According to reports from the African Blockchain 2021, financing increased between Q1 2021 and Q1 2022 by 1.668 percent, going from $5.1 million to $91 million. The lack of widespread legacy banking systems and a sizable population of people who were predominantly unbanked were major factors in the rise and expansion of cryptocurrencies throughout the continent. Although it is still in its infancy, blockchain technology has gained appeal on a global scale and is expected to become as widespread as the internet was in the 1990s. With blockchain-enabled more efficient payment trails, Sub-Saharan African nations including Nigeria, South Africa, Kenya, and Ghana have witnessed a significant uptake of crypto assets to access.

Because people who ordinarily have little trust in one another can cooperate without going via a neutral central authority, The Economist refers to blockchain technology as “the trust machine.” Blockchain technology may very quickly resolve the issue of the common currency that African leaders have advocated but has remained a mirage due to political influence and control by its colonial rulers.

The 55 African Union member nations’ acceptance and construction of the African Continental Free Trade Area (AfCTA) aim to unite around 1.3 billion people with a combined gross domestic product (GDP) estimated at US$3.4 trillion. This noble notion aims to bring all Africans together, regardless of their political and geographical allegiances.Blockchain technology has the potential to address the vast array of issues the African continent is currently experiencing.

The virtues of blockchain technology have resonated throughout numerous industries, expanding the boundaries of technology. Some people believe that blockchain technology is the future. Therefore, the adoption of blockchain technology in Africa may result in the replacement of outdated, conventional administrative processes. Blockchain could promote intra-continental trade by uniting African nations and facilitating free trade agreements through regional currencies.

Despite being slow, blockchain technology adoption in Africa is progressing. People and companies are starting to accept the new phenomenon, which has gained popularity due to the rise of Bitcoin. It is anticipated that this new trend will become the norm in many African communities in the years to come, driven by the numerous benefits associated with groundbreaking technology. Several African nations have embraced the decentralized strategy, particularly in the banking and financial industry.

For instance, a distributed database that is encrypted and safe is used by banks in South Africa such as BSA, First National Rand, Investec, Nedbank, Standard Bank, and the South African Reserve Bank. While the rest embraced a public blockchain, the private banks adopted a private blockchain. Kenya is not excluded. The adoption of BitPesa, a platform for money transfers that converts digital currencies like Bitcoin to regional African currency without the help of intermediaries, is on the rise in the nation. In addition, Nigeria has named Bitt Inc as technical partner for the introduction of the eNaira digital currency at the end of 2021. Rwanda has a project called Bitland in the land management sector that uses the Ethereum blockchain to safeguard land ownership by creating land details available to the public

The development of a national database using blockchain to hold student IDs and track their performance was announced by the Ethiopian minister of education last year. Blockchain-based projects were developed by Wisekey & Microsoft in collaboration with the Rwandan government. Other countries with blockchain efforts include Kenya, Tunisia, and the Ivory Coast. The Central African Republic became the second nation after El Salvador to accept bitcoin as legal cash in April of this year.

Africa’s cryptocurrency market is currently the third fastest-growing in the world and is progressively luring significant investments. According to CVVC’s African Blockchain Report 2021, blockchain firms across the continent raised $91 million in the capital in the first quarter of 2022, a startling 1,688 percent increase in cash flow over the same period in 2021. Between July 2020 and June 2021, the adoption rate was over 1,200, with particularly high adoption rates in nations like Kenya, South Africa, Tanzania, Nigeria, and Ghana. $127 million was raised in 2021, accounting for 0.5% of all blockchain investment, with 96% of that money going to Nigeria, Kenya, South Africa, and Seychelles. Fintech companies contributed $67 million (53 percent) of the total amount raised for blockchain funding.

The ecosystem has so far gotten off to a strong start in Q1 2022 with MARA, a pan-African cryptocurrency exchange, raising $23 million; Jambo, a Congolese software development business, scooped $23 million; and Afriex, a Nigerian e-wallet provider offering remittance services, bagged $10 million. The largest funding round to date was completed by the South African exchange VALR, which closed a major deal in March earning $50 million from a series B round. While no blockchain or cryptocurrency unicorns have yet been spotted on the continent, this is projected to change within the next two to three years.

Meanwhile, a number of tech unicorns have incorporated blockchain into their operations, including Senegalese fintech firm Wave and Interswitch, a major player in digital payments in Nigeria. The goal of another initiative, Adanian Labs, a Pan-African incubator established in 2020, is to support startups and business owners who are tackling the most pressing problems in the region. By 2025, it plans to establish 300 impact-driven tech companies in Africa, using blockchain and artificial intelligence (AI) to give one million young people in the continent jobs. Therefore, Africa’s current situation has provided the right conditions to accelerate the implementation of blockchain technology in terms of financial infrastructure, personal identification, record keeping, and lack of access to individual financial independence.

The widespread adoption of digital payment systems and the spread of mobile technology across the continent have coincided increasingly. One of the key areas in which blockchain can make an immediate difference is financial inclusion, where there are over 450 million unbanked people in Africa. With the help of P2P bitcoin marketplaces like Paxful and Localbitcoins, millions of people may now access a variety of crucial financial services. Africa is a prime location for cutting-edge technologies like Bitcoin because of the rising rates of mobile technology usage and the continent’s expanding number of tech-savvy people. More and more people in Africa are turning to alternative solutions like Bitcoin to address their daily issues due to the instability of the world financial markets, hefty remittance costs, and restricted access to banking.

Impact of Blockchain Technologies in Africa

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