We have been focusing our attention on South America with more and more people turning to crypto as their fiat currencies tumble down against the US dollar. The latter is also in pretty rough shape and will face severe struggles due to the mounting national debt. It is only logical for many citizens of Peru, Brazil, Argentina, and, of course, Venezuela to start looking for alternative ways to trade and store value.
Sub-Saharan Africa Is Different
While many people in Peru are using their Sol-pegged PEN to trade and even buy local goods, the main use of their capital is still to accumulate Bitcoin and Ethereum. These people are trying to hedge against rapid inflation and worrying trends in the global economy instead of adopting crypto on the level of retail merchants. However, it is a completely different dynamic in Sub-Saharan Africa.
The Nigerian Naira has been performing poorly against other fiat currencies. Its volatility is one of the reasons why many locals are using cryptocurrency payments to purchase goods and services. Over 95% of all crypto transactions in Nigeria are related to retailers selling stuff to their customers for Bitcoin and Ethereum.
Other countries like Kenya are also adopting crypto rapidly. Trading volumes on local exchanges are comparatively low, but locals don’t care about the price of assets. They use them because they are more convenient in an environment with a predominantly unbanked population with relatively cheap access to the internet and mobile devices. For them, crypto must be just a little bit more stable than their local fiat to be attractive for use on the lowest economic level.
The Middle East and Asia are trailing behind
With Iran recently announcing that they will be using crypto to pay for some of their imports to avoid international sanctions and many companies in Asia announcing that they will be offering either crypto-based products or accept cryptocurrency payments, the crypto adoption trend seems to be global. However, Sub-Saharan Africa is still spearheading this fashion and maybe a very interesting case study for Central Banks across the Old Continent.