South Africa is on the verge of becoming one of the notable adopters of Bitcoin. The adoption of Bitcoin in the last five years deemed South Africa to be quite an appropriate spot for Bitcoin trading, mining, as well as making payment using Bitcoin. There are numerous reports and findings scattered across the internet pointing out that people in the country are interested in the presiding and innovative cryptocurrency in the world and in the Bitcoin Future.
There is a surprising fact which unveiled that there is a specific population in South Africa who are using Bitcoin to buy things, they are the millennials specifically people born from 1981 to 1996. The adoption of Bitcoin in South Africa and its growth is unprecedented. Reportedly, the adoption of Bitcoin and other cryptocurrencies has aided the country in stabilizing the economic status.
Given that the improvement in uplifting the economy has been gradual for five years, the adoption has come a long way since 2014. A published report from African Development Bank Group which is titled “African Economic Outlook 2020: Developing Africa’s Workforce for the Future” said that Africa’s economic growth saw unexpected stability since early 2019. Before the Pandemic fiasco made people confined to their homes, the study anticipated a 3.9 percent increase in the country’s economic stability. In addition to this, in 2021, the economic growth of South Africa is expected to be 4.1 percent. The finance officials of the country are curating ideas and formulating them to provide sustainable stability and improve the country’s financial management.
Economy and Finance in South Africa before Bitcoin Adoption
Back in 2017, Africa was regarded as an unbanked continent because 60 percent of the population did not have access to banking. Even the commercial banks faced a tough time meeting the demands of the country’s unbanked population. In addition to this, factors such as political instability, low-wage income, and sheer lack of financial knowledge.
Soon all regions of Africa came up with alternatives to make the lives of people easier. The first choice for alternatives was credit unions and mobile payments as most of the population felt comfortable using fiat currency to make transactions. The credit unions were local, and these financial cooperatives functioned only to help people who need help in finance. They provided credit at minimal charges.
However, countries like South Africa responded to this scenario differently; they began to adopt a digital payment system for seamless, and uninterrupted financial trading. The adoption of new-age digital currency, Bitcoin changed the entire stance of financial instability as people had knowledge about finance and they understood technology. Given that the region didn’t have many commercial banks, digital payment with Bitcoin made people comfortable with its technical aspect as the adoption of cryptocurrency like Bitcoin pulled the country from turmoil.
As of now, digital trading is very much popular among the masses; however, there are some people who like to have transactions using conventional fiat currency.
Bitcoin and Blockchain technology reshaped South Africa’s Finance Industry
Bitcoin is the leading cryptocurrency in terms of market capitalization and price. The ground-breaking features of Bitcoin gave rise to nation-wide adoption in South Africa. One of the most unique aspects of Bitcoin is the underlying technology, blockchain, a distributed and open ledger that records transactions taking place between two individuals. Blockchain stores the transaction data in blocks using cryptography.
According to Google Trends’ data, In the last five years, Bitcoin has been the most searched across African countries such as South Africa, Nigeria, & Ghana. On the other hand, a report claims that the 30-year-old or below age group population in South Africa comprises 70 percent of total Bitcoin users.
Bitcoin and its underlying tech, blockchain became a new paradigm of making monetary transactions with the use of technology in South Africa. Many people of South Africa can now engage in borderless transactions as they can access distinctive markets from different corners of the earth. Before the adoption of Bitcoin, South African people faced adversity due to limitations in the financial system as cross-border transactions in the country before Bitcoin was expensive, unreliable, and time-consuming. Additionally, cross border payments also comprise of massive complexity; hence it is important to adopt Bitcoin to reduce the cost as well as the complexity.
This led to the massive adoption of Bitcoin and blockchain, given that there are regulations on cryptocurrency. The adoption is compelling the fiscal authorities as well as the regulators to see Bitcoin and cryptocurrency trading as an indispensable part of commerce. As of today, South Africa is one of the leading Peer-to-Peer marketplaces in terms of bitcoin trading in the entire world. Since December 2019, there has been an increase in the number of new users on Bitcoin and accepted cryptocurrency exchanges. By the looks of it, this suggests that new users are adopting Bitcoin and Bitcoin wallets in the course of time.
During the initial Luno research, Marius Reitz, general manager of Luno said that the developing markets will lead as the early adopters of Bitcoin and other cryptocurrencies. The reason is quite simple, masses residing in the emerging markets have a good understanding of finance and technology. Moreover, this is why people in South Africa understand trading with Bitcoin better than people in European countries. Since January 2020, the trading volume also witnessed a positive response concerning Rand, South Africa’s local fiat currency.
Bitcoin and South Africa are in for the long run
South Africa is gradually turning into a place where Bitcoin trading and payment system can be carried out in the long run. The CEO of Twitter, Jack Dorsey, a renowned supporter of Bitcoin said that he is quite confident in Bitcoin becoming a stable means of financial and trading transaction.
In the forthcoming months or years, there will be several other changes that South Africa and Bitcoin are going to bear as it is one of the fastest-growing economies in the world. The growth of Bitcoin adoption is proof that cryptocurrency is the future of finance and trade which must get global recognition.