Key Takeaways:
Nigeria ranked number one out of 155 countries as the country with the highest P2P volume. It is also Africa’s largest crypto economy, receiving the highest cryptocurrency value between 2022 and 2023. However, Africa received the least amount of cryptocurrency globally.
Nigeria had the highest peer-to-peer (P2P) exchange volume, according to the 2023 Geography of Cryptocurrency Report by Chainalysis.
In 2021, Nigeria was 18th for P2P exchange volume, but moved up one place to 17th in 2022.
Although now the first, sub-Saharan Africa accounted for only 2.3% of global cryptocurrency transaction volume between July 2022 and June 2023, making sub-Saharan Africa the smallest crypto-economy in the world.
Latin America, another emerging market, also accounted for some of the least global cryptocurrency transactions – 7.3% – however, Brazil is one of the top 10 countries in terms of crypto adoption in the world.
Why are the smallest crypto-economies leading worldwide P2P volumes?
The answer is in Chainalysis methodology. It weighs P2P exchange volume against purchasing power parity (PPP) and the number of Internet users.
According to the blockchain data firm, this helps highlight countries where “more residents are putting a greater proportion of their overall wealth into P2P cryptocurrency transactions.”
Chainalysis does this for all the datasets that make up the crypto adoption rankings.
Without weighing data against PPP per capita and the number of internet users, the richest countries in the world would dominate the crypto adoption rankings.
North America, for example, accounts for the highest crypto transaction value in the world – 24.4% – with the US alone receiving nearly $1.2 trillion in cryptocurrency value.
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However, these numbers alone do not tell the true story about crypto adoption.
“Grassroot crypto adoption is not about which countries have the highest raw transaction volumes; Instead, we want to highlight the countries where average, everyday people are embracing crypto,” Chainalysis said.
The truth about grassroots crypto adoption
Highlighting grassroots crypto adoption helps us understand the impact of cryptocurrencies beyond commerce.
In the Chainalysis 2022 crypto adoption index, founder and CEO of Convexity, Adedeji Owonibi attributed the increase in the value of P2P transactions in Nigeria to wealth creation and inflation.
Fighting inflation has been a dire need for many Nigerians as inflation continues to soar.
Inflation in the country is currently at a record high of 26.7% since 2005. From a 200% increase — ₦198 to ₦500 — in the price of petrol to a 50% drop — ₦461 to ₦777 — in the value of the naira against a dollar, cryptocurrencies, especially stablecoins, have provided Nigerians with a to preserve their savings.
Nigeria is not the only country using cryptocurrencies to hedge against inflation.
Ghana, which is fourth in the ranking of countries with the largest crypto P2P volumes, also faced the same situation as Nigeria.
As of August 2023, the inflation rate in Ghana was a staggering 40.1%.
Outside of Africa, Argentinians are also finding solace in cryptocurrencies.
Argentina is facing a currency crisis that has caused the value of the peso to drop by 80% against the dollar. The country is struggling with high inflation, low growth, large fiscal and current account deficits and a heavy debt burden.
“Crypto is mainstream in Argentina – about 5 million people [out of a total population of 45.8 million] use it,” said Alfonso Martel Seward, head of compliance and AML at Argentina-based cryptocurrency exchange Lemon Cash.
The people using crypto and the reason why paint a picture of crypto adoption levels in the world.
While the raw data shows that emerging markets are not moving the needle when it comes to cryptocurrency transaction values, the users and why they use them tell a lot about real crypto use cases and what the evolution of cryptocurrencies might look like.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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