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Increased Cryptocurrency Flows to Africa
Leading crypto analytics platform Chainalysis has reported that African countries like Kenya, Nigeria, South Africa and Tanzania are among the top 20 of the company’s Global Cryptocurrency Adoption Index.
The Global Crypto Adoption Index of Chainalysis showed that Kenya is one of the top 5 countries in cryptocurrency adoption with Nigeria positioned on 6th. South Africa, Ghana, and Tanzania came in at 16th, 17th, and 19th with Vietnam topping the list of the Global Crypto Adoption Index.
Despite the country capturing only 2% of the global value of all cryptocurrencies received, the largest crypto channel connects Africa to East Asia with channels to Northern and Western Europe and North America trailing closely behind. As per the report, the high volume of funds sent from Africa to East Asia comes from the magnitude of Chinese nationals working in Africa.
P2P Crypto Transactions Popular in Africa
Furthermore, Africa reported a continued usage of P2P cryptocurrency exchanges over the past year with Nigeria leading the charge as it takes a lion share of the transaction volume.
Year-to-Date (YtD), data revealed that Nigeria’s P2P trading volume is over $300 million on LocalBitcoins and Paxful, two of the world’s biggest P2P platforms by transaction volume.
“Why are P2P platforms so popular in Africa? One reason is that some countries, such as Nigeria and Kenya, have made it difficult for customers to send money to cryptocurrency businesses from their bank accounts, either by passing laws or simply by advising banks not to allow these transfers,” read the Chainalysis report.
Peer-to-Peer (P2P) transactions were analyzed in the report because this medium of exchange is widely used in Africa because regulations in countries such as Nigeria and Kenya have made it difficult for customers to send money to cryptocurrency businesses from their bank accounts.
Customers have to switch to P2P transactions as a way to bypass the laws through non-custodial and let customers trade cash for cryptocurrency amongst themselves.