Global peer-to-peer (P2P) Bitcoin marketplace Paxful believes the world has much to learn from Africa about the future of the crypto-economy, and 2020 will be a landmark year for the African crypto and blockchain industry.
The US-based company says it is actively looking to join forces with African-born crypto players as it looks to grow market share on the continent.
“We are very bullish on Africa; we believe the continent has tremendous potential,” Artur Schaback, chief operating officer of Paxful, tells ITWeb via e-mail.
“While many parts of the developed world are fixated on speculative activity in the crypto-economy, people in Africa are teaching us about the true use cases of Bitcoin and the opportunity it presents for greater financial inclusion of the underbanked and unbanked.”
Although Schaback would not elaborate on how much the company is looking to invest in Africa, he says the move is intended to improve the firm’s platform, explore possible business partnerships, and drive Bitcoin education and entrepreneurship.
With millions of users globally and Africa being the fastest-growing region, Paxful says it processed almost $1.6 billion (R23 billion) in trade volume globally in 2019; the result of a steady increase of 25% trade volume growth year-on-year on the platform since its inception in 2015.
Increased trading volumes
Paxful currently hosts over three million wallets, 45% of which are from Africa.
The company’s leadership intends to spend a lot more time in Africa over the next few years. The aim is to continue to learn from its customers and provide them with the best possible peer-to-peer finance marketplace.
It says with Nigeria, Ghana, South Africa and Kenya already among the leading markets, the company expects to extend its customer base in many more markets where it is seeing a steady increase in trading volumes on the continent, like Zambia and Uganda.
African trading volume on the Paxful platform grew by over 57% in 2019 and the company hopes to accelerate trading volumes further this year.
According to Schaback, South Africa remains one of the top markets for Paxful on the African continent. “For example, we reported a 400% increase in trades from the country from 2018 to 2019. Johannesburg, Pretoria and Cape Town are the three cities within the country that lead with the number of users.”
He notes bank transfers continue to be the preferred method of choice for South Africans purchasing Bitcoin on the platform.
With many unbanked people residing in African countries, Schaback points out that P2P finance provides Africans with an opportunity for financial inclusion through alternative, convenient and cost-effective access to the global financial system.
In addition, he says, when compared to traditional currency markets that involve various intermediaries like banks, there is a substantially lower barrier to entry into the Bitcoin market.
“Africa’s youth, in particular, are making use of peer-to-peer finance to satisfy both personal finance needs and entrepreneurial ventures.”
New asset class
However, he says education is always the biggest concern. “Bitcoin is still a new asset class and many different stakeholders – from consumers to regulators – have questions about it. One of our key focus areas is to help the public better understand the value of peer-to-peer finance, as well as sharing practical insights as to the true use cases of Bitcoin beyond grey markets and speculation.”
Schaback adds that calls for the regulation of crypto-currencies are growing across the globe, with more governments expected to formulate enabling regulations, and rightfully so, as we live in the age of compliance.
“If we want to achieve global adoption and secure the evolution of blockchain technology and crypto, a measure of regulation makes sense to ensure the growing Bitcoin economy is safe and effective. We are working with authorities around the world to help them better understand the peer-to-peer finance ecosystem.”
“Africa has tremendous potential and partnerships are essential in this pivotal time within the crypto-currency industry,” says Ray Youssef, CEO and co-founder of Paxful.
“We are actively looking to join forces with African-born crypto players who share our passion and vision for the global crypto-economy and to join our efforts in bringing Bitcoin to the unbanked masses across the continent to fundamentally help alleviate poverty, boost economies and create jobs,” he concludes.
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