The Sub-Saharan African nation is afflicted with discriminations and contradictions, where the underprivileged people could change their fate with cryptocurrency adoption. South Africa is not among the poorest countries in the world, but it is the most unequal one, with more than 11 million unbanked people.

According to the World Bank, the state ranks first in terms of digital currency possession among internet users. This might indicate the adoption of cryptocurrency on a large scale in the country. There are various reasons why crypto usage in South Africa tops multiple lists, but inflation and poverty appear to be the leading factors, according to most experts.

Crypto writer and Kryptomoney Founder Rohit Kukreja said in an article, “With economic crises knocking at their doors, countries like Iran, Turkey, Venezuela, Argentina and Zimbabwe turn towards cryptocurrencies to keep it all together.”

Bitcoin’s official site also wrote in an article that digital currency had expanded globally. A poll conducted by Statista revealed that people in financially troubled countries tend to lean on crypto assets more readily than those in developed nations.

Emerging markets are more interested in cryptocurrency

According to the recent survey conducted by cryptocurrency exchange platform Luno across seven large markets, including South Africa, attitudes towards the financial system have significantly changed. Developing markets are now leaning towards crypto assets. People in emerging markets tend to look for new and promising ways of making money. The results if Luno’s Future of Money survey revealed that participants of South Africa are savvier with their money than those in European markets.

At present, payment with fiat currency or transaction across borders is costly and time-consuming due to the financial system.

Also, every month, a high volume of remittance flows from South Africa to other countries. The complexity of moving money compels people to embark on informal and often illegal methods of transactions. Reitz pointed this out and emphasized the need for a more liberal and speedy method of payment. Cryptocurrency seems to be the right fit in this situation.

Cryptocurrency will see another big potential in Africa as the African Free Continental Trade Agreement (AfCTA) has been ratified in July by 22 member states. The agreement is intended to create the world’s largest free-trade zone by allowing movement of goods and human resources among the member states. It will not be the replacement of existing regional free-trade agreements but will bolster the economies of the continent.

The South African rand has been extremely volatile recently, with almost 30% fall in price since 2014. Traders have sufficient reasons to become nervous and tend to consider alternative businesses in this situation. Cryptocurrencies are typically volatile during initial stages of adoptions, whereas fiat currencies are meant to provide stability. The South African Reserve Bank has already called financial experts to develop a regulatory framework for crypto assets. Seemingly the regulations will emphasize institutions rather than cryptocurrency alone.