Bitcoin remains the most dominant cryptocurrency in Sub-Saharan Africa, while rising inflation makes Turkey the fourth country worldwide in raw crypto transaction volume rating.
The crypto analytics firm Chainalysis has published a few exerpts from its upcoming 2023 Geography of Cryptocurrency Report, to be revealed in full in October. They shed light on the changes in crypto landscape of Sub-Saharan Africa and MENA.
Although Sub-Saharan Africa has the smallest crypto economy of all regions (2.3% of global transaction volume), crypto has penetrated key markets between July 2022 and June 2023.
The region citizens traditionally prefer Bitcoin, which makes up a bigger share of transaction volume there than in any other territory (9.3%). However, lately, some market participants have turned away from Bitcoin towards stablecoins, due to their low price volatility. Besides, interest in altcoins has been growing across the region in the given period.
One of the most fervent crypto adopters is Nigeria, one of six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year. The evidence suggests people in Nigeria use crypto as an alternative to unstable naira and other national economic challenges. In early 2023, the inflation in the country stood at over 20%. Statistics show that interest in Bitcoin and stablecoins was rising when the naira’s value decreased sharply, e.g. in June and July of 2023.
It is no wonder that 99% of Nigerians are more aware of Web3 and crypto concepts than people in major Western economies.
Ghana, where inflation reached 29.8% — its highest level in two decades – also ranks high in the crypto adoption index, along with Kenya and South Africa, which face similar problems.
The forecasts for cryptocurrency future in Sub-Saharan Africa are optimistic, due to increased regulatory clarity and grassroots adoption stimulated by greater day-to-day need for cryptocurrency.
The Middle East & North Africa (MENA) has the sixth largest crypto economy among the regions studied by Chainalysis. It has an estimated $389.8 billion in on-chain value received between July 2022 and June 2023, representing nearly 7.2% of global transaction volume.
In MENA, Turkey dominates in terms of raw transaction volume. Morocco and Iran also stand high on the crypto activity ranking. Israel and UAE exhibit a much higher share of crypto activity taking place on DeFi protocols.
Meanwhile, crypto activity in Turkey mostly happens on centralized exchanges, since its users buy crypto to fight currency devaluation. Moreover, local citizens turn to stablecoins, to avoid even more volatility. USDT is the crypto asset most commonly purchased with the Lira across global exchanges.
Due to the rising inflation that reached nearly 60% in August 2023, Turkey is now ranking fourth worldwide in raw crypto transaction volume ($170 billion over the last year. That puts it behind only the United States, India, and the United Kingdom. Turkey is also the top country in the region by web traffic to NFT platforms.
UAE regulators have remained at the forefront of the industry, attracting young tech entrepreneurs, and innovative blockchain companies. Remittances are an important use case for crypto to address in the UAE and the broader region.
At the same time, no country saw its crypto economy grow more during this period than Saudi Arabia, with year-over-year transaction volume growth of 12.0%. Not only retail investors but also local institutions see a long-term value in crypto.
To sum up, the crypto growth in MENA region has two main reasons. In countries with unstable fiat currencies or high inflation, crypto acts as a hedge to safeguard wealth. At the same time, users in more economically stable countries like the UAE are inclined to explore more investment-focused use cases.