Bitcoin (BTC/USD) is trading at 27,902, up 0.85% over the past 24 hours. The adoption of bitcoin in Africa amid Africa’s broken financial system could boost the demand for the leading cryptocurrency.
The African continent has long battled with a poor banking sector, with massive fees, prolonged waits, and limited accessibility to the standard. However, there is optimism that with the emergence of Bitcoin and other cryptocurrencies, a new era of financial inclusion is a solution.
Governments find it difficult to embrace this innovative payment method. Furthermore, many people assume that because of its complexity, it would only be feasible for tech-savvy people. However, Bitcoin continues to be the most revolutionary and innovative alternative to the current financial system in Africa.
The world’s leading cryptocurrency, Bitcoin, has recently grown in acceptance in Africa, where many see it as a competitive alternative to traditional financial institutions. It is the result of Bitcoin’s decentralized nature.
Kenya to give up US Dollar
On March 22, the president of Kenya, William Ruto, revealed a proposal for dealing with the dollar crisis that calls for Kenya to buy oil in shillings instead of dollars. Ruto criticized oil cartels for stockpiling dollars in reaction to the currency crisis, prompting Kenya to face fuel scarcity. He said that his administration would now buy oil in Kenyan shillings.
His government took action to solve the US currency shortage in response. They include agreements with Saudi Arabia and UAE companies to provide diesel, petrol, and jet fuel on credit. As well as to allow Kenyans to purchase petrol on a six-month credit schedule.
Moreover, the banking sector in Africa is worth $86 billion. However, with the help of Bitcoin, the system may achieve far more. The use of cryptocurrencies would assist in integrating unbanked Africans into the financial system.
Africa’s Digital Alternative could help Bitcoin
Africa has experienced a significant expansion of mobile money, a digital wallet connected to a phone number. However, Bitcoin may do away with intermediaries and allow for direct digital payments between people without the need for credit or various fees.
On top of the primary chain of Bitcoin, there is a second layer called the Lightning Network. Bitcoin is now more practical for everyday usage since it facilitates speedier payments and lowers transaction fees.
Companies are considering the Lightning Network, including Yellow Card, Africa’s top centralized cryptocurrency exchange. The objective is to further down transaction costs and enable international payments between Bitcoin wallets.
Moreover, foreign media recently stated that while the Lightning Network transaction technology substantially reduces Bitcoin transfer costs, posing a challenge to the continent’s $86 billion banking sector, more and more African start-ups are adopting similar technologies.
According to CNBC, the Global Transfer function, which enables US users to send money to anybody in Nigeria, Ghana, and Kenya easily, was recently introduced by the Nigerian cryptocurrency platform Bitnob and the Lightning Network payment service provider Strike. End users will deal in their native currencies, while Bitnob uses bitcoin as an international transfer mechanism and transforms it into local money.
The adoption of Bitcoin as a common currency in Africa involves several challenges. However, a new era of financial independence for millions of Africans could show strength in BTC/USD. The contributing factors would be cutting-edge technologies like the Lightning Network, partnerships between significant industry players, and initiatives to educate and empower the population.