Will Blockchain technology be the fourth industrial revolution in Africa?
In the past decade, blockchain has laid the foundation for a new paradigm, which has all the potential to innovate how we exchange value and transfer asset ownership. From day one, its vision for humanity has been clear: to decentralize our money system. Bitcoin is the first widely adopted peer-to-peer payment infrastructure, where payments can take place in a trustless manner. Users’ identities stay anonymous on the network and have self-custodial ownership over their Bitcoin.
We have seen an incredible adoption rate of blockchain usage throughout the world compared to that of another groundbreaking technology — the internet. In fact, according to Coinshares, blockchain even grows at a faster rate than the internet experienced back in the late 90s. The internet grew by 63% at its peak in 1997, while BTC usage grew by 113% in 2021. If such trend continues, there will be over 4 billion BTC users by 2030
1/ Impressive growth in crypto adoption
Africa is leading the race at the forefront of this blockchain revolution with a remarkable 1,200% growth in crypto adoption as of June 2021. Across Africa, crypto adoption has shown no sign of slowing down, and African governments are taking progressive initiatives to support this revolution. According to “The African Blockchain Report 2021”, $91 million have been raised by African blockchain startups in Q1 2022. This is an almost 17 times increase in funding compared to Q1 2021. African crypto adoption is growing at an incredible rate, and legal frameworks are being built to legitimize this technology on the continent.
2/ Nigeria becomes the first country in Africa to issue a CBDC
In October 2021, Nigeria became the first African country to issue a Central Bank Digital Currency (CBDC) — the E-Naira. The E-Naira infrastructure is built upon Hyperledger Fabric, a distributed ledger technology (DLT) variant. DLT allows the Central Bank of Nigeria to take advantage of new technology while retaining control over the system. This new digital form of the Naira has the potential to promote lower costs of transactions and drive financial inclusion while minimizing systematic risks to the financial system. According to Reuters, during E-Naira’s launch, 33 banks, 2000 customers and 120 merchants had registered successfully with the platform to try out E-Naira. African officials expect the adoption of a CBDC could contribute an additional $29 billion to the Nigerian GDP over the next decade. The country also launched a mobile wallet, which will then be used to exchange the eNaira. This effort to adopt CBDC marked a shift in the political viewpoint of the Nigerian government in favor of a more transparent and efficient type of money.
3/ CAR becomes the second country to adopt Bitcoin as a legal tender
Later on, in late April 2022, Central African Republic (CAR) lawmakers voted unanimously to pass a bill adopting Bitcoin as legal tender, alongside with CFA franc. CAR is the second nation in the world to do so, after El Salvador. This move is an effort from CAR to become monetary independent, as the CFA franc is pegged to the EUR and guaranteed by France. In addition, keeping the CFA franc artificially high makes exports uncompetitive and hurts local industrialisation. The country’s chief of staff to the President called this move “a decisive step toward opening up new opportunities for our countries’’. Bitcoin, along with other cryptocurrencies, has the potential to be a hedge for CAR’s nagging issues of political instability and violence.
4/ CAR launches local Crypto Hub — Project Sango
Not stopping there, CAR has also established an ambitious government-backed project called Sango, which aims to embrace NFT and build a holistic metaverse environment. Sango is intended to drive actual use cases such as tokenizing real-world assets such as natural resources and creating digital identities. Moreover, the initiatives also include a plan to build Bitcoin infrastructure — a wallet that supports Bitcoin, Lightning network, and a PoS system for vendors. Last week, just two months after their official announcement to adopt Bitcoin as legal tender, CAR teased their plan to roll out a national cryptocurrency. The President envisioned that this digital currency would serve as the currency for the next generation and provide the world with direct access to CAR’s vast natural resources.
5/ South African Reserve Bank announces their plan to bring regulation for Cryptocurrency
Just earlier this week, the Central Bank of South Africa (SARB) announced their plan to regulate and treat cryptocurrencies as financial products. Under this new policy, cryptocurrencies in South Africa will be monitored by the Financial Intelligence Center (FIA) for money laundering, tax evasion and terrorist financing activities. Then, SARB will work on a regulatory framework for exchanges in South Africa to allow cryptocurrencies listing and Know Your Customer (KYC) requirements. The question has shifted from “how to avoid illegal activities powered by cryptocurrencies?” to “how to build the regulatory framework to protect investors and nurture this new technological advancement?”.
The world of cryptocurrency is moving fast and breaking things. At the forefront of this revolution, Africa is also charging forward to build sufficient legal frameworks and infrastructure for Web3. The continent is more than ready for the leapfrog.
About Jambo
Jambo is building the Web3 super app that will educate, bank and entertain the continent. Jambo aims to pioneer the largest, most influential Web3 user acquisition portal across the continent and serve as the bridge between Africa and applications from around the world seeking to tap into the African market. The opportunity here is immense. We have a long-term vision of realizing financial prosperity for Africans.
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