To put things into perspective, a recent report released by Singapore-based crypto data provider Triple A shows that the North African country of Morocco currently boasts one of the largest crypto populations in the region at nearly 2.5%. The kingdom currently leading many prominent countries in terms of daily Bitcoin (BTC) trades, trailing only behind Saudi Arabia across the entirety of the Middle East and North Africa (MENA) region, an impressive feat, to say the least.
What’s even more interesting is that Morocco’s existing legislative framework is largely anti-crypto, with the country’s Foreign Exchange Office giving no indication of softening its stance anytime in the near future. Despite these stringent regulations, people across the region have continued to find means such as peer-to-peer (P2P) and over-the-counter trading through which to make inroads into this rapidly-evolving ecosystem.
Crypto firms entering Africa at unprecedented rate
Emmanuel Babalola, the Africa director for cryptocurrency exchange Binance, told Cointelegraph that with each passing month, the number of cross-collaborations taking place between local blockchain/crypto firms and various mainstream entities has continued to grow. Babalola said that most forward-looking tech companies are vying to gain exposure within the region, all while trying to help people across the continent embrace and realize the true utility of blockchain.
He further pointed out that Binance has recently partnered with the Confederation of African Football (AFCON) to sponsor the TotalEnergies African Cup of Nations tournament, a move which he sees as a small step toward a grander scheme, adding:
“The AFCON sponsorship was a very exciting one. Football is the most popular sport in Africa, one that unites the entire continent and so, sponsoring the biggest football tournament in Africa was honestly a no-brainer. It corroborates our mission to take crypto mainstream across the continent.”
Staying in line with his company’s ideal of widespread crypto adoption across the African landscape, he also pointed out that Binance recently collaborated with some of the stars participating in this year’s iteration of Big Brother Naija (Nigeria) — the biggest reality show on the continent — to help bring crypto education to a wider mainstream audience. “We are [even] sponsoring Nigerian Idol — the Nigerian version of a popular singing contest,” he added.
Lastly, Babalola noted that in recent months, many unprecedented happenings have taken place across the global crypto ecosystem such as countries like El Salvador adopting Bitcoin as legal tender — something he believes was totally unfathomable just a few years ago — and thus it would not be surprising to see African nations follow suit:
“I think this is only the beginning of things to come. In general, as institutional interest in cryptocurrencies continues to rise, more mainstream entities making their way into the region is inevitable.”
Crypto can help redefine business across Africa
When asked about the continued growth of crypto across Africa, especially within the northern part of the continent, Adedayo Adebajo, Africa director for Jelurida, a blockchain software company that develops and maintains the Nxt and Ardor blockchains, told Cointelegraph that a vast majority of African countries like to consider themselves as one bloc, rather than being divided into regional categories.
In this regard, he noted that one aspect that has united most people living in Africa is their lack of tangible business opportunities, as well as a clear lack of access to high-quality banking alternatives that they can use to send and receive funds from across the globe. Adebajo added:
“African nations believed they were left out of the first three industrial revolutions. The 4IR (fourth industrial revolution) technology including blockchain and cryptocurrency has, for the first time in history, provided them with an opportunity to participate in making history. Most governments in the continent are now open to capacity building and localizing solution developments, among others. To do so, their doors remain wide open to foreign offers that will get them closer to their aim.”
When asked about the challenges that may arise as a result of most nations in the continent (especially those located across North Africa) adhering to an Islamic way of life, Adebajo noted that the key issue preventing crypto-based banking services from reaching the masses is not religion but a clear lack of understanding of what the technology brings to the table.
“As Muslims, we have learned from quotable religious scholars that we are not excluded from using crypto or participating in its offerings, although this stance may perhaps remain debatable,” he added.
Related: Indonesia’s national Islamic council reportedly declares Bitcoin haram
Blockchain-based banking solution
Africa’s vast geographic size compounded by the presence of many small economies across the continent has led to many nations struggling with systematic infrastructure development, especially when it comes to financial services, something that has resulted in 57% of the continent’s population remaining unbanked.
RJ Katunda, co-founder of African project World Mobile, a Cardano-based mobile network, told Cointelegraph that over the years, Africans have gradually become accustomed to using innovative payment systems such as Kenya’s M-Pesa.
However, he pointed out that there are now newer blockchain-based alternatives beginning to emerge, setting the context for crypto and digital currencies that offer a more convenient and direct P2P channel for remittance payments, international commerce and savings. He added:
“With many economies growing rapidly, crypto and blockchain-based projects will continue to enter Africa, where their proposition is relevant and where they can form partnerships with local entities. While many individuals use cryptocurrency in Africa, legislation in many countries lags. As in other jurisdictions, cryptocurrencies don’t fit within current regulatory frameworks.”
In essence, Katunda believes that the core issue preventing widespread adoption of crypto-tech (especially from a financial standpoint) across the region is a lack of perceived central control from many governments, which creates difficulties for authorities to oversee and mitigate bad practices. “However, many governments have announced that they are working on regulatory frameworks to emerge in the near future,” he closed out by saying.
Africa cannot be ignored any longer
Akin Jones, a partner at Gluwa Capital, an Africa-based investment fund focused exclusively on fintech lenders using blockchain technology, told Cointelegraph that Africa’s growing population and adoption of cryptocurrency mean that companies ignoring the continent are either not serious about the technology in the long term or have failed to realize the massive financial proposition currently in front of them.
In Jones’ view, Bitcoin could very well become legal tender across many African nations since most of these countries already find it quite hard to trade with each other because of constant currency fluctuations. Talking about North Africa in particular, he further opined that since the region serves as a bridge between Europe and sub-Saharan Africa, it would make a lot of sense for fintech firms to consider making inroads there, adding:
“Identity management, land ownership and insurance are three key areas that could be improved on across North Africa which could help change the perception in the region. CBDCs [central bank digital currencies] could also help ease the acceptance of cryptocurrency in this regard.”
Thus, it will be interesting to see how things shape out for the continent from here on out, especially since many of the nations within the region are known to suffer from an extremely high level of red tape. With many governments fast realizing the potential that crypto and blockchain possess, however, it would not be surprising to see countries making way for more foreign investment from established firms operating within this rapidly maturing sector.