For years now, the world has been abuzz with institutional buy-in for cryptocurrencies. We’ve seen many national governments around the world launch their own research into how to use the blockchain for all sorts of fintech advances.
A new study from a firm called Arcane Research suggests that Africa is a new frontier for cryptocurrency and blockchain initiatives.
Mohammad Musharraf at Cointelegraph reports that African countries generally have high rates of cryptocurrency adoption, for example, with 13% in South Africa and 11% in Nigeria.
It seems that as with other kinds of technological innovations, Africa is somewhat of an untapped market for things like crypto exchange technologies.
However, the study also notes no less than four obstacles to widespread African growth in this sector.
The first one is mining – a lack of mining equipment would perhaps depress the adoption of cryptocurrency systems on the African continent. By contrast, most of the centralized mining systems for Bitcoin (and some other coins) are in China, where national officials are preparing to institute the first central bank digital currency of its kind or in other words, digitize the yuan.
Another obstacle cited is the lack of merchants, which seems like a market problem that could easily be adjusted.
The other major roadblock, Musharraf writes, consists of lack of smartphone penetration and Internet connectivity, where not having the right devices and connections could prevent African consumers from jumping on the bandwagon.
On the other hand, there are green shoots.
One key marker of national cryptocurrency participation is the Binance platform, which is quietly becoming a global presence by integrating crypto-0fiat pairs for various national currencies onto its portal. Now, Binance CEO Changpeng Zhao says African currencies are being researched. As Musharraf writes: “The founder of world-leading cryptocurrency exchange Binance, Changpeng Zhao, said that Africa is an untapped market for cryptos, and the exchange was working on offering its services on the continent.”
Look for Africa plays in the crypto market, as Bitcoin and blockchain heat up this year.