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Bitcoin in Africa

How To Buy Bitcoin In Africa

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Cryptocurrency is relatively new in Africa. But it has garnered serious interest and demand over the years. This is clear, as Google Trends shows Africa countries rank top for bitcoin and other related searches. If you looking for where and how to buy cryptocurrencies, there are legitimate platforms that allow users to buy bitcoin or any other cryptocurrencies using local currency. 

In this guide, we provide the various platforms available for Africans to buy bitcoin or any other crypto-coins. Also, we made a comprehensive list of African countries where bitcoin ATMs are available; the coins supported and their respective locations.

There are different ways one can buy cryptocurrency. They include face-to-face trading in offline shops, using crypto-ATMs, crypto exchanges, etc. The availability of each option depends on which coin to buy and the user’s location. For example, bitcoin is the most popular cryptocurrency and can be bought using any of the options above. 

Cryptocurrency exchanges are a popular choice amongst users and probably one of the readily available platforms in Africa. This will be our focus for this post.

What is Cryptocurrency exchange

Crypto exchanges are platforms where users can buy and sell crypto or exchange them for fiat currencies. 

There are different crypto exchanges and the services they offer vary. But they have one thing in common. Before you can buy bitcoin or any other crypto-coins, they will require you to create an account. 

Signing up is the first and necessary step. You will ask to for personal details such as name, email address, and any government-issued identity card for verification.

Cryptocurrency exchanges in Africa

Crypto-to-Fiat Exchange

Crypto-to-fiat platforms enable users to exchange their local currencies for cryptocurrency. Some also allow users to trade cryptocurrencies against their local currency.

Notable examples of these types of exchanges in Africa include;

P2P Exchange

A peer-to-peer crypto exchange is like a marketplace where users meet to buy and sell coins. This platform provides anonymity and makes use of escrow service to secure and ensure a smooth transaction between parties involved.

Examples of P2P exchanges available to African countries include

Trading Exchange

These exchanges are like stock and forex exchange. They provide users with the platform to trade crypto for another crypto and make a fee from them. In these exchanges, we have different markets. For example, we have BTC market; bitcoin serves as the base currency which different coins are traded against. Other popular markets include; USDT, ETH, etc. Popular trading pairs include; BTC/USDT, ETH/BTC, XRP/BTC, ETH/USDT etc.

Examples of crypto trading exchanges accessible to Africans include Binance, Poloniex, Bittrex, etc. 

Binance, for instance, is a popular choice amongst cryptocurrency traders in Africa. They have a payment gateway that enables users in countries like Nigeria and South Africa to buy crypto directly with their local currency.

It’s also important to note, buying and selling of cryptocurrencies like bitcoin, ethereum on social media platforms like WhatsApp, Telegram is a common practice here in Africa. However, users are cautioned to stay away from such methods. They are highly risky and vulnerable to scams. 

Using bitcoin ATMs in Africa

Buying bitcoin and other cryptocurrencies using ATMs is fast becoming a popular option across the globe. According to Coin ATM Radar, there are over 7000 bitcoin ATMs installed in over 70 countries in the world. Some African countries already have bitcoin ATMs installed, and the list keeps growing.

Here’s a list of African countries with bitcoin ATMs, coins supported and their respective locations.

CountriesNo of Bitcoin ATMsLocations/Coin Supported
South Africa7Bitmart, Nelspruit, Mpumalanga. (Bitcoin, Ether, Litecoin, Dash, Zcash)

Saverite Florauna, Pretoria. (Bitcoin & Ether)

Sasol Ninapark, Pretoria. (Bitcoin, Bitcoincash,  Ether, Litecoin, & Monero)

Sandton City, Sandton, Johannesburg. (Bitcoin)

Eikestad Mall, Stellenbosch, Cape Town (Bitcoin, & Dash)

Ankerpay, Victoria Junction 8, Cape Town (Bitcoin, Ether, Dash)

38, Wale Street, Cape Town Bitcoin, Cape Town
Zimbabwe1Batanai Gardens, Harare (Bitcoin & Litecoin).
Ghana2Thunder Solutions Limited, Accra. (Bitcoin).
Nigeria1Dazey Lounge Bar, Ajah, Lagos (Bitcoin).
Kenya1Kenrail Towers, Nairobi (Bitcoin, Ether, Litecoin, & Dogecoin)
Djibouti1Appart Hôtel Moulk, Centerroute de l’aéroport, Djibouti (Bitcoin)
Botswana1Airport Junction Mall, Gaborone. (Bitcoin)
Uganda1Ggaba Road, Uganda Post Office. (bitcoin, Bitcoincash, & Ether)
Source: Coin ATM Radar

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Bitcoin in Africa

The rise of CBDC in African economies

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Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

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Bitcoin in Africa

Why the Nigerian Government is Panicking About Bitcoin

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Fear, social media clamour, open outrage amongst citizens and vivid apprehension of the outcome of what the ban on crypto means for traders and investors as well as fintech companies. To some, it was a welcome development aimed at driving the ship of the country towards a better shore. To others, it was another rule by the Nigerian government to clamp down on technology. On February 5, 2021, the Central Bank of Nigeria issued a circular directing all commercial banks to close the accounts that are connected to cryptocurrency platforms. This was later given further clarification in a 5-paged article stating a plethora of reasons why it is not advisable to trade cryptocurrency. The article explained that the ban does not mean that Nigerians can no longer trade cryptocurrency. However, it is a measure to dissociate commercial banks from all forms of crypto trading which are considered wrong. 

CBN’s reasons for banning cryptocurrency 

The 5-paged article was released 2 days after the crypto ban. It explains why it is inadvisable to trade cryptocurrency and the justification behind the orders of the CBN. Rather than give a fair definition of cryptocurrency, CBN focused on the partial lapses of the currency in explaining its meaning. In the explanatory article, cryptocurrency was defined as “digital or virtual currencies issued by largely anonymous entities and secured by cryptography. Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.” 

While explaining the rationale behind the ban, the circular reiterates that Nigeria is not the first country to place restrictions on cryptocurrency. Countries like China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia have placed certain restrictions on the trading of cryptocurrency. Quoting various instances where cryptocurrencies have been derided by various persons and institutions without reference to cases where Bitcoin has been praised by reputable investors and institutions. In the latter instance, Bitcoin was referred to as the new gold.  

One of the reasons behind the ban is that the cryptocurrencies are issued by unregulated or unlicensed persons which contravenes the CBN Act of 2007. Also, its anonymity and decentralization quality show that “its patrons and users value anonymity, obscurity, and concealment”. The CBN explained that there would be no need for such concealment if the activities of users were legal. Nevertheless, the CBN forgot that apart from using crypto for transactions, it can also be used as a store of value. 

Lack of centralization and the accompanying issues of anonymity are the predominant reasons stated by the CBN before its ban on cryptocurrency. 

You may wonder why the CBN waited till 2021 to place a ban on crypto despite its popularity since 2010. This reason is not far-fetched as it explains the true reason behind February directives on cryptocurrency. 

Hidden reasons behind the ban on cryptocurrency 

Few months after the directives were issued to commercial banks in Nigeria, Chainalysis, a blockchain research firm, issued a report that the volume of a dollar received from crypto users in Nigeria has grown between 2020-2021. In May, Nigeria received $2.4 billion worth of crypto compared to $684 million received in December 2020. The increase occurred after the clampdown on crypto by the central bank. This shows that CBN orders have little or no effect on cryptocurrency trading. 

Last October marked an important turning point in the history of Nigeria. It marked a month of consciousness amongst the youths, protest rocks every state in Nigeria against police brutality and an end to the Sars police unit under the hashtag #Endsars. The protest was the first of its kind after more than a decade. During the EndSars protest, various groups sprang up to receive donations for demonstrators to provide them with first aid, food and security. The accounts of these groups were suspended which led one of such groups, Feminist Coalition to start receiving Bitcoin for donations due to its decentralization. About $150,000 worth of Bitcoin was received which was used to support EndSars protesters.

 Jack Dorsey, Founder/CEO of Twitter reshared the FemCo Bitcoin donation page with the caption “donate via bitcoin to help EndSars”. His actions might have explained the ban on Twitter by the Nigerian government. The use of cryptocurrency to fuel such protests is the main unstated reason behind the recent ban. 

In conclusion, the Nigerian government may pretend that the clampdown on cryptocurrency is a result of its lapses usually quoted by various countries as reasons behind restrictions. However, the activities of the Nigerian government is the fear of the inability to control the currency. It is gradually becoming the action of the current government to restrict whatever it can not control. 

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Bitcoin in Africa

How Demographic Trends are Pushing Cryptocurrencies Adoption in Africa

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Demographic trends

The African crypto market has seen a tremendous boom in the last few years. Driving this growth are a myriad of factors among which are economic inequality, volatile fiat currencies, low financial inclusion as well as high unemployment rates. These drivers of market growth are also greatly intertwined with Africa’s unique demographics which entail the distribution and categorization of the population.

The goal or aim of many cryptocurrency projects and the movement of the community in general is to get to a point where they’re widely used and accepted by individuals, corporations and governments. This implies mainstream adoption, much like the pervasive nature of mobile banking today. Africa presents unique opportunities owing not just to the socioeconomic clime but it’s demographics as well.

For cryptocurrencies to achieve mainstream adoption, they would have to in a sense become the norm and be widely accepted and recognized by virtually all corners of society, much like Facebook is in the social media world. In Africa, despite the size of the crypto market, cryptocurrencies are still a good distance away from what one would describe as popular acceptance. The sector is growing no doubt, however, that growth is reflective of Africa’s unique demographics and population scene.

It is without question that the African continent is the youngest, in terms of median age at 19.7 years. There are about 600 million people aged between 15 and 45 in Africa, representing nearly half of Africa’s population. Many nations, especially in Sub-Saharan Africa are in stage 2 of the demographic transition (high birth rates and high death rates – relatively low life expectancy) which is representative of the economic climes of these nations. A report found that around 13 million young Africans enter the labour market each year against 3.7 million jobs, most created by the informal sector. Therefore many African youth are laden with economic difficulties at that important time in their lives.

However, Africa’s young population, generally speaking, has a greater proclivity for being more open minded to technology adoption. Education and literacy has played a role in this with Africa’s literacy rate at around 70%. While not comparable to that of other continents, this rate is driven greatly by the large young population Africa boasts of. In any case, seeing the economic conditions of many African countries, and a tendency for young people to adopt and/or trust new technologies better and faster than other age groups gives some explanation to how quickly the crypto market is growing on the continent. As the years go by, the level of adoption would inevitably continue to increase as the current youth population expands till it gets to the point where blockchain becomes so pervasive that it achieves the necessary trust and acceptance to become mainstream.

Right now, in some African nations, that line is being crossed already with central digital currencies in development.

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