Why Binance and Akon Are Betting on Africa for Crypto Adoption
In advance of her “Crypto Across Emerging Markets” panel at Consensus: Distributed on May 11, Leigh Cuen is writing a three-part column on how cryptocurrencies are used in the developing world. The first installment explored bitcoin adoption in the Middle East.
The future of money will be defined by African markets, where cryptocurrency awareness and usage surged dramatically over the past year.
Aspiring entrepreneurs like Ghanan high school student Emmanuella see bitcoin as a tool for international trade, not just speculation. He plans to buy some as soon as he turns 18 and can apply for a local mobile money account.
“I will use it to open up a business,” he said.
Ghanian exchange founder Nawaf Abd of eBitcoinics said local demand for bitcoin increased since the coronavirus crisis began, even though his physical stores in Accra and Kumasi are both closed. Through trading online, he continues to supply local buyers with bitcoin. He said his sales were up 70% in March, so much that some days he sells out of bitcoin, but declined to say how many users that entailed. His servers briefly went down in April due to overwhelming traffic on the site.
According to researcher Matt Ahlborg, Ghanian volume at peer-to-peer exchanges LocalBitcoins and Paxful increased to roughly $6.2 million over 90 days of the lockdown, up from roughly $4.2 million the previous 90-day period. Yet another Ghanan student, 18-year-old Derrick Bannerman, bought his first bitcoin during the last dip.
“I already had interest but the period seemed like the perfect moment to do something about my interest in bitcoins since we’re at home doing nothing,” Bannerman said from Accra. “The thing that interests me the most is its increasing value, popularity and security.”
And Nigerian bitcoin market activity is nearly 10 times Ghana’s. Ahlborg’s metrics showed roughly $63.9 million worth of Nigerian bitcoin trades during the lockdown.
With some 60% of Africa’s 1.25 billion people under the age of 25, local traders, as well as crypto behemoths, are placing their bets on future growth.
For example, Yele Bademosi, co-founder of the Binance-backed social payments startup Bundle, said thousands of Nigerians downloaded the Bundle app since it launched in late April.
There’s been some traction in Ghana as well, where Bademosi said the startup is looking to expand. But so far Nigerian demand is overwhelming enough. Roughly a 1,000 people signed up for an introductory Zoom webinar about bitcoin, he said, although there was only room for 100 to attend.
“It’s about making it easy to move value, regardless of whether it’s cash or crypto,” Bademosi said. “You can send [money] to any [smartphone] number in your contacts, even if they’re not on the app yet.”
For now, the app offers a fiat on-ramp to users with Nigerian bank accounts and supports bitcoin, ether, BNB, plus will soon support Binance’s dollar-denominated stablecoin BUSD.
“We have users who were interested in bitcoin but felt it was a little too difficult to get,” he said. “People use cryptocurrency as a remittance gateway as well as a hedge against any devaluations of local currency, plus speculative trading.”
And local entrepreneurs aren’t the only ones to notice the opportunity on the continent.