Peer-to-peer cryptocurrency marketplace Paxful has said that there is a rise in the use of digital currencies in Africa, with young people leading the way.
Africa Is Leading a Financial Revolution
Ray Youssef, co-founder of Paxful, said that each month the platform sees around R500 million worth of transactions. Half of those using the marketplace are under 30. They also have a tertiary qualification or are studying toward a post-secondary school qualification, reports CityBuzz.
Youssef states that the surge in cryptocurrencies is due to low fees, transaction speed and safety, and monetary stability. He claims that a “peer-to-peer financial revolution” is being led by Africa. He adds:
When it comes to innovation in financial services, in many ways, Africa has an advantage over the so-called ‘developed markets.’
He went on to say that the continent’s growing middle class have already embraced innovations within the banking world. As such, the introduction of Bitcoin, Ethereum, and Litecoin, etc., are just new financial instruments that are being embraced. “Paxful’s growth on the continent reflects the tremendous appetite for innovation in Africa,” said Youssef.
Cryptocurrencies Provide Stability
In Africa, the use of digital currencies is delivering a source of income for many people. This can be seen in Zimbabwe. In 2009, the landlocked country in southern Africa ceased using its Zimbabwean dollar due to hyperinflation. As a result, other fiat currencies now used in Zimbabwe include the South African rand, the euro, the Australian dollar, the Chinese yuan, and the U.S. dollar, its main circulation currency.
However, due to a limited supply of U.S. dollars, in 2016, the Reserve Bank of Zimbabwe revealed measures to retain the U.S. dollar. These included withdrawal limits and introducing “bond notes” equivalent to the American currency. Residents are also restricted to the amount of money they can take out of the country, capped at $1,000 or 1,000 euros. For many people, simply paying for things is no longer as easy as it sounds.
Unsurprisingly, the crypto market is proving a lifeline to countless individuals who may otherwise struggle. In addition, with crypto exchange Golix delivering a service for the people of Africa – for the time being at least – it’s easier for individuals to get involved in digital currencies.
And unlike fiat currencies, such as the Zimbabwean dollar, cryptocurrencies are providing stability to people who need it the most. With the cashless economy rising in Africa, and millions of Africans seeing the benefits of mobile banking, it may be that cryptocurrencies will become mainstream quicker in Africa than in Western countries.
Do you think Africa will continue to lead a financial revolution and embrace cryptocurrencies fully before more developed nations? Let us know in the comments below.
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