The African continent has the potential to become one of the leading cryptocurrency markets in the world. Kenya has most of its population with cryptocurrencies in Africa, according to a report by the United Nations Conference on Trade and Development (UNCTAD). The report says that 8.5% of the population, or 4.25 million people, exhibit cryptocurrencies in the country.
This puts Kenya ahead of developed economies like the United States, which ranks sixth with 8.3% of the population owning digital devices. On the other hand, war-torn Ukraine ranks first, with a share of 12.7% of the population owning cryptocurrencies, followed by Russia (11.9%), Venezuela (10.3%) and Singapore (9.4%). .
The UNCTAD report attributes Kenya’s high ranking to the country’s exposure to the ongoing cryptocurrency market crash. With the cryptocurrency market changing, it is still unknown how Kenya will fare in the coming months. But so far, the country appears to be the African leader when it comes to cryptocurrency ownership.
According to UNCTAD, South Africa is the second largest country in Africa and eighth globally, with 7.1% of the population owning or owning cryptocurrencies by 2021. In Nigeria, which is one of the largest cryptocurrency markets in the world, about 6.3% of the the population owns or possesses cryptocurrencies. This means that out of the country’s population of 211 million owned just over 13 million digital currencies by 2021.
UNCTAD data show that the number of Nigerians who have invested in digital assets is likely to increase in the coming years.
Cryptocurrency popularity peaks in Kenya
UNCTAD notes that the adoption of digital currencies in Kenya is increasing due to the low fees charged by crypto exchanges, the speed with which they can send money and the internet access that allows them to trade online.
According to the report, “Kenya has become a leader in the introduction and use of digital currencies by its citizens”. He noted that “the crypto-economy has grown rapidly in Kenya with more citizens using digital currencies over the last year”.
Cryptocurrencies are a hot topic these days. They have made headlines for their large price fluctuations, their potential as a new way of sending money transfers and even their potential as a new form of currency for developing countries.
But now there is a new development: Cryptocurrencies are also being used by middle-income people in inflation-affected developing countries as a way to protect their households’ savings.
In a report on its findings, UNCTAD acknowledged that cryptocurrencies have grown in popularity as they are “an attractive channel through which to send funds”. The UN also said digital assets are popular with middle-income people in developing countries as they have provided them as a way to protect their savings from inflation.
The UNCTAD report reveals that while cryptocurrencies can enable fast and cheap payments, their use also has potential disadvantages. For example, if the price of a cryptocurrency falls sharply, it could result in a loss for investors who have purchased the digital asset with a loan. As some cryptocurrencies are not yet widely accepted as a means of payment for goods and services, there is a risk that people will use them for illegal activities such as money laundering and tax evasion.
In addition to these concerns about the use of cryptography and its potential risks, UNCTAD has identified that “their use may lead to risks of financial instability”. The report states that the main concern is that cryptocurrencies, due to their interest and high-risk profile, are likely to encourage speculation rather than adoption in retail or commercial environments.