Kenya and Ghana have now surpassed South Africa in peer-to-peer (P2P) Bitcoin trading volume across Africa. For the first quarter of 2021, data from UsefulTulips show that South Africa has dropped to fourth by transaction volume as Nigeria continues to lead in P2P Bitcoin trading activity on the continent.
Between January and March (Q1 2021), Nigeria posted a P2P Bitcoin trading value worth $99.1 million, $61 million more than Kenya’s $38.4 million. Ghana and South Africa complete the top 4 with $27.4 million and $25.8 million respectively.
In 2020, South Africa only trailed Nigeria in Bitcoin trading volume. Nigeria processed a record high $309.6 million during the year, dwarfing South Africa’s $98.4 million and Kenya’s $92.4 million. However, both Kenya and Ghana have eclipsed South Africa after Q1 2021.
Kenya and Ghana Get Govt Crypto Backing
The significant rise in Bitcoin P2P trading volumes in both Ghana and Kenya are likely due to receiving what could pass as a kind of government endorsement.
Ghana’s Central Bank launched a regulatory sandbox that prioritised blockchain-based companies including cryptocurrency startups while the Central Bank of Kenya reportedly proposed switching to Bitcoin as a reserve currency. These have, perhaps, driven up investor confidence among Bitcoin traders.
It is in stark contrast to what has happened with Nigeria’s financial regulator, with the Central Bank (CBN) banning banks from processing all crypto-related transactions.
However, Nigeria is seeing much higher Bitcoin P2P activity as traders continue to bypass CBN restrictions. For context, the country’s monthly P2P volume is currently valued at $33.1 million, 28% higher than the $25.8 million per month in 2020.
Apart from the likes of Nigeria and other countries in the Top 4, Tanzania and Cameroon are two other African countries steadily growing in P2P Bitcoin trading activity.
Regulations Curtail Bitcoin Trading in SA
South Africa’s crypto space has so far taken a hit in 2021. Trading activity has nosedived due to draconian regulations enforced by authorities following a $740 million bitcoin scam coordinated by the now liquidated Mirror Trading International (MTI).
The multimillion-dollar fraud was the biggest crypto scam of 2020 in the world, according to Chainalysis. Crypto dealings have come under increased scrutiny, with tougher regulations including mandatory licences and taxes triggering investor exits. Bitcoin trading in South Africa has effectively lost its autonomy and this has reduced its market appeal to investors.
Recall that in a previous post, Technext had projected Bitcoin trading volumes in South Africa to fall even further going forward.
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
