As of 2017, according to the Lawnmower Blockchain Index, blockchain assets outperform by far all global bond and stock indices, with +374% up as opposed to equities with +15.7% and bonds with +3.95%. At such growth levels and the overall bullishness of investors around the globe, it is no wonder that the cryptocurrency frenzy is spreading in places most analysts would not expect – Africa.
The mobile penetration rate in Africa is currently around 80%, which means that people have more access to mobile phones and are well connected digitally. As the banking system, which is built from fiat money in most cases, is a system based on debt, whereas the blockchain economic power is asset-based. Since the African economy has often been burdened with corruption and lack of trust, the use of blockchain, and in particular, bitcoin, in countries such as Nigeria, Botswana, Kenya and Zimbabwe is booming. With more than 1000 vendors now accepting bitcoin as an official means of payment signals the huge unexploited opportunities in the cryptocurrency market in Africa.
According to Cryptocoins News, the popularity of digital cryptocurrencies in South Africa may be owing to the need of fostering cross-border trade, boosting the confidence in businesses and people, and growing the economy without the “care” of the banking system. In addition, the sharp increase in the telecommunication liberalization and the mobile services industry has now made it possible for people to have access to bitcoin. The mobile usage in Africa is now totaling $226 million, which indicates the improving infrastructure for the use of digital cryptocurrency.
According to the South Africa’s Central Bank, however, it is still “too risky” to issue their own cryptocurrency. In the words of the deputy governor of the South African Reserve Bank, Francois Groepe, the bank is open to the idea of launching a cryptocurrency, though mentioning that it will be “too risky for us to do so in an open system”. Given the growing tension between people and the rigid banking system, coupled with the growing popularity of cryptocurrencies in South Africa, a new boom of the asset-based economy may be looming in the oldest continent.