Leading cryptocurrency exchanges are bullish about Africa’s growth prospects as evidenced by their ongoing forays into the continent. During the month of August, Kucoin crypto exchange announced the addition of Nigeria’s naira currency as a payment option on its peer-to-peer platform. Similarly, Binance added Kenya’s popular mobile money service Mpesa to its peer-to-peer platform in the past week, some five months after adding the naira option.
Paxful, which has had success on the continent, already supports multiple payment options. Local.Bitcoin.com, the bitcoin cash peer-to-peer exchange which uses a blind escrow, similarly supports multiple payment options.
In the meantime, Kucoin and Binance are reportedly planning to add more African currency payment options as they look to expand their foothold on the continent. From the few examples mentioned above, it appears that peer-to-peer crypto trading is now the favored approach by major exchanges seeking to tap into the African market.
On the surface, many countries on the continent appear to be primed for mass crypto adoption but that has not happened because there are no fiat on-ramps. Ideally, such on-ramps are necessary as they help potential users of digital assets to switch from fiat to crypto seamlessly. The absence of such on-ramps has had the effect of dissuading interested users from buying. This ultimately slows the adoption of digital assets as well as the growth of the space.
Some observers believe peer-to-peer crypto trading provides the breakthrough crypto exchange platforms have been searching for. News.Bitcoin.com spoke to one observer who shares this view, Elisha Owusu Akyaw, an influencer and cryptocurrency researcher at Blocknewsafrica.
Akyaw, who keeps track of weekly peer-to-peer trading volume trends, says African cryptocurrency users have always wanted fiat on-ramps.
Commenting on reports that leading cryptocurrency exchanges, Kucoin and Binance, added local currency to payment options, Akyaw said:
It shows how much there is a demand for fiat-on ramps from African users, and platforms are (now) willing to provide that.
Also weighing in is Roselyne Wanjiru, Kenyan economist and Director at Pesabase, who says the addition of Mpesa as a payment option truly opens up liquidity options for traders.
She adds: “One of the key challenges of crypto trading in Africa is that of access to quick and easy ways to deposit and withdraw cash in a bid to exchange it for cryptocurrencies.”
Wanjiru asserts that the addition of Kenya’s popular mobile money as a payment option by the major exchange means more people will have the opportunity to participate in digital asset trading.
Meanwhile, Akyaw also believes that “peer-to-peer trading will continue to be the go-to option for users and platforms due to the uncertain regulatory environment (that prevails in many countries).”
Regulatory uncertainty has been central in constraining the growth of the crypto market on the African continent. Some countries have purportedly banned cryptocurrency trading while others have decreed that financial institutions cannot interface with crypto platforms. It appears, however, that this is not a major concern for peer-to-peer trading platforms, especially when looking at the growing number of such platforms.
Still, Akyaw weighs in with another possible reason why more peer-to-peer platforms will be good for Africa.
“Recent additions to the P2P ecosystem in Africa have the potential to improve crypto knowledge levels. For a continent plagued by crypto scams, education will be vital for growth and adoption. Based on precedence, most of the top P2P platforms contribute to education efforts which in turn attracts more people to the crypto space,” said Akyaw.
Paxful is one of the peer-to-peer platforms that are actively involved in cryptocurrency and blockchain education on the continent.
Finally, Akyaw believes the growing competition between exchange platforms will also benefit traders in the form of much wider payment options and lower fee structures. This, in turn, will boost the adoption momentum.
What do you think of the leading P2P exchanges’ pivot to Africa? Share your thoughts in the comments section below.
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