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A recent report suggests that the lack of traditional financial infrastructure makes Africa a place where cryptocurrency adoption is likely.



The report — shared with Cointelegraph by a Luno representative on May 27 — sheds light on Africa’s financial infrastructure and the role that cryptocurrencies play in it.

The author of the research, which was jointly conducted by market analysis firm Arcane Research and crypto exchange, Luno, wrote that the financial landscape seen on the continent plays a role in forming appetite for crypto in Africa:

“Although it is a diverse region, African nations share some key similarities and trends. Economic problems, from high inflation rates and volatile currencies to financial issues such as capital controls and a lack of banking infrastructure, create a fertile ground for an alternative to germinate.”

Per the report, cryptocurrencies such as Bitcoin (BTC) can potentially solve all the aforementioned challenges. One use case for crypto assets in Africa is remittance, which currently forms an important source of income for local families.

According to a World Bank report published in April, expats sent around $48 billion back to families in Sub-Saharan Africa in 2019 alone. Still, using traditional remittance services to send money to the region allegedly results in an average fee of 9% for a mere $200 remittance.

According to the Luno-Arcane report, intra-African payments often have to deal with high fees and low speeds. According to World Bank data, in Sub-Saharan Africa there are over 56% less commercial bank branches per 100,000 adults than the world average. This shows that traditional financial infrastructure is not just less efficient, but also less accessible in the region.

Bitcoin adoption in Africa has already started

Bitcoin-enabled services attempting to tackle those issues already exist in Africa. One example of such a service given by the report’s author is Bitpesa; a Kenya-based firm that enables its users to leverage Bitcoin for international payments and remittances with lower fees than traditional services.

Bitpesa was initially only meant to be an exchange platform allowing Kenyan citizens to send money to mobile money wallets, without requiring bank accounts. Later the service expanded to other African countries and now has representatives in London and Luxembourg, among others.

In late January 2019, the World Economic Forum appointed the CEO and founder of BitPesa, Elizabeth Rossiello, as one of two co-chairs of the Global Blockchain Council. This shows how the innovation brought on by this Bitcoin-enabled service was recognized worldwide, also outside Africa.

The report also mentions Paxful, a Delaware-based peer-to-peer, or P2P, crypto exchange competing with Localbitcoins, as another player in the African crypto ecosystem. A recent report showed that surging African demand drove P2P Bitcoin trading volume on Localbitcoins and Paxful higher than what it was at the peak of the 2017 bull run.

Marcus Swanepoel, the CEO of crypto exchange Luno, told Cointelegraph that he believes the adoption of cryptocurrencies in the region will continue to increase. He explained:

“Crypto use in Africa will continue to rise, and it is only a matter of time until digital currencies will become ubiquitous. […] Given how readily they’ve adopted crypto, I would expect countries in Africa to be the first to make the full transition from their traditional financial systems towards crypto.”

Swanepoel claims that Luno was the first such company to operate in Africa and currently has African offices based in Lagos, Cape Town and Johannesburg. He revealed that those “three offices have so far processed approximately $4.5 million per day on average in 2020.“ He also shed some light on his firm’s plans to expand in the continent:

  1. “Africa is one of, if not the biggest early adopter of cryptocurrencies, and a very important market to us, being home to approximately three fourths of our customer base. We’ve seen high rates of adoption in the likes of Kenya and Ghana specifically, but we’re always looking to expand our reach and welcome more customers across the continent. A priority for us has always been education, not just buying and selling cryptocurrencies, and that’s something we’ll continue to do, especially in the territories in Africa that we know have been ravaged by broken financial systems.”


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