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Crypto adoption poised to grow in Africa

The overall adoption of cryptocurrency in parts of Africa may still be relatively low, but it has the potential to grow rapidly.

This is according to Luno’s new State of Crypto: Africa report, conducted by Arcane research and launched alongside a documentary that explores the opportunity for cryptocurrencies in Africa.

The documentary, which followed some of Africa’s crypto industry insiders (including the founder of blockchain-based social outreach project, Uziso, Lorien Gamaroff and the founder of the SatoshiCentre in Botswana, Alakanani Itireleng), is now available on Amazon Prime.

Their overriding theme builds on the view that economic and financial issues, such as high inflation rates, volatile currencies, capital controls and a lack of banking infrastructure, are prevalent in many African countries and are helping to create a fertile ground for an alternative to germinate.

They suggest that Bitcoin and some other crypto assets can fill the void since they are “unique in that they combine the wealth preservation properties of hard assets such as gold with the portability of digital currencies, combined with an unparalleled degree of censorship resistance”.

With its demographic and societal trends, a fast-growing, young and mobile-native population, they believe “Africa is well-suited to the rapid adoption of cryptocurrencies” on the basis that the continent “has a need for the utility of cryptocurrencies” more than any other where the focus has always been on investment, speculation, and trading.

A view shared by Chankura exchange’s Thabang Mashiloane who believes mobile money use has prepared the African market for crypto adoption.

“What the crypto community needs to do is to make it seamless for users to switch over from centralised mobile money into decentralised crypto money,” said Mashiloane, who added that the eventual arrival of decentralised finance (or DeFi) to Africa as an incentive mechanism embedded into blockchain networks.

DeFi, as a layer 2 blockchain feature that ensures participants in a decentralised platform get rewarded over a few decision makers in a centralised setting, is economically sustainable over the long term and has enormous potential for Africa, Mashiloane added.

With the blockchain ecosystem in Africa still very small compared to Asia, Europe and North America, Mashiloane said the “opportunity for African entrepreneurs is translating the complicated blockchain world into more understandable local use cases” noting that DeFi is “more suitable to solve African problems” than in other continents where hundreds of DeFi platforms have emerged.

The Luno report’s release comes as the Akoin project partners with UNL and Venturerock to launch the Human Unlimited Foundation which aims to use #tech4good to fuel the fight against COVID-19.

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