Tech
Africa Has the Fastest Blockchain Adoption Rate as Cryptocurrency Market Grew 1200% in 2 Years
Blockchain-backed entity Cardano, Emurgo Africa has released a comprehensive report detailing the state of Web3 and blockchain technology on the African continent.
Among the many noteworthy revelations contained in the report, it was revealed that blockchain financing across Africa increased by 1,668% between 2021 and 2022, indicating that the adoption of blockchain technology by African countries is the fastest in the world.
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Emurgo Africa’s latest report reiterates that many stakeholders believe blockchain technology presents myriad opportunities for the African continent. The revolutionary technology has proven to have the qualities of transparency and decentralization to solve challenges such as international remittances, financial inclusion and land registration.
More information on the Emurgo Africa report
THE State of Web 3.0 in Africa: Kenya, Nigeria and South Africa Emurgo’s report sheds light on the blockchain landscape in three target markets, Kenya, Nigeria and South Africa. The purpose of this study is to provide a comprehensive report on the state of the Web3 industry in these countries.
According to the report, these three countries were selected due to their high adoption of Web3 technologies and ongoing conversations among stakeholders regarding policy development and regulation of digital currencies. Furthermore, Emurgo Africa says it has noticed a trend of rapid urbanization in target countries, due to infrastructure development, the technological revolution and the growth of the gig economy.
Specifically, the report states that the cryptocurrency market in Africa grew by over 1200% between 2020 and 2021, with Kenya, Nigeria, South Africa and Tanzania in the global top 20 for cryptocurrency adoption. According to the report, this trend makes the adoption of Blockchain by African countries the fastest in the world.
Furthermore, funding for African blockchain startups increased by 1,668% between 2021 and 2022. In clearer terms, $5,165 million was raised in 2021, while 2022 saw substantial growth to $91 million . Additionally, compared to general funding growth, venture capital funding growth was 11 times more when considering the first quarter of 2021 and 2022.
“Investors are eager to fund blockchain startups and companies, and the figure is expected to grow significantly in the coming years.” – State of Web 3.0 in Africa: EMURGO Africa 2023
The problem of regulation
It is now more important than ever that, as the popularity of digital assets continues to increase across the continent, so too does the need for a meeting point between stakeholders and regulators.
It was highlighted in the Emurgo report that as the need for regulation of Blockchain and cryptocurrencies increases, key stakeholders need to work closely with regulators.
To put this into perspective, around 20% of sub-Saharan African countries have banned crypto-assets, while countries like Nigeria, South Africa and Kenya are neither here nor there.
For example, in Nigeria, the Central Bank of Nigeria has not yet lifted its February 2021 ban on crypto transactions in the banking system, while the National Information Technology Development Association continues to develop an adoption framework for blockchain technology.
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To have a clear path to mainstream adoption, the Central Bank of Nigeria is expected to engage with leading blockchain organizations such as the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), which would be aimed at lifting the ban to improve remittances and other barriers to financial inclusion.
Simply put, although Blockchain and cryptocurrencies are nascent technologies, there is a growing need to develop robust regulatory frameworks. As we continue to work towards this goal, potential application areas include; SME financing, supply chain, smart contracts for informal labor markets, governance, digitalisation of business infrastructure, property title registration, verification of education credentials and mobility.