A recent report by dubbed the 2020 Geography of Cryptocurrency Report ranks three African Countries; Nigeria, Kenya and South Africa among the top ten countries in cryptocurrency adoption. The report by Chainalaysis, an organization that provides data and analysis to government agencies, exchanges, and financial institutions, used its in-house index formula and data from exchanges to measure cryptocurrency activity while also accounting for each country’s population and economy size. The goal was to highlight the countries where most residents have moved the biggest share of their financial activity to cryptocurrency.
Chainalysis estimates measured cryptocurrency activity occurring on the various P2P exchanges and distributing it by country based on the breakdown of countries accounting for web traffic to each platform’s website.
The top ten countries in the Global Cryptocurrency Adoption Index
Africa has the smallest cryptocurrency economy of any region, with just $8.0 billion worth having been received and $8.1 billion sent on-chain in the time period studied.
The report further notes that transfers below $10,000 make up a larger share of Africa’s cryptocurrency activity than any other region, and remittances was a huge driver of this.
During the study period, most of the crypto activity in Africa was conducted on Binance. This is because of the company offers high liquidity and a variety of trading pairs.
However, illicit activity still makes up to 1.4% of the continent’s cryptocurrency activity by volume, in terms of both sending and receiving, which is about average compared to all other regions.
Regulatory Regime in Africa
Despite the increased cryptocurrency excitement and awareness, Kenya’s central bank has previously issued circulars to all Kenyan banks requiring them to refrain from doing business with crypto-based companies.
In Nigeria, the country’s Securities and Exchange Commission (SEC) earlier this week issued guidelines that will see the regulation of crypto-coins and crypto-token investments among other digital assets when “the character of the investment qualifies as securities transactions”.