With blockchain on its way to becoming a central element in the next digital transformation of the global economy, one region yet to fully tap into the technology’s potential is Africa.

But that has begun to change in the last two years, with blockchain bursting onto the African Fintech (financial technology) scene, as adoption across the continent has accelerated.

“Africa is rapidly building a reputation as the hotspot of the crypto-tech world,” Gideon Greaves, Managing Director at Crypto Valley Venture Capital (CV VC) Africa, told TRT World.

“The current blockchain startup scene is booming!”

The distributed ledger technology of the blockchain creates new possibilities for transparent, decentralised and fraud-proof solutions. Cryptocurrencies, which are built on the blockchain, have drawn the most attention – but aren’t the only avenue for the innovation the blockchain offers.

Today, Africa is the third fastest-growing cryptocurrency market globally, steadily attracting large investments. Between July 2020 and June 2021, crypto adoption in Africa surged by over 1,200 percent.

Adoption rates are high in countries like Kenya, South Africa, Tanzania and Nigeria, where the lack of financial services infrastructure has boosted crypto ownership, alongside being a preferred alternative for storing and transferring assets. In April, the Central African Republic made Bitcoin legal tender, the second country to do so after El Salvador.

In a report published last week by CV VC, titled “The African Blockchain Report 2021,” blockchain startups on the continent have raised $91 million in the first quarter of 2022, a staggering 1,668 percent increase in cash flow compared with Q1 2021’s growth of 149 percent.

Innovation is a necessity

The proliferation of mobile technologies across the continent has dovetailed with the widespread adoption of digital payment systems and increasingly, cryptocurrencies, which grant people in cash-based and informal economies access to alternative economic infrastructures.

In countries like Nigeria, the crypto market is thriving despite a ban (that has effectively done little to discourage citizens and institutions from using and trading crypto), where volatility of the Naira, coupled with high international remittance flows, have made digital currencies a sought-after alternative. Nigeria also became the first African country to launch its own CBDC, the eNaira, last October.