WELCOME TO THE October EDITION OF ADDLESHAW GODDARD'S AFRICA BUSINESS GROUP NEWSLETTER
Africa has seen a huge increase in the use of digital currencies, with Kenya, South Africa and Nigeria all currently in the top 10 in the world for adoption. In June, the Central African Republic became only the second country in the world (behind El Salvador) to adopt Bitcoin as legal tender. Why? Well, in addition to economic stagnation, debt crises and political instability which have resulted in weak fiat currencies ravaged by inflation, African economies have historically been beset by a lack of financial infrastructure and access to individual financial independence. Cryptocurrencies seek to address all of these issues and, as a consequence, have gained increasing acceptance among a large proportion of the low income population that was previously financially marginalised.
On a broader (business) level, it is widely thought that Africa will lead the world in capitalising on blockchain technology before the end of the decade. The adoption of blockchain across the continent has precipitated a huge swell in the African fintech scene. The distributed ledger technology behind blockchain has created new possibilities for transparent, decentralised and fraud-proof solutions – all of which had previously provided barriers to entry and success in large parts of the continent.
There are, as ever, significant hurdles to overcome before digital assets and blockchain technology can be fully embraced and embedded across Africa, chief among them being connectivity and regulation, but these are being addressed and provide significant opportunities for African businesses.
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