The rising popularity of bitcoin in the world
There are many factors that make the world a hotbed for crypto adoption, even regions that adopted crypto such as South Africa.
There is no doubt that South Africa is one of the most advanced and developed countries in Africa. But we can’t compare it to the US or Canada. They are now adopting digital currency very quickly and have become a hotbed for it. Many experts consider it the next frontier in crypto.
South Africans reportedly recently traded more than $ 2.6 million in a single month. Africa is well literate in technology, as bitcoin is a blockchain-based technology, it has piqued the interest of people on the continent, especially among the young generation. According to Google Trend data, South Africa ranks fourth among the countries in the world where people searched for the keyword bitcoin last year.
Other neighboring countries like Ghana, Kenya, and Nigeria are also too keen on cryptocurrencies. Twitter CEO Jack Dorsey said that he plans to visit Africa to explore cryptocurrency opportunities in the region.
The main reason for driving the adoption of cryptocurrencies and blockchain in Africa is the excitement around these nifty technologies. We can list many properties of cryptocurrencies and bitcoins that make them popular in the world and particularly in South Africa.
In fact, it is very easy to access cryptocurrency exchanges and the peer-to-peer market in South Africa. These platforms are easier and more immediate than opening a bank account in the region. According to bitcoin optimizer, the most famous and popular exchanges in the region are Luno, VALR.
Bitcoin and other cryptocurrencies cross all borders and are decentralized, making them an efficient mode of payment. Besides being a payment method, it is also considered a safe-haven asset for wealth storage.
We can say that investors see cryptocurrency as a precious metal like gold when they want to store value. The versatile characteristics of cryptocurrencies attract investors from all over the world, including South Africa.
Why bitcoin is so attractive to South Africans
It is true that bitcoin holdings are very attractive to people around the world, but there are some specific reasons that make bitcoin more attractive to people in South Africa.
Rand is the currency of South Africa that is considered one of the most traded currencies in the world according to the forex brokers that operate in the country. This currency is very volatile. In March it reached its highest record after the 2008 financial crisis.
The negative oscillation of this fiat currency feared investors many times, resulting in moving most investors towards bitcoin to protect their money against the sharp rise and fall of the local currency.
The volatility of any currency weakens it and loses the confidence of traders and investors in it. The same happened with the rand and increased the scarcity of dollars and made bitcoin a better alternative for payments and investment.
These factors increased the demand for bitcoins and fueled their adoption. Another main reason driving the adoption of bitcoins is political instability in the region and investors are using the cryptocurrency to hedge against political risks.
Favorable money transfer fee
Along with accessibility issues, processing and transferring through banks in these countries is often costly and very time-consuming. You must give your full personal data, such as your name, date of birth, address, and purpose of the money transfer. This complex system makes money transfer very slow, complicated, and expensive.
On the other hand, bitcoin deals are much more inexpensive and faster. You do not need any personal data for withdrawals and other transactions. Despite being a cheaper method, crypto transactions are a more convenient way to transfer value. This makes it a more attractive and attractive alternative to local currencies, which is also the main reason for the increasing adoption.
Initially, the government did not impose any regulation on bitcoin in South Africa. But now the government has put AML (anti-money laundering) regulations in place.
The Reserve Bank of South Africa is allowing the private sector to process digital currency under the supervision of regulatory authorities. The government wants to be careful when approving crypto activities. The main objective of this is to prevent the funneling of money out of the country through crypto transactions.
In the future, internet access and education may unlock the full potential of cryptocurrencies in the world. This will give investors more power and will not have to depend on intermediaries.
Story by Affan Hashmi. Total convert to crypto and blockchain. As a content writer, he researches and writes about various projects in the cryptoverse.