Nadeem Anjarwalla, Binance director for West & East Africa.

Binance - blockchain infrastructure provider - is betting on cryptocurrency as a ‘safe hedge’ for Africa in battling currency devaluation.

Nadeem Anjarwalla, Binance director for West & East Africa says crypto provides a practical buffer against depreciating currencies, a challenge faced by the currency many countries on the continent.

A number of debt-laden African countries have in recent months dropped their exchange rates seeking to open up International Monetary Fund (IMF) assistance.

The worst hit currency across Africa is the Ghanaian cedi, which lost 42.8% against the US dollar last year.

The South African rand is another African currency that has been depreciating in recent months after dropping 9% in 2022.

Now, Anjarwalla says cryptocurrencies are a safe investment option, as they can cushion consumers against depreciating currencies.

“One of the most valuable aspects of Stablecoins in an environment of currency devaluation is that they offer a secure and efficient means of saving and growing money, making them a reliable option for long-term savings,” says Anjarwalla.

“So, African consumers can save their money in Stablecoins, secure in the knowledge that its value will remain relatively stable over time, and even have the potential to grow, regardless of the fluctuations happening in their country’s local currency.”

Despite encouraging use of cryptocurrencies, Binance warns consumers to research virtual assets before taking interest, while acknowledging the relevance of traditional financial systems.

Hannes Wessels, country head Binance South Africa, comments: “Today, the traditional financial system remains a key gateway for participation in the crypto ecosystem through fiat on and off-ramps.

“It allows users to participate in the crypto economy and transfer their funds safely to their bank accounts and currency of choice when needed.

“In other words, the two financial systems are not mutually exclusive but operate in synergy to serve users’ various needs.”