The Rise of Africans Crypto Economy
The Case of Egypt and Morroco
The geographical compass looks positive for the rapid adoption of cryptocurrency in Africa. Major economies driving economic growth in their regional blocs are the same economies driving the growth of crypto adoption on the continent.
For instance, Nigeria is the major economic power in the West African market, and they represent the key driver of crypto adoption in West Africa. When we move to eastern Africa, Kenya is the key hub of crypto activities, with South Africa dominating the space in their own domain.
I also see Cameroon performing pretty well in Central Africa so far as data is concerned. All this positioning indicates the readiness of Sub-Saharan Africa for the mass adoption of cryptocurrencies.
What about North Africa?
The spotlight hasn’t shined much on the northern African market. Egypt and Morocco in particular are playing major roles in terms of adoption so let’s take a dive into activities within these markets.
Egyptian authorities have been very hawkish on crypto-related activities. For instance, the enacted Egyptian Banking System Law №194 of 2020 prohibits Egyptians from promoting, issuing, or trading any form of cryptocurrency. Whoever dares to violate the law shall be imprisoned and fined no less than one million Egyptian pounds.
However, statistics from Chainalysis’ yearly crypto adoption index show that people are not adhering to the regulations. Egypt was part of the top 30 countries rated by the analytic firm in grassroots cryptocurrency adoption.
They are comfortably leading their counterparts in the Middle East with 221.7% year-over-year growth in terms of transaction volume(see the below chart).
The Egyptian pound has already weakened by 13.5% in the last year alone, a very good reason for people to adopt crypto within this economy.
Suppose you had your local currency rapidly losing its potency at the same time as bearish crypto prices. In that case, you would not need any fortune teller to admonish you to pack your savings into crypto as an investor. That is exactly what is happening in the Egyptian crypto economy.
Egypt’s remittance market accounts for around 8% of its GDP. The Gross Domestic Product of Egypt as of 2021 was 404.14 billion US dollars according to data from World Bank. 8% of $404.14b should give us 32.33 billion dollars.
No wonder the National Bank of Egypt is in the process of putting into place measures to increase cash flows into the country with the help of Blockchain Technology.
In joining Ripple’s distributed ledger-based payment method(RippleNet), the national bank seeks to make a quicker, cheaper, and more reliable payment solution available to its people.
The bar graph above is an indication of positive growth for both Morocco and Egypt. In each country, authorities start in a hawkish style, but once they see they can’t beat us, they join us.
Inflation isn’t the major reason for the growth of the Morrocan crypto economy, as Morocco has kept its inflation at only 5.3%. Chainalysis ascribes the growth to an evolving regulatory environment.
The growth of crypto in this environment seems to be tied to the government’s permissible crypto stance it took this year, a turn away from its 2017 punitive measures
The government also struck a deal with the IMF and the World Bank to champion crypto regulations that promote innovation and consumer protection.
As more authorities become open-minded to the potential of the blockchain economy in the world, especially emerging markets, I have no doubt that the space will be open for smart innovations.
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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.
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