People don't usually think about Africa first when it comes to cryptocurrency, but that's often because they don't understand how the realities and challenges African economies face could benefit them. One of these realities is how much faster internet access is developing vs other types of infrastructure.
Many people on the continent have access to the internet, for instance, but still mainly use fiat notes for transactions and don’t have a bank account. That presents a prime opportunity for cryptocurrencies to extend and fill the gaps left by other industries. Let’s take a look at a few reasons why cryptocurrencies could take off very fast in Africa and the benefits this expansion could bring.
Less Government Control
One of the tragedies of the African continent is how much governments have control over the markets. Cryptocurrency could help African economies become freer. Making payments does not require that much red tape with cryptocurrency and transactions are not controlled by a single authority. This is one of the things that could allow cryptocurrencies to spread faster on the continent.
A Protection Against Inflation
Lots of currencies across the African continent have seen strong inflation over the last few years, and this has sparked interest in cryptocurrencies that are not influenced by local fiscal policies.
One of the countries that have been the most famous for the collapse of its currency is Zimbabwe, and Zimbabwe happens to be one of the countries where Bitcoin is the most widely used. Ghana is another state that has seen high inflation lately, and where Bitcoin is very popular. Countries like Malawi, Mozambique, Egypt, and Zambia have all seen inflation in the double digits recently, and we can expect Bitcoin and other cryptocurrencies to grow in popularity in these territories pretty fast shortly.
The deflationary nature of many cryptocurrencies is what makes them so popular in countries with high inflation, but you have to make sure that you check them against the proper currency to make sure that you will get the same benefits when trading with your local currency. This is why any African trader or investor in cryptocurrency should find a good crypto calculator so they can follow prices in fiat for different currencies in real-time.
Africans are Eager to Invest in the Markets
You also have to take into account the eagerness of Africans to invest in cryptocurrency and the increase in economic literacy and education on the continent. One study found that Africans see cryptocurrency investment to guarantee a better future for their children and one South African study found that 50% of them would be interested in investing in crypto if it was facilitated by banks (source). So, there is a strong interest in crypto investing and there is no sign of it slowing down anytime soon.
If you’re an African and you want to invest in cryptocurrency, now could be the right time to do so. Make sure, however, that you know what you’re investing in, and also look at local projects that would allow you to benefit from insider knowledge.