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African Crypto Movement Learns from Past to Push Forward

An examination of Google Trends this year illustrates how the African continent is waking up to cryptocurrency-related products and exploring the sector for innovative opportunities.

The popularity of Bitcoin in Africa continues to grow, enabled by the presence of a greater number of cryptocurrency exchange platforms. There are benefits to cryptocurrency ownership unique to the continent of Africa, many devolving from the widespread unstable economic conditions.

Google searches reveal that Ghana, Nigeria and South Africa are frantically searching online when it comes down to cryptocurrency and Bitcoin.

The M-pesa mobile money platform that started over 10 years ago as a Vodaphone pilot scheme for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania, is now an African giant. It is convenience that has made a massive impact in these countries, allowing users to deposit, withdraw, transfer money and pay for goods and services from their mobile phone.

So big has the company become it has now reached South Africa and further afield in Afghanistan, India, Romania and Albania.

The mobile phone has become Africa’s most significant innovation, connecting people across the continent in remote regions, also providing a host of innovative apps, thereby making more conventional and expensive forms of communication obsolete. Africa’s early steps in the cryptocurrency space, with crypto users doing their business through P2P networks, avoiding the limitations of banks and exchanges, neither of which many people have access to, show that the mobile phone is key.

Michael Kimani, the chairperson of the Blockchain Association of Kenya, draws a comparison to the early days of M-pesa to the current movement towards crypto and P2P solutions as users innovate to circumnavigate the drawbacks of trading. In the pre-M-Pesa period, people would trade airtime between themselves to escape inflated telecoms charges. He feels similar is happening now with crypto trading. He argues:

“These informal networks, resemble the airtime currency informal networks of pre-2006 that powered remittance payment networks before M-Pesa became a thing.”

A further accelerant could be just around the corner with last month’s launch of an African-focused cryptocurrency exchange called Coindirect. Co-founder Stephen Young says that Africa has unique problems and these must be considered in any startup plan for cryptocurrency adoption on the continent. He feels that current exchanges don’t take these into consideration.

In terms of African fiat currencies, Young identifies their systemic volatility, insecurity and lack of governance as factors that the crypto space need to take on board: He argues:

“If Africans are to benefit from the cryptocurrency revolution we need make it easier to buy, store and trade cryptocurrencies. As Africans, it is our responsibility to help build the infrastructure and we need to be a part of the revolution.”

The South African exchange allows users to buy, convert, store, send or sell more than 40 cryptocurrencies, combining a peer-to-peer marketplace, wallets and an exchange to allow customers to access cryptocurrencies from their local currency.

 

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