Despite the prevailing market conditions, cryptocurrency adoption, especially in emerging economies, continues to grow unabated. This reality, in turn, stimulates investor interest in these potential markets.
For example, the African blockchain landscape is currently attracting significant funding from prominent venture capital firms and angel investors. Recently, the Central African Republic (CAR), following in the footsteps of another emerging economy El Salvador, approved the use of bitcoin (BTC) as legal tender, further increasing investor confidence.
According to Nation’s latest report, African blockchain companies raised approximately $304 million in the first and second quarters of 2022, which is nearly three times the total $127 million collected by startups in the region in all of 2021. The report further clarified that in the first three months of 2022, venture capital funds invested $91 million in several African crypto startups. In the second quarter, inflow grew a whopping 134% to $213 million. This came at a time when the broader crypto market stumbled due to the Terra implosion, soaring inflation and ongoing geopolitical challenges.
Seychelles-based crypto exchange KuCoin has raised $150 million in what has since been dubbed the “mega deal” for the African blockchain market. Pan-African crypto exchange Mara and the Nigerian crypto startup have each raised $23 million and $10 million, while Congo-based Jambo raised $30 million and South African exchange VALR raised $50 million.
Emerging economies love Bitcoin
In the fourth quarter of 2021, as the crypto market reached new highs, several cryptocentric awareness and education campaigns were launched across the African continent, the fruits of which have become increasingly apparent in recent months.
For example, a group of distributed ledger technology (DLT) experts from East and West Africa under the umbrella of Jelurida Africa launched the first-ever East Africa Blockchain Expedition last year to educate locals about the benefits and advancements of blockchain. and crypto. Other organizations such as Emurgo Africa, the commercial wing of the Cardano Foundation, have also actively invested in a range of awareness and education programs to accelerate the widespread adoption of blockchain technology and cryptocurrency.
Thanks to these efforts, several mainstream companies in the region have begun to integrate blockchain technology into their existing models, further contributing to its growing adoption. Nigerian digital payments company Interswitch and Senegalese fintech company Wave are among the tech unicorns embracing the nascent technology. Another notable pan-African incubator project, Adrian Labs, has also stepped onto the scene to support the region’s startups and entrepreneurs using blockchain, AI, and other emerging technologies.
In addition to the importance of venture capital, more and more Africans are using cryptocurrency as their source for payments, transfers and even savings. Overall, multiple African countries are experiencing a wave of crypto adoption as residents continue to battle regional challenges such as inflation and devaluation of their local currencies.
Another reason behind the increased adoption is the growing number of tech-savvy young adults in the African region, coupled with the increased use of smartphones and the internet. In his latest report, Finbold reported that Nigeria is now the most crypto-obsessed country in the world, with a Google trends search score of 371.
Recently, cryptocurrency exchange AAX, in partnership with Forrester Consulting, commissioned a survey to assess cryptocurrency adoption in Africa, Latin America, Southeast Asia, and the Middle East. According to the reports, awareness and adoption of cryptocurrency, primarily bitcoin (BTC), is at an all-time high in these regions, with Africa leading the chart.
The Forrester Consulting survey shows that the majority of African respondents indicated that they use BTC as the preferred method of transferring money domestically and abroad. Nearly 46% of respondents noted that they use BTC to make payments and transfers, while 56% said they use it to maintain long-term value, and 52% said they use it as an investment vehicle.
On the future of blockchain and crypto in Africa, the general manager of Jelurida Africa, Mr. Adebajo, explains: “Most African governments are more interested in building local capacity. So if the plan is to get the attention of the government, more efforts should be made to train developers from Africa. While experience is also very important when deploying advanced solutions, this is where foreign developers can come in handy. When such a need arises, we will be willing to cooperate with foreign entities to realize the objectives of the projects.”
“We’ve been working on building prototype solutions in several areas over the past few months. As we continue to engage the government and hold meetings and rallies, we also plan to hold a Pan African Hackathon in conjunction with some other major players in the space,” emphasizes Adebajo. “But most importantly, before the end of Q4 2022, we aim to launch some major solutions tailored specifically for Africans.”
Against this promising backdrop, crypto has transformed the African landscape and laid the foundation for the African blockchain ecosystem of the future, while also connecting local talents with the brightest minds and resources from the wider crypto community.