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Africa has long been a continent of rich promise and potential, but has suffered due to economic underdevelopment and poverty. However, the cryptocurrency revolution which is sweeping across Africa could potentially change this narrative, bringing modern finance to the fingertips of millions of Africans who have not had access to such services so far. It is a sign of how much Africans are moving towards cryptocurrency that monthly crypto transactions, both in and out of the continent, under $10,000 in value, shot up by more than 55% over the last one year, reaching as high as $316 million in value in June 2020.

These numbers are likely to keep rising, and show an interesting trend as well, in that while cryptocurrencies are largely used by companies and financial traders elsewhere in the world, they are being primarily used for commerce in Africa. Individuals and small enterprises in Kenya, Nigeria, Ghana and South Africa are responsible for the majority of this activity. One of the biggest draws of cryptocurrency for Africans is that it cuts out the middleman, and that they are not controlled by central banks, making them theoretically impossible to restrict or manipulate by governments. African nations have been vulnerable to economic crises which have led to the value of their currencies fluctuating wildly, so they are understandably attracted to one which is not so unstable. Additionally, most Africans use mobile banking, much more than traditional banking, which also ties in to their preference for digital currencies and cryptocurrencies.

Another factor that aids this popularity in Africa is the prevalence of online gambling. Africans are quite fond of online gambling and sports betting, and those sectors have been leading the way for crypto adoption on the internet as well. There are several online casinos which offer jackpot slots for bitcoin, for example, where users are able to place bets using cryptocurrencies, which makes them very attractive for those who invest in crypto, as well as those looking for safe and anonymous transactions.

The rise of crypto usage in African economies such as Ghana could actually lead to those economies being stronger and more resilient to economic crises in the long-term, as vast numbers of the population would not be as vulnerable to swings in the value of the fiat currency. Another factor that has aided crypto adoption is that it is much cheaper to send money back to Africa for those living abroad by using cryptocurrencies, as compared to wire transfers and other traditional methods of sending money.

Traditional remittances require the sender to pay a fee that could be as high as 20% in some cases, while also having to bear the cost of currency conversion. Cryptocurrency transactions do not have either of these costs, making them virtually free. However, there are risks that come with this usage as well. Crypto prices can be volatile, with the example of Bitcoin in 2017 as a cautionary tale, where prices rose extremely high but then fell quite as fast as well.

At the same time, digital currencies are largely unregulated across most African countries, which could be a problem for those looking for grievance redressal or if they have been the victim of frauds. Crypto is also not completely straightforward, so it is important for those looking to invest in it or use it to be well-educated about the technology and its implications. Not doing so could leave people vulnerable to scams and theft, which would then wrongfully create the impression that crypto is an unsafe asset class or medium of payments, when the truth is that crypto is probably the safest way to transact online today.