Despite current market conditions, cryptocurrency adoption, primarily 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 leading venture capitalists as well as 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 boosting 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 almost three times higher than the $127 million total raised by blockchain startups. the region for the whole 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 increased 134% to $213 million. This came at a time when the broader crypto market was stumbling due to the implosion of Terra, rising inflation, and ongoing geopolitical challenges.
Seychelles-based cryptocurrency exchange KuCoin raised $150 million in what has since been dubbed the “mega deal” for the African blockchain market. Pan-African crypto exchange Mara and Nigerian crypto startup raised $23m and $10m each, while Congo-based Jambo raised $30m and South African exchange VALR raised $50 million.
Emerging Economies Love Bitcoin
In the fourth quarter of 2021, when the crypto market was reaching new heights, several crypto-centric awareness and education campaigns were launched across the African continent, the fruits of which have become increasingly evident over the past few years. last months.
For example, a group of Distributed Ledger Technology (DLT) experts based in East and West Africa under the umbrella of Jelurida Africa launched the first-ever Blockchain Expedition to East Africa to educate locals on the benefits and progress of blockchain and crypto last year. Other organizations like Emurgo Africa, the commercial wing of the Cardano Foundation, have also actively invested in a range of outreach and education programs to accelerate the widespread adoption of blockchain technology and cryptocurrency.
Thanks to these efforts, several mainstream companies in the region have started integrating blockchain technology into their existing models, contributing to the growing adoption. Nigerian digital payments company Interswitch and Senegalese fintech company Wave are among the tech unicorns to embrace the nascent technology. Another notable pan-African incubator project, Adrian Labs, has also entered the scene to support startups and entrepreneurs in the region using blockchain, AI and other emerging technologies.
In addition to venture capital interests, a growing number of Africans are embracing cryptocurrency as a go-to source for payments, transfers, and even savings. Overall, several African countries are seeing an increase in crypto adoption as residents continue to struggle with regional challenges such as inflation and devaluation of their local currencies.
Another reason for the increased adoption is the growing number of tech-savvy young adults across the African region, coupled with the increased use of smartphones and the internet. In its latest report, Finbold reported that Nigeria now ranks as the most crypto-obsessed country in the world, with a Google Trends search score of 371.
Recently, cryptocurrency exchange AAX commissioned a survey in conjunction with Forrester Consulting to gauge cryptocurrency adoption in Africa, Latin America, Southeast Asia, and the Middle East. According to reports, awareness and adoption of cryptocurrency, primarily bitcoin (BTC), is at an all-time high in these regions, with Africa topping the charts.
The Forrester Consulting survey highlights that the majority of African respondents indicated that they use BTC as their preferred method to transfer funds domestically and internationally. Nearly 46% of respondents said they use BTC to make payments and transfers, while 56% said they use it to preserve long-term value and 52% said they use it as a tool of investment.
On the future of blockchain and crypto in Africa, Jelurida Africa Managing Director 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 in Africa. While experience also matters a lot when deploying sophisticated solutions, that’s where foreign developers would come in handy. When such a need arises, we will be willing to work with foreign entities to achieve project objectives.
“We have spent the past two months prototyping solutions in various areas. As we continue to engage the government and organize meetings and get-togethers, we also plan to organize a pan-African hackathon in collaboration with other big players in the space,” Adebajo points out. “But more importantly, we plan to launch large solutions specifically designed for Africans before the end of the fourth quarter of 2022.”
Against this promising backdrop, crypto has transformed the African landscape, laying the groundwork for Africa’s blockchain ecosystem of the future while enabling local talent to connect with the brightest minds and resources in the crypto community in the sense of wide.