As Bitcoin continues to lead the way for the crypto industry, local awareness is skyrocketing across the globe. In terms of Bitcoin remittances, Africa is now one of the most active continents. Experts studied the Bitcoin ecosystem in Africa, one of the world’s oldest continents, and found striking parallels with El Salvador.
Bitcoin’s Remittance is Revolutionizing Africa
Last year, El Salvador became the first to accept Bitcoin as legal tender. However, certain characteristics appear to be present in Africa that contribute to Bitcoin’s growth. Most Africans, for example, are unbanked but have cell phones. Furthermore, Africa has a sizable diaspora that sends money to relatives on the continent on a regular basis.
As a result, there are tremendous opportunities for widespread Bitcoin adoption on the African continent today. Money transfers between Africa’s highly mobile populace are a major driver of the Bitcoin boom. Furthermore, there are approximately 30 million Africans in the diaspora, according to reports. These communities of Africans living outside of their homeland add to the considerable interest in Bitcoin in that region.
Did you know that significant African countries such as Nigeria have already taken steps to regulate Bitcoin? However, the majority of the people are still unbanked. As a result, Bitcoin remittance provides a lifeline to a sizable portion of the population.
The Mobile Culture in Africa
Africa, in addition to having a large mobile population, is actively engaged in the “mobile money” discourse. Most Africans already use their cellphones to make mobile transfers; it’s part of the continent’s modern digital culture. As a result, mobile transfers are common in the African continent. Mobile transfers in Sub-Saharan Africa are one of the largest in the world, according to reports.
By 2025, Africa’s mobile transfers could be on the verge of exploding. Experts estimate that by then, over 600 million Africans will have access to mobile wallets. In the next few years, Africa’s mobile culture will definitely provide the groundwork for widespread Bitcoin acceptance.
Now that you understand how Africans are using their cellphones to send bitcoin remittances, Let’s look at the three factors that led to this:
- Accidental Government Backup to Bitcoin
When it comes to Bitcoin acceptance, most African countries’ authorities are adamantly against it. These leaders enacted tough policies that would have otherwise stifled Bitcoin’s growth in their respective countries. Rather than stifling Bitcoin’s growth, these policies have served as a springboard for the cryptocurrency. As a result, more people are becoming interested in Bitcoin. These governments have unintentionally supplied assistance.
In 2020, the Nigerian Central Bank, for example, prohibited foreign mobile money transactions to the country. After approving US dollar payouts for foreign remittances, the CBN took this step. Only Nigerians with bank accounts were able to receive monies from abroad as a result. Furthermore, not all international money transfer providers to Nigeria accept cash payments.
Furthermore, due to the country’s tight rules, the majority of Zimbabweans use Bitcoin. Foreign money was illegal in Zimbabwe, and mobile transactions were restricted. Several citizens of the country are now using Bitcoin to circumvent the country’s harsh rules. These government policies promote Bitcoin as a better payment option for their population.
- Currency Strength
Inflation rates in certain African countries are in the double digits. Zambia, Zimbabwe, Nigeria, Sudan, South Sudan, Ethiopia, Liberia, and Sierra Leone are among these countries. When compared to the dollar, several of these currencies are laughable. The Nigerian Central Bank, for example, depreciated the naira three times in 2019.
In May 2021, the federal bank devalued the naira by 7.6%. Most Africans use Bitcoin remittance to increase their profits. Some workers want to be paid in Bitcoin because it isn’t tied to their local currency. This aspect will serve as a springboard for a larger Bitcoin adoption.
- High Cost of Transfers
Africans who live outside their home nation prefer transferring money. The huge expense of these transfers, on the other hand, is both restricting and frightening. According to projections, transporting $200 to Sub-Saharan Africa by the end of 2020 will cost an average of 8.2 percent. Surprisingly, money transfers between African countries are more expensive. People are now opting for Bitcoin remittances to avoid the exorbitant cost of transfers.
- Education
There are over a thousand languages spoken on the African continent. However, the majority of these civilizations do not speak English. Fortunately, a number of institutions offer education to Africans in order to close the gap. The materials for Bitcoin would be translated into local African languages as part of this instruction. This would eliminate the language barrier as a constraint.
Finally, both positive and negative aspects work together to ensure that Bitcoin is widely adopted throughout Africa. As a result, in the coming years, the continent can only expect a crypto explosion.