Notwithstanding the challenges that the year posed, the African crypto-economy has been on the rise. Many industries were shaken, but crypto witnessed immense growth and investors’ interest even with the outbreak of Coronavirus pandemic.
With a minor scare in mid-March, when bitcoin (BTC, +5.21 per cent) collapsed 55 per cent in one day, landing at $3,782, and a quick bounce back and ironically gained recognition as an emerging asset. Hedge funds, billionaires, and publicly traded corporations have allocated treasuries to the digital or virtual currency created in 2009 that uses peer-to-peer to say nothing of the little guys.
Hitting a new all-time high of nearly $20,000, crypto remains one of the few areas that managed to thrive in the economic downturn the pandemic came with. While the virtual coin has previously recorded big gains followed by a steep decline, experts argue that this time may be different, as the currency not just breaks key resistance levels but has also sparked interest among corporations, investors, and financial institutions
More than ever before, it has become common to hear major financial institutions embracing Bitcoin. Moreso, the regulatory discussions around digital currency are a clear sign that economies are preparing to adopt a digital currency to complement fiat currency.
Recently, Nigeria’s Securities and Exchange Commission (SEC) announced it would regulate trade in certain digital currencies to provide protection for investors and to ensure transparency. The decision to regulate the sector highlights the country’s recognition of the potential of cryptocurrency.
Nigeria has continued to witness a huge rise in the adoption of digital money as a means to store value, preserve wealth, trade, and settle day-to-day payments. Another great use case for crypto, popular with the local traders and businesses in Nigeria, is helping them hedge against weak naira partially caused by the shortage of US dollars in the country.
Since its launch five years ago, global transactions on the Paxful platform, a leading peer-to-peer cryptocurrency marketplace where buyers and sellers are connected for business, has grown by over 25 per cent from October 2019 to October 2020. A large proportion of the transaction is attributed to the African market, with Nigeria leading the pack.
With over 620,000 active Nigerian users on its platform, the company says Nigerians traded around $15 million worth of Bitcoin in April 2020 alone, making the country the leader in the African region.
“Nigeria, Ghana, Kenya, and South Africa are our main markets in Africa. No question emerging markets are the future of the crypto economy. That’s been clear to us for some time, as we see daily how tech-savvy Africans are using Bitcoin to invest, trade, send money abroad and accumulate wealth.
“Bitcoin helps improve lives and gives opportunities for personal and entrepreneurial development. Paxful is all about bringing financial inclusion to the emerging world and we’re ecstatic to help so many people with limited access to the traditional financial services,” Paxful CEO and co-founder, Ray Youssef, said.
To consolidate its wins in the Nigerian market, the company employed local industry experts dedicated to the Nigerian market and became a premium member of Nigeria’s FinTech Association. The partnership will help Paxful deepen its integration in the country’s crypto industry, become an important part of the local financial ecosystem, and protect its Nigerian users better.
Recent data from the company revealed that Nigeria leads Africa in peer-to-peer trading in 2020, posting monthly volumes of over $66 million, followed by Ghana, Kenya, and South Africa respectively.
Committed to providing users with a cost-efficient, accessible trading system on its platform, Paxful is strengthening Nigeria’s crypto market with varied payment methods that meet the needs of users. The company currently has over 300 payment methods all geared to meet users’ needs and includes a variety of local payment options, including BuyCoins, Bitsika, and Carbon.
As part of the company’s localisation efforts, Naira Token, another stablecoin, was recently introduced as a payment method to the platform. With the Naira Token, users can perform fast, publicly-verifiable, borderless transactions with a fiat equivalent.
With the growing demand for stable digital currencies amidst fears of economic recession and the high volatility of traditional crypto assets, Paxful added USDT (Tether) to its platform. The addition came with a hedging option, allowing users to instantly convert BTC to USDT and vice versa, helping the users to protect their funds during Bitcoin price fluctuations – a feature that was well accepted in Nigeria.
To build 100 schools, with access to water wells and community gardens for sustainable agriculture, Paxful’s #BuiltwithBitcoin initiative has become a testament to the power of cryptocurrency to improve and impact lives.
In 2020, the company built the fourth school with Bitcoin in Nigeria. The school located in the Ankara Nandu community of Sanga Local in Kaduna state will serve an estimated 100–120 children between the ages of three and six years old and double as an adult education center in the evenings.
“We chose this particular community because of the lack of necessary resources and limited school infrastructure. They are in dire need of quality learning spaces and this school is an honest representation of the impact Bitcoin can have on societies as a whole, and more specifically, how it can enhance education,” Youssef stated.