Sumary of Cryptocurrency flows in Africa:
- The use of cryptocurrencies in Africa is on the rise, as digital currencies offer a swift, convenient, and direct peer-to-peer channel for remittance payments, international commerce, and savings.
- To better understand the global landscape around cryptocurrency use, Chainalysis, a leading cryptocurrency market research firm, recently released a report examining key geographic trends around the financial tool, including in the nascent African crypto market.
- Although Africa captures only 2 percent of the global value of all cryptocurrencies received and sent (Figure 1), making it the world’s smallest cryptocurrency economy, the rising prominence of this innovative form of money is altering traditional financial flows to and from the continent.
- Figure 1. Summary of Africa’s cryptocurrency usage (July 2019-June 2020) Source: “The 2020 Geography of Cryptocurrency Report,” Chainalysis, 2020. Chainalysis finds that the largest crypto channel connects Africa to East Asia, although channels to Northern and Western Europe and then North America trail closely behind (Figure 2).
- According to the report, the particularly high volume of funds sent from Africa to East Asia stems from the magnitude of Chinese nationals working in Africa.