Kenya has been ranked higher than Nigeria to be the top country in Africa for cryptocurrency adoption, according to data from Chainalysis.
In the 2021 Global Crypto Adoption Index, Kenya ranked 5th globally with a 0.28 score on the global index, just above Nigeria which had 0.26 in sixth place.
The index ranked 154 countries under three metrics including the on-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita; on-chain retail value transferred, weighted by PPP per capita; and peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and the number of internet users.
Kenya emerged the highest in the first two metrics, the on-chain cryptocurrency value received, weighted by purchasing power parity (PPP) per capita, and on-chain retail value transferred, weighted by PPP per capita.
“Several countries in emerging markets, including Kenya, Nigeria, Vietnam, and Venezuela rank high on our index in large part because they have huge transaction volumes on peer-to-peer (P2P) platforms when adjusted for PPP per capita and internet-using population,” the Chainalysis report read. “Our interviews with experts in these countries revealed that many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don’t have access to centralised exchanges.”
Total global crypto adoption at the end of the second quarter (Q2) of 2020 stood at 2.5 based on a summed-up country index score. At the end of Q2 2021, that total score stands at 24, suggesting that global adoption has grown by over 2300 percent since the third quarter of 2019 and over 881 percent in the last year.
The research suggests that the reasons for this increased adoption differ from country to country – in emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions. Adoption in North America, Western Europe, and Eastern Asia has been driven mainly by institutional investments over the last year.