African merchants face significant challenges in adopting cryptocurrency despite the region’s potential for digital financial solutions. Key barriers include:
- Limited Knowledge: Over half of potential users lack understanding of cryptocurrency basics and blockchain technology.
- Regulatory Uncertainty: Inconsistent or restrictive policies across countries create confusion and discourage adoption.
- Infrastructure Gaps: Poor internet access, unreliable electricity, and limited access to compatible devices hinder usage.
- Cost and Technical Issues: High price volatility, transaction fees, and low digital literacy make adoption risky and complex.
While countries like Nigeria and South Africa are leading adoption efforts, education, partnerships, and clearer regulations are needed to help merchants overcome these obstacles and benefit from cryptocurrency for cross-border payments and inflation protection.
The Key to Crypto Adoption in Africa – Bitcoinke Founder Explains | BlockTalk Africa Ep. 10
Main Barriers Preventing African Merchants from Using Cryptocurrency
Research highlights four key challenges that discourage African merchants from embracing cryptocurrency. These challenges – spanning from a lack of education to infrastructure gaps – collectively slow down its adoption across the continent.
Limited Knowledge About Cryptocurrency
A major hurdle for African merchants is the lack of understanding about cryptocurrency and how it operates. Studies reveal that 56% of potential users believe having more educational resources would make them feel more confident about purchasing digital assets.
Beyond the basics, many merchants lack deeper insights into blockchain technology. Since blockchain is still relatively new, only a small number of individuals have the practical skills to implement it effectively. Without accessible training programs, merchants often feel uncertain about integrating cryptocurrency into their businesses. This educational gap is further exacerbated by unclear government regulations, making the adoption process even more daunting.
Unclear Government Rules
Regulatory uncertainty is another significant barrier. Across Africa, the lack of a unified approach to cryptocurrency regulation creates confusion for merchants. In some countries, crypto transactions are outright banned or heavily restricted, while others are still in the process of developing clear guidelines.
Currently, only about a quarter of countries in sub-Saharan Africa have formal cryptocurrency regulations, and of these, two-thirds have imposed restrictions. Some nations, however, are making progress. Kenya introduced its Virtual Asset Service Providers (VASP) Bill, and Nigeria recently classified cryptocurrencies as securities under its capital market laws, requiring businesses to register with the SEC and follow its rules. While these steps provide some clarity, the constantly shifting regulatory environment continues to create uncertainty for merchants.
Poor Technology Infrastructure
Basic technological limitations also play a major role in discouraging cryptocurrency adoption. Many merchants face challenges such as limited internet access, unreliable electricity, and a lack of compatible devices. These issues are especially severe in rural areas and informal markets.
For example, inconsistent internet connectivity can make it difficult to access cryptocurrency platforms or process digital payments. Power outages can interrupt transactions at critical moments. Additionally, many merchants rely on basic mobile phones that cannot support cryptocurrency wallets. Even when smartphones are available, merchants often lack the technical skills needed to securely set up and maintain digital wallets. These infrastructure challenges are particularly striking given that 60% of Africa’s population is under 25 – a group showing growing interest in crypto payments.
Cost and Technical Problems
Financial concerns and technical difficulties also deter merchants from adopting cryptocurrency. Transaction fees and price volatility are two major financial obstacles. While some blockchain networks charge very low transaction fees – often less than 1% – merchants remain wary of the unpredictable costs tied to cryptocurrency. For comparison, traditional remittance services charge an average fee of 7.39% for a $200 transfer to Africa.
Price volatility presents an even bigger challenge. Many merchants operate on thin profit margins and cannot afford to absorb losses caused by sudden price swings. On top of this, low digital literacy and limited technical expertise make it difficult for merchants to manage cryptocurrency wallets, understand private keys, or troubleshoot issues. For those already dealing with the complexities of running a business, navigating the technical requirements of securing digital funds – like setting up trusted wallets and enabling two-factor authentication – can feel overwhelming.
Liquidity issues add yet another layer of difficulty. Regulatory restrictions often limit access to centralized exchanges, forcing businesses to rely on peer-to-peer platforms. While Africa has the highest number of peer-to-peer crypto users globally, these platforms often suffer from low liquidity and inconsistent pricing. Moreover, using peer-to-peer systems typically requires technical know-how that many merchants lack.
How Awareness Levels Affect Merchant Cryptocurrency Use
Merchant understanding plays a vital role in the adoption of cryptocurrency. Research highlights that businesses with a clear grasp of digital currencies are much more likely to integrate them into their operations. On the flip side, those lacking awareness often hesitate to explore crypto payment systems.
Link Between Merchant Education and Cryptocurrency Use
Merchant education is a key factor in overcoming barriers to cryptocurrency adoption. Studies based on the technology acceptance model indicate that awareness of cryptocurrency significantly influences its adoption. When merchants are informed about digital currencies, they are more likely to perceive them as useful and trustworthy, which is crucial for bypassing reliance on traditional banking systems.
As Noah Kyalo pointed out:
"There’s a lack of a proper education system for people to learn about cryptocurrencies, how it works and why they should use it."
Efforts like Binance Charity‘s wallet program in Uganda and their $1 million initiative for blockchain education in South Africa are examples of how targeted educational programs can close the awareness gap. These initiatives aim to address the knowledge barriers that prevent wider adoption.
This issue is particularly relevant in Africa’s cryptocurrency landscape. While the market grew by over 1,200% between 2020 and 2021, the continent still accounts for just 2% of the global cryptocurrency value. This stark contrast suggests that despite rising interest, significant knowledge barriers continue to limit merchant participation in the digital economy.
Misconceptions and Knowledge Gaps Among Merchants
A lack of understanding often leads to misconceptions that hinder cryptocurrency adoption. For instance, many merchants wrongly believe Bitcoin is completely anonymous, even though it operates pseudonymously with all transactions recorded on a public ledger. Similarly, while the early days of cryptocurrency saw some illegal activity, Bitcoin’s transparency ensures transactions are traceable, challenging the outdated notion that crypto is primarily used for crime.
Other misconceptions include the belief that cryptocurrency is overly complex, despite the availability of user-friendly platforms. There’s also a fear that Bitcoin itself is vulnerable to hacking, even though breaches typically occur at exchanges or related services, not the Bitcoin network. Environmental concerns add another layer of hesitation, with critics often overlooking the growing reliance on renewable energy in Bitcoin mining. Additionally, some merchants view Bitcoin as a speculative bubble rather than a practical financial tool.
Algernon Austin, director at the Center for Economic and Policy Research, explains:
"They’re really a bad type of investment in that, generally speaking, there’s no real product or service behind it. When you buy crypto, you’re really just betting that other people are going to buy crypto. The hype has brought in a lot of people who don’t fully understand it."
These misunderstandings are particularly harmful when considering that 75% of Americans familiar with cryptocurrencies remain unsure about their safety and reliability. If similar doubts exist among African merchants, it’s no surprise that adoption rates remain low.
To address these barriers, targeted educational campaigns need to focus on correcting misconceptions and emphasizing the practical benefits of cryptocurrency. Highlighting its ease of use, reliability, and the importance of building trust will be essential for encouraging broader adoption.
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Cryptocurrency Adoption Comparison Across Major African Countries
The cryptocurrency scene in Africa varies widely between countries, influenced by economic conditions, regulatory policies, and infrastructure. These differences shape how merchants and individuals embrace digital currencies, reflecting the broader adoption challenges discussed earlier.
Regional Differences in Cryptocurrency Adoption
Nigeria stands out as a leader in Africa’s cryptocurrency market, ranking second globally. Between July 2023 and June 2024, the country processed $59 billion in crypto transactions, with an estimated 25.9 million users – an 11.9% penetration rate. Nigeria also leads the world in stablecoin adoption, accounting for about 40% of stablecoin inflows in Sub-Saharan Africa.
Chris Maurice, CEO and Co-Founder of Yellow Card, sheds light on this trend:
"About 70% of African countries are facing an FX shortage, and businesses are struggling to get access to the dollars they need to operate. Stablecoins provide an opportunity for these businesses to continue to operate, grow, and strengthen the local economy."
South Africa, on the other hand, emphasizes institutional adoption and the integration of cryptocurrency into traditional financial systems. Over the past year, the country received around $26 billion in cryptocurrency value, with 68% of its citizens having held or purchased digital currencies. Unlike Nigeria’s retail-driven market, South Africa is seeing growth in licensed companies and institutional activity.
Rob Downes, Head of Digital Assets at ABSA Bank, CIB, points to stablecoins as a key driver of this shift:
"I think stablecoins are going to be the primary use case for crypto in South Africa over the next three to five years."
Here’s a breakdown of key metrics and trends across major African countries:
| 1 | 2 | Nigeria | Retail-driven; stablecoin leader; ~85% of transactions under $1 million |
| 2 | 26 | Ethiopia | Fastest-growing stablecoin market, with 180% year-over-year growth |
| 3 | 27 | Morocco | Increasing institutional interest |
| 4 | 28 | Kenya | Strong mobile money foundation driving adoption |
| 5 | 30 | South Africa | Institutional focus with traditional finance integration |
Ethiopia has emerged as the fastest-growing market in Africa for retail-sized stablecoin transfers, with a remarkable 180% year-over-year growth. Similarly, Kenya benefits from a robust mobile money ecosystem that facilitates crypto adoption, while Ghana, ranked 46th globally, is also seeing increased engagement with digital assets.
Nigeria’s market is characterized by a high volume of small retail transactions, with 85% under $1 million. Meanwhile, South Africa’s crypto activity is led by larger, institutional transactions. Both markets are leveraging stablecoins to lower remittance costs – reducing fees by about 60% compared to fiat transfers for a $200 transaction.
Stablecoins now account for 43% of Sub-Saharan Africa’s transaction volume, providing a practical solution to operational challenges faced by merchants. In Nigeria, stablecoins make up about 40% of all inflows, and in South Africa, they have recently surpassed bitcoin as the most popular cryptocurrency.
Solutions for Improving Merchant Cryptocurrency Awareness
Addressing the earlier challenges, practical solutions focus on educating merchants, forming key partnerships, and simplifying access to information. These efforts combine structured learning and hands-on experience to make cryptocurrency more approachable and relevant to everyday business operations.
Education Programs and Training for Merchants
At a seminar held at Multimedia University in Nairobi, nearly 90 students signed up for free crypto courses, with 130 others joining a follow-up WhatsApp group. This turnout highlights the strong demand for accessible and practical cryptocurrency education.
In 2022, the University of Johannesburg took a significant step by adding a blockchain certification to its curriculum. As one of the first African universities to do so, it equips graduates with the skills to develop blockchain projects and raise cryptocurrency awareness across the continent.
Chris Acworth, Head of Cryptocurrencies at Learn Crypto, shared his perspective on the growing interest:
"We’d always known there was a need and argument for blockchain education in one of the world’s hotbeds of crypto interest. But after witnessing the enthusiasm and curiosity of students, we couldn’t be more pleased. We remain committed to being part of the efforts to empower Africa’s youth, fostering innovation, and driving economic growth through crypto education."
These programs are most effective when they tackle real business challenges. With 66% of Sub-Saharan Africans lacking access to traditional banking services, cryptocurrency education presents a viable alternative for financial inclusion. Binance CEO Changpeng Zhao underscored this potential:
"Africa illustrates one of the largest demands and instrumental use cases for cryptocurrency, notably for financial access. According to the World Bank, approximately 66 per cent of Sub-Saharan Africans are listed as unbanked. So instead of trying to bank the unbanked, let’s try and Bitcoin the un-Bitcoined."
By offering structured learning opportunities, these initiatives bridge the knowledge gap and lay the groundwork for partnerships that further support merchant adoption.
Building Partnerships and Providing Resources
Education alone isn’t enough – partnerships play a crucial role in making cryptocurrency accessible. Collaborations between universities, tech companies, and financial institutions create a robust support network for merchants. For example, in 2023, Pan-Atlantic University teamed up with EMURGO Africa to provide blockchain textbooks, Web3 training, internships, mentorship, and networking opportunities. This partnership shows how theoretical knowledge and practical experience can work hand in hand.
The success of mobile money platforms like M-Pesa offers a blueprint for how partnerships can transform financial services. Launched in Kenya in 2007 through a collaboration between Safaricom and Vodafone Group plc, M-Pesa grew to 66 million accounts by January 2021. It expanded globally, reaching over 800,000 users in 167 countries by the end of 2020, with more than half of foreign remittances from Kenyans abroad sent via the platform.
Traditional financial institutions are also stepping up to bridge the gap between conventional banking and cryptocurrency. Rob Downes, Head of Digital Assets at ABSA Bank, CIB, emphasized this potential:
"Traditional finance institutions are uniquely positioned to help usher in blockchain-based finance by leveraging our regulatory expertise and controls."
These collaborations tackle regulatory uncertainties and infrastructure gaps by combining established financial systems with emerging cryptocurrency solutions, making it easier for merchants to adopt these technologies.
How Tech In Africa Helps Spread Cryptocurrency Information
Beyond education and partnerships, spreading reliable information is essential for increasing merchant awareness. Tech In Africa plays a key role by breaking down complex cryptocurrency concepts and connecting them to real-world business applications. Its daily coverage of blockchain developments, fintech news, and startup success stories helps merchants see how cryptocurrency fits into Africa’s broader tech landscape.
What sets Tech In Africa apart is its ability to turn technical updates into actionable insights. By highlighting real-world examples, regulatory changes, and success stories, the platform helps merchants grasp the practical uses of cryptocurrency.
For instance, when major banks like ABSA introduce cryptocurrency custody solutions or when regulatory frameworks like Nigeria’s ARIP open new opportunities, Tech In Africa ensures merchants understand how these developments impact their businesses. The platform also acts as a resource hub, pointing merchants toward training programs, university initiatives, and partnership opportunities.
Through interviews with industry leaders, startup showcases, and market trend analysis, Tech In Africa creates an ecosystem of information that goes beyond the basics. This approach helps merchants address misconceptions, understand costs, and explore how cryptocurrency can solve real business challenges – all through reliable and accessible information.
Conclusion: Next Steps for Improving Cryptocurrency Adoption
For cryptocurrency adoption to thrive among African merchants, a combination of education, strategic partnerships, and regulatory clarity is essential. Africa’s cryptocurrency market is projected to handle an impressive $125 billion in on-chain value by 2024, making up over 5% of global transaction volume. Yet, this potential can only be realized by addressing the awareness gap that continues to hinder merchant adoption. Encouragingly, various educational initiatives are already paving the way.
Programs like Tether‘s collaboration with the Africa Blockchain Institute and Quidax‘s efforts in Nigeria are making a difference. These initiatives need to go beyond academic institutions and engage directly with merchants, focusing on hands-on, practical applications rather than abstract theories.
Collaboration between public and private sectors is equally critical. Paolo Ardoino, CEO of Tether, highlighted this during the company’s partnership with Zanzibar’s e-Government Authority:
"By combining clarity with educational investment and digital asset integration, we will be laying the foundation for a compliant, scalable, and inclusive digital economy."
Such partnerships provide merchants with the regulatory certainty they need, while also ensuring access to training and resources.
Success stories across the continent reinforce the importance of removing barriers. For instance, Tando facilitated 10,000 transactions linking Bitcoin with mobile money in East Africa. Similarly, Machankura expanded Lightning payment options to basic mobile phones across eight African countries, and Afribit Kibera onboarded over 40 merchants in Kenya’s largest slum. These examples show that when obstacles are addressed, adoption grows rapidly.
Research further emphasizes the importance of tackling misconceptions and focusing on key factors like ease of use, usefulness, and trust. Educational content must address merchant concerns about costs, security, and compliance. Platforms like Tech In Africa are already playing a vital role by simplifying complex developments into actionable insights for businesses.
Moving forward, unified action is essential. Governments must clarify regulations, tech companies should continue investing in infrastructure and education, and platforms must work to close the knowledge gap. With 66% of sub-Saharan Africans lacking access to traditional banking services, the opportunity to build an inclusive digital economy through cryptocurrency has never been more urgent – or achievable.
The groundwork is in place, partnerships are forming, and education initiatives are proving effective. The next step is scaling these efforts to reach millions of African merchants, unlocking the potential to transform not just businesses, but the broader economic landscape of the continent.
FAQs
What efforts are being made to educate African merchants about cryptocurrency?
Across Africa, several initiatives are working to help merchants grasp and embrace cryptocurrency. For instance, Binance Charity and Learn Crypto are running free seminars, educational programs, and hands-on training sessions to teach practical skills, such as how to use crypto wallets effectively. Similarly, organizations like Tether and the Africa Blockchain Institute are hosting workshops that provide blockchain education through hackathons, mentorship programs, and online courses.
These programs focus on practical applications, aiming to close the knowledge gap and build confidence among merchants and entrepreneurs in adopting cryptocurrency.
How do varying regulations across African countries affect merchants’ ability to adopt cryptocurrency?
Cryptocurrency adoption among merchants in African countries is heavily influenced by varying regulatory environments. In some places, the lack of clear guidelines creates a cloud of uncertainty, making it a risky move for businesses to incorporate crypto into their operations. Meanwhile, stricter regulations – or even outright bans – can completely block merchants from using or accepting cryptocurrencies.
This patchwork of rules across borders complicates cross-border transactions and slows down broader adoption. Merchants often struggle to make sense of these inconsistencies, which leads many to hesitate before considering cryptocurrency as a practical payment method or business solution.
How do stablecoins help African merchants overcome challenges with cryptocurrency adoption?
Stablecoins present African merchants with a practical way to tackle some of the biggest hurdles in adopting cryptocurrencies. By being tied to fiat currencies like the US dollar, stablecoins provide a consistent and dependable digital currency. This stability helps merchants sidestep the challenges of volatile exchange rates and the impact of high inflation, issues that are all too common in many African nations.
On top of that, stablecoins simplify cross-border transactions, making them quicker and less expensive. This not only reduces the cost of remittances but also opens doors for merchants to access global markets. For those without access to traditional banking systems, stablecoins offer a gateway to the digital economy, promoting financial inclusion and empowering underbanked merchants to grow their businesses. All these factors position stablecoins as a powerful tool for breaking down financial barriers and supporting economic progress across the region.
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