Cryptocurrency use in sub-Saharan Africa is becoming mainstream rather than speculation, according to a report by blockchain analytics firm Chainalysis.

The report called “How Cryptocurrency Meets the Economic Needs of Residents in Sub-Saharan Africa” revealed that the number of small retail transfers has increased, despite the bear market that occurred in May. On the other hand, transfers of different sizes have decreased.

According to the study:

“If many of the people doing small retail transactions trade cryptocurrency out of economic necessity, especially in countries where the values ​​of local fiat currencies are falling, as we have seen in Nigeria and Kenya, for example, then those people may be more willing to continue to operate despite price declines.”

Source: Chainalysis

The report noted that many youth in the region were taking the cryptocurrency route to build and preserve wealth despite scant economic opportunities.

Based on an interview with Chainalysis, Adedeji Owonibi, founder of Convexity, the Nigeria-based blockchain consultancy, noted:

“We see a lot of day traders who are trading to make ends meet.”

He added:

“We don’t have large traders at an institutional level in sub-Saharan Africa. The people driving the market here are retailers. Nigeria has a ton of highly educated young graduates with high unemployment rates, no jobs available: cryptocurrencies for them are a rescue. It is a way to feed his family and meet his daily financial needs.”

Chainalysis found that the uniqueness of sub-Saharan Africa was linked to the high use of peer-to-peer (P2P) platforms and the retail market based on witnessed transaction volume. According to the report:

“Retail transfers account for 95% of all transfers, and if we look at just small retail transfers under $1,000, the share becomes 80%, more than any other region.”

Source: Chainalysis

With P2P exchanges accounting for 6% of the total crypto transaction volume in sub-Saharan Africa, they are a critical part of the ecosystem. This is double that of the South and Central Asia and Oceania region, which ranks second.

Source: Chainalysis

Creativity played a critical role in allowing major P2P platforms like Paxful to set foot on African soil. For example, connecting Chinese and Nigerian players with gift cards.

Ray Youssef, the CEO of Paxful, added:

“We had to get Bitcoin into Africa, which was difficult because it is very difficult to get money out of Africa. We needed a clever hack to make that happen. That trick ended up being gift cards. That brought Bitcoin to Nigeria and then to the rest of West Africa.”

Meanwhile, cryptocurrency exchange Binance recently launched a cryptocurrency educational tour in five francophone countries to drive blockchain adoption and financial accessibility, reported Blockchain.News.

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