As we continue to watch the increasing adoption of crypto in Africa, we have come across news that makes us realize we are on the right track. From the increase of retail-sized payments to mainstream adoption, today’s news digest is proof of the willingness people have to venture into crypto after realizing all the benefits of DeFi.
Starting with something that won’t surprise anyone who’s been with us for a while, Africa leading retail-sized bitcoin payments suggests increasing adoption. The global bitcoin and cryptocurrency market is growing every day and Africa is not an exception to this. Although Africa is the smallest cryptocurrency economy by continent, it is the most dynamic. It has grown massively, receiving over $105.6 billion from July 2020 to mid-2021. In fact, it ranks as the third fastest-growing bitcoin and cryptocurrency economy in the world per Chainalysis. What’s more, Nigeria, South Africa, and Kenya all rank in their 2021 Top 20 Global Crypto Adoption Index. And why should you pay attention to these retail-sized payments? Unlike other regions where institutional adoption is massive, small-sized bitcoin and altcoin transfers are perhaps the most promising aspect in the African crypto market. The retail-sized transfers are the highest in the world with an overall transaction volume of 7%, considerably higher than the global average of 5.5%.The continent also leads in cross-region bitcoin and altcoins transfers. While the cross-region transfers make up 96% of all transaction volume in Africa, the figure stands at 78% in other global regions combined. Again, this indicates a growing grassroots adoption. Most of the transactions happen over peer-to-peer platforms, which form the backbone of cryptocurrency market growth in the continent. Many people rely on P2P platforms for commercial transactions and remittances.
Now, you might wonder how these small transactions benefit Africa's economy. Well, due to central bank sanctions, informal P2P trading has become the most popular method of trading bitcoin and altcoins in the continent. The non-custodial P2P platforms enable traders to exchange cryptocurrencies and send money amongst themselves either using banks or other money transfers. By using these platforms, users can maneuver the hurdles created by financial institutions on cryptocurrency trading. Some African governments, for example in Nigeria and Kenya, have directed banks to disallow bitcoin and altcoin trading through their systems. As a result, peer-to-peer platforms have become suitable alternatives thanks to their convenience and effectiveness. In essence, bitcoin and cryptocurrency trading constraints put in place by banks and governments is one of the main reasons attributed to the growth of P2P platforms such as Paxful and Luno. According to COO and Cofounder Artur Schaback, Paxful has grown over 300% in Kenya over the last year, and 57% in Nigeria. Similarly, P2P transactions account for 1.2% of all Africa's bitcoin and altcoin transaction volume, the highest in the world. To be specific, 2.6% of bitcoin transactions occur over P2P platforms.
Talking about mainstream use, Nestcoin, a new, innovative venture with a mission to democratize access to economic opportunities by demystifying cryptocurrency, making it simple and accessible to everyday people, primarily emerging markets. DeFi & Blockchain, Bitcoin & Altcoin, DAOs & DApps, NFTs-do any of these sound alien to you? If so, you are not alone. There is constant innovation and wealth creation taking place in the ‘crypto-verse’ today, the majority of the world’s population are unable to discern what any of it means and how it can apply to their daily lives. Research shows that lack of education and complexities with traditional crypto applications are major barriers to widespread adoption. Nestcoin is dedicated to eliminating some of these existing barriers by creating simplified crypto-native products that are educative, user-centric and scalable, without skimping on quality and functionality. This is a huge undertaking, but with the mission spearheaded by Yele Bademosi (CEO & Co-founder) and Taiwo Orilogbon (CTO & Co-founder), Nestcoin is well-positioned for success. Bademosi and Orilogbon are both widely reputed for their substantial contributions to the development of Africa’s nascent community and their success in building impactful crypto-based products. Speaking about Nestcoin, Bademosi said:
“The power of crypto lies in its potential to circumvent poorly designed economic infrastructure and connect anyone to a global economy with access to unlimited financial opportunities. At Nestcoin, we believe these opportunities can and should be accessible to everyone which is why our products will be stripped of all undue complexities and designed to meet you wherever you are in your crypto journey to guide and elevate your experience. We are gearing up for take-off and are thrilled to invite you on board. Welcome to Nestcoin.”
Netx up, the latest funding extension round puts an African fintech and bitcoin app at a $2 billion valuation. African cross-border payments app Chipper Cash has started jumping on markets overseas to capitalize on remittances this year and has raised $150 million in a Series C extension round led by bitcoin exchange FTX, leading the money transmitting app to a $2 billion valuation. Chipper, which is used in seven African countries, has ventured into the U.K. and U.S. markets in recent months, enabling a new remittances option.
“Chipper Cash is offering remittances considerably cheaper than anyone else,” Serunjogi said, per the report. “More important to that is that we are now the first ones that I know honestly to be able to support Africa to the U.S. in terms of sending money.”
The money transmitting app is also integrating bitcoin services to enable its users to buy, sell, and hold BTC across Africa. The feature is currently on early access and allows instant conversion of local currencies to BTC on the Chipper Cash app through the connection of “any mobile money or bank account,” Prime Trust is the bitcoin service provider for Chipper.
“Serunjogi founded Chipper Cash with Maijid Moujaled in 2018 to offer a no-fee peer-to-peer cross-border payment service in Africa via its app,” per the report. “Its services are used across seven African countries — Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.”
And finally, to end on a good note, UK payment services provider, FintechCashier, has selected Xago to expand its merchant payment solution in Africa. The UK-based payment services provider is a payment platform that sets up the operation and support during all stages from onboarding to full deployment while guaranteeing efficient transaction-related funds of their clients. Speaking on this partnership, Kevin Lewis, Chief Revenue Officer, Xago commented:
“We are honoured to be the partner of choice for the FintechCashier Group, to enable them to offer accurate and fast payment products and services across the continent. Utilizing Xago’s gateway enables clients like FintechCashier to transfer funds from one point to another with efficiency, speed, and at low cost while being certain that they are partnering with a credible company.”
Also speaking on this collaboration, Natalie Kastberg, Head of Operations, FintechCashier:
“The FintechCashier Group is pleased to partner with Xago to enable our SMEs and Family Office clients to access the South African payments market and a foothold into the wider African continent. We are impressed by the professionalism of the Xago team and their in-depth approach to moving funds across the world efficiently.
That’s it for this week’s News Digest. Make sure to keep an eye out for upcoming content and don’t forget to follow us on our social media, we have major news to be released on 11.11, so don’t miss out.
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