Key takeaways:
- Nigeria was ranked number one out of 155 countries as the country with the highest P2P volume.
- It is also Africa's largest crypto economy, receiving the highest cryptocurrency value between 2022 and 2023.
- However, Africa received the least amount of crypto value globally.
Nigeria had the highest peer-to-peer (P2P) exchange volume, according to the 2023 Geography of Cryptocurrency Report by Chainalysis.
In 2021, Nigeria ranked 18th for P2P exchange volume but went up one place to 17th in 2022.
While it's now the first, sub-Saharan Africa only accounted for 2.3% of the global cryptocurrency transaction volume between July 2022 and June 2023, making sub-Saharan Africa the smallest crypto economy in the world.
Latin America, another emerging market, also accounted for some of the fewest global cryptocurrency transactions — 7.3% — however, Brazil is one of the top 10 countries when it comes to crypto adoption in the world.
Why are the smallest crypto economies leading P2P volumes globally?
The answer is in Chainalysis methodology. It weighs P2P exchange volume against purchasing power parity (PPP) and the number of Internet users.
According to the blockchain data firm, this helps to highlight countries where "more residents are putting a larger share of their overall wealth into P2P cryptocurrency transactions."
Chainalysis does this for all the data sets that make up the crypto adoption rankings.
Without weighing data against PPP per capita and the number of Internet users, the wealthiest countries in the world would dominate the crypto adoption rankings.
North America, for example, accounts for the highest crypto transaction value in the world — 24.4% — with the US alone receiving almost $1.2 trillion in cryptocurrency value.
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However, these figures alone don't tell the true story about crypto adoption.
"Grassroots crypto adoption isn’t about which countries have the highest raw transaction volumes; instead, we want to highlight the countries where average, everyday people are embracing crypto," Chainalysis said.
The truth about grassroots crypto adoption
Highlighting grassroots crypto adoption helps us understand the impact of cryptocurrencies beyond trading.
In the Chainalysis 2022 crypto adoption index, Founder and CEO of Convexity, Adedeji Owonibi attributed the increase in the value of P2P transactions in Nigeria to wealth creation and edging against inflation.
Edging against inflation has been a serious need for many Nigerians as inflation continues to skyrocket.
Inflation in the country is currently at an all-time high of 26.7% since 2005. From a 200% increase — ₦198 to ₦500 — in the price of petrol to a 50% drop — ₦461 to ₦777 — in the value of the naira against a dollar, cryptocurrencies, especially stablecoins, have provided Nigerians with a to preserve their savings.
Nigeria is not the only country using cryptocurrencies to hedge against inflation.
Ghana, which is fourth in the ranking of countries with the largest crypto P2P volumes also has faced the same situation as Nigeria.
As of August 2023, the inflation rate in Ghana was a staggering 40.1%.
Outside Africa, Argentines are also finding solace in cryptocurrencies.
Argentina is facing a currency crisis that has seen the value of the peso decline by 80% against the dollar. The country has been struggling with high inflation, low growth, large fiscal and current account deficits, and a heavy debt burden.
“Crypto is mainstream in Argentina — about 5 million people [out of a total population of 45.8 million] use it," said Alfonso Martel Seward, Head of Compliance & AML at Argentina-based cryptocurrency exchange Lemon Cash.
The people who use crypto and the reason why, paint a picture of crypto adoption levels in the world.
While the raw data shows that emerging markets don't move the needle when it comes to cryptocurrency transaction values, the users and why they use it tell a lot about true crypto use cases and what the evolution of cryptocurrencies could look like.
