The African continent may be preparing for the adoption of digital currencies; this indication is as a result of a new study that has revealed an increase in the size of cryptocurrency owners on the continent.
South Africa has ranked as one of the top nations in the world, in terms of ownership of digital currencies, according to reports and a tenth of the country’s internet users have a stake in cryptocurrency.
More indications are showing that the continent might just be ready for early adoption of cryptocurrency. In early February 2019, crypto exchange, Paxful, revealed a significant rise in the volume of crypto exchange transactions within the continent.
“This new survey is the latest evidence that, Africans are adopting this emerging technology at a rapid rate. There are geopolitical factors at play that combine to make the continent an ideal petri dish for innovation within the industry”, Paxful noted.
Why Africans would embrace cryptocurrency
Cryptocurrencies appear to be appealing, even, with the air of volatility around it. African currencies have lost grip in the international market and the weakness in these currencies have seen them struggle against alternative foreign currencies.
With the volatile state of the financial system and its effects on emerging markets, a significant number of investors are now seeking the digital currency alternative.
Challenges the adoption poses
Granted that, there has been growth in the ownership of cryptocurrencies in Africa; nevertheless, pockets of challenges exist in its adoption on the African continent.
Digital currencies can be expensive and quite complex for individuals with no digital literacy. The inadequate regulation of online activities also leaves the space open for fraudulent practices. These pose a level of insecurity for some sections of the population who are new to the technology.
For digital currencies to be fully adopted as a solution, a complete overhaul of existing systems, or, rather a significant change, is required because not only financial institutions will be affected, but the entire tech ecosystem, should be ready for the imminent transition.
It must be noted that a significant population of the continent are unbanked, let alone adopting the cryptocurrency phase, yet indications have shown that the crypto financial service would survive.