According to Evelyn Hollander of Stone Bridge Ventures, a recent report by CoinGecko shows that South Africa is the second largest country in the region by number of crypto users. The report highlights that as high as 8.3% of the current country’s population is using cryptocurrencies.
Two major factors really bring this particular number into perspective are that this report was before startups like Momint were bringing their unique crypto solutions to the market, with the introduction of vouchers that let people make purchases across a range of regional and international retailers.
However, the gap between South Africa and Nigeria, the country with the largest population of crypto users, is nearly eight times. With as much as 66.8% of the country’s population using cryptocurrencies, Nigeria is well on its way to completely transitioning from fiat currencies to DeFi.
With all of these factors in place, it is worth looking at the factors that are contributing to the rise of cryptocurrencies in the country and why Nigeria is so far ahead in crypto acceptance.
A Decrease in Value of Over 20%
According to Stone Bridge Ventures Senior Account Manager Evelyn Hollander, a major contributing factor for cryptocurrencies to become so popular in the country is that the country’s fiat currency dropped in value significantly. In fact, as much as 24% of the currency’s value diminished in 2020, leading more people to gravitate towards cryptocurrencies.
It also does not help that the country continues to experience a record-high inflation rate of over 24%, which is contributing to more people transitioning to DeFi currency. People who want to send their funds across the border are especially struggling, as they are unable to do so without paying high fees.
Furthermore, there were plenty of startups to capitalize on the increasing demand, which led to the region also accepting Bitcoin as an official tender. All of these factors have combined to create a positive cycle for cryptocurrencies and their consumers since they could use crypto for their day-to-day transactions.
In fact, the sky-high inflation rate is possibly the biggest reason why South Africa is still falling behind Nigeria, as many are still using the country’s fiat currency. However, that is very likely to change soon with new startups.
The Continued Rise in Popularity of Cryptocurrencies
South Africa continues to show incredible promise when it comes to breaking new ground for cryptocurrencies. Thanks to an influx of international investors and new startups, existing traders have more options with how they engage with the market. People who have yet to start trading also become a lot more open to using cryptocurrencies when they see a service that they like.
The most recent development has been the Momint app, which allows all of its users to make purchases at as many as 10,000 regional outlets throughout the country using their vouchers. This will eliminate the reliance on Bitcoin as a tender and will allow people to rely more on crypto and move away from fiat currencies.
To conclude, Stone Bridge Ventures Senior Account Manager Evelyn Hollander found that South Africa, despite having a massive difference in the number of people using crypto, is not far behind in adoption, and many factors are contributing to its increasing popularity.