(Bitmama CEO Ruth Iselema speaking in Nodo News interview in Lagos / Nodo News)

Africa’s crypto market continues to gather momentum this year, with Bitcoin (BTC), Ethereum (ETH), and the US dollar-pegged stablecoin USDT emerging as the top choices. This is despite the collapse of FTX and its Terra stablecoin last year, which contracted trade volumes.

As per the 2022 Global Crypto Adoption Index by Chainalysis, African nations Nigeria, South Africa, and Kenya, are among top 20 countries adopting cryptocurrencies at the fastest pace in the world.

Another report published by Chainalysis last September revealed that the number of small retail transactions under $1000 has actually increased in Sub-Saharan Africa since the start of the bear market.

African consumers are increasingly using the digital assets to send or receive money from abroad, particularly in the expensive remittance corridor between Africa and Western markets. Cryptocurrency is seen as a cheaper and faster option than traditional channels like Western Union.

Bitmama Is Leading Nigeria’s Crypto Wave

(Bitmama’s executives in Lagos, Nigeria / Nodo News)

Lagos-based Bitmama is one of the crypto-trading platforms gaining popularity among the young citizens in Nigeria – Africa’s biggest crypto market. The platform which was founded in 2019, has about 100,000 users, and many of them are in their 20’s and 30’s, according to its CEO Ruth Iselema.

“Growing needs to hedge against the fluctuation of local fiat currencies such as Naira are the major driving force behind the adoption of cryptocurrency,” she told Nodo News. Bitmama joins the likes of Luno and Quidax as a popular choice for trading in Nigeria.

According to an interview with TechCrunch, last year, Bitmama was formed to make it easier for Africans to access, buy and sell cryptocurrencies. Iselema’s interest in cryptocurrency elevated a WhatsApp chat group into a fully fledged crypto trading platform. To make their service unique, Bitmama introduced virtual cards to facilitate trade beyond cryptocurrencies.

However, the knowledge about Web3 products and services is still low, Iselema alluded. In a bid to envelope more users, the Bitmama launched Changera, a remittance platform.

According to Iselema, simple remittance services abstract away the complexities of cryptocurrency trading to make it more market-friendly to non-crypto users.

“We tell users, ‘just send your money’ wherever they want to send it to,” Iselema says. Bitmama aims to have 1 million users on its platform by the end of 2023. It targets users in Nigeria, Kenya and South Africa.

Bitcoin Leveled Financial Playing Field

Iselema says that bitcoin is the first popular pick for users followed by Ethereum and USDT respectively. This reflects the nature of adoption of Bitcoin in Africa.

Due to its decentralized nature, Bitcoin allows users to bypass traditional banking services and access peer-to-peer lending services. This, she says, is helping level the economic playing field and expand finance options to underserved customer markets.

Additionally, Bitcoin is a much faster and cheaper way of transferring money abroad. This is especially useful for people working abroad who need to send money home. Bitcoin is also becoming increasingly popular in Africa due to major fiat currency fluctuations and the development of financial infrastructure.

Meanwhile, Ethereum, the second-largest cryptocurrency by market capitalization, has been gaining traction in Africa for various reasons, including low transaction fees.

One of the key factors is its smart contract functionality, which allows for the creation of decentralized applications (dApps) and the ability to automate certain tasks on the blockchain. This feature has attracted many entrepreneurs and businesses looking to create new opportunities and disrupt traditional industries in Africa.

Why Ethereum Is Gaining Users In Africa

Ethereum is also the platform of choice for many Initial Coin Offerings (ICOs), allowing developers to raise money to fund their projects, while investors can benefit from the potential returns.

Ethereum’s built-in programming language, Solidity, also allows developers to create their own smart contract and dApps, which is an attractive option for many developers and entrepreneurs in Africa who want to build their own decentralized solutions.

This is particularly important in Africa, where access to traditional banking and financial services is limited, and people are looking for more efficient and decentralized ways to transact.

“Ethereum is gaining popularity as a utility coin, a consensus level coin, and a supercomputer of the future, attracting a diverse set of stakeholders such as developers and speculators,” said Hussein Hashish, founder of Web3 enabler Metaversive.

USDT, the stablecoin issued by Tether Holdings, is also growing in popularity in Africa as a form of payment and remittance.

USDT is increasingly being used for cross-border remittances, as capital controls make it more difficult to transfer money between countries. This has been especially beneficial in Nigeria, where the Central Bank has implemented several restrictions that make it challenging for individuals and businesses to access dollars for international payments.

In order to get around this, many Nigerians have turned to stablecoins like USDT, which they can purchase with naira and then exchange for Canadian dollars.

BitMama’s perspective on USDT is synonymous to remittance trading. “One typical use case is that a business owner makes a cross-border payment by USDT to oversees suppliers,” says Iselema.

In addition to being a cheaper and faster way to make payments, stablecoins like USDT are also being used to protect the value of devaluing local currencies. In Kenya, Uganda, Zimbabwe, and Nigeria, private savings clubs and amateur investors are using stablecoins as a way to hedge against value loss.

Edited by Faustine Ngila