Why Africa’s Building Blockchain While the West Chases Wacky Memecoins 🤪

by

In the lands of Western Europe and North America, where the folks are as keen as a hound dog on a rabbit’s trail, decentralized finance—commonly dubbed DeFi—is viewed as little more than a fancy investment scheme.

The following guest post/opinion editorial was penned by Kamal Youssefi, the big cheese over at The Hashgraph Association.

How Blockchain Can Replace Broken Financial Systems

While misguided asset managers in the West peddle their wares—staking, yield strategies, and even ETFs that track meme coins, all tied to political noise that’s as reliable as a weather vane in a tornado—billions are flowing like Mississippi mud into this circus of financial engineering. But cast your gaze southward, and you’ll see Africa taking a very different approach to blockchain; they’re not tossing speculative coins into the wind, oh no! They’re using it as a sturdy store for their hard-earned pennies and a lifebuoy for those drowned in a sea of financial inadequacy.

The African continent is home to a sprightly bunch—the youngest and most digitally savvy generation you’ll find this side of the equator. As we approach 2024, Sub-Saharan Africa is set to boast over 500 million mobile money users, a fact that’s more astonishing than a cat chasing its own tail. However, the reality is that a staggering 51% of adults still remain unbanked, not just because they can’t find a bank, but because they’re locked out of the very tools that could help them rise above their station—like remittances, insurance, and good old-fashioned credit.

Decentralized finance in Africa isn’t merely a passing breeze; it’s a veritable necessity. Adoption is sprouting like weeds in a neglected garden, especially in peer-to-peer dealings. In Chainalysis’ 2024 Adoption Index, Nigeria takes a fine second place globally for DeFi usage, with its neighbors like Kenya and Ghana playing catch-up. With 95% of on-chain transaction value consisting of transfers below $10,000, it’s clear these aren’t corporate Wall Street shenanigans, but everyday folk trying to shield their savings from inflation and reduce pesky remittance fees.

DeFi Offers a Solution Where Traditional Financial Systems Have Failed

Stablecoins are emerging as one of Africa’s most cunning tools in the Web3 toolbox. With local currencies wobblier than a three-legged dog, folks are turning to dollar-pegged assets like USDT and USDC for practical transactions—think of it like a lifeboat in a stormy sea of economic uncertainty. Chainalysis reports that stablecoins now account for a whopping 43% of all blockchain transaction volume in the region.

What we see here are tangible examples, not mere hypothetical dreams. In the bustling streets of Kibera, Kenya, grassroots projects are making peer-to-peer commerce a reality with Bitcoin and stablecoins—helping citizens dodge mobile money fees and the irritating gatekeeping of banks. Platforms like Yellow Card are experiencing growth across over 20 countries, proving that blockchain is becoming a tool for building rather than just a playground for rich investors.

Africa’s crypto wave isn’t just about trading; it’s about building a sturdy, homegrown financial system.

Africa’s Blockchain Movement Is Being Built From the Ground Up

While the Western media is caught up in the whirlwind of DeFi speculation, it’s the builders in Africa—bless their hearts—who hold the true treasures. As reported by CV VC’s 2024 African Blockchain Report, these visionary folks have bagged 6.4% of all African venture capital funding in the first half of 2024—nearly double the global average of 3.5%. That’s not just curiosity; that’s faith in homegrown solutions for homegrown problems.

And where’s this money going? From Nairobi to Lagos to Accra, developers aren’t just playing around; they’re crafting a whole new financial infrastructure from scratch. Tools for cross-border remittances, decentralized lending, and identity protocols are being designed with markets in mind that traditional finance has long neglected. Oh, and in Nigeria alone, Web3 developers have surged by 28% year-over-year! That’s a chart going up faster than a sneeze in a quiet church.

With notable projects already live—like Kotani Pay in Kenya enabling SMS transfers of stablecoins and Ayoken, a pan-African NFT marketplace—it’s becoming crystal clear: this isn’t just a tale of passive adoption; it’s a blazing movement towards financial independence paved by African ingenuity.

Africa Is Navigating Blockchains’ Hardest Problems, and Building Through Them

Now, let’s talk turkey. African builders are tackling Web3’s toughest challenges with gusto, crafting solutions out of necessity rather than abundance. They address issues like unreliable infrastructure, exclusion from formal ID systems, and sky-high costs of moving money across borders.

Take Nigeria, for instance. The tangled mess of banking regulations has prompted developers to create systems that are as adaptable as they are resilient. Not to be outdone, startups are also hatching tools that reflect real-world realities—like Fonbnk, which converts prepaid airtime into stablecoins without a bank account or smartphone. Ain’t that a peach?

Speaking of barriers, let’s not forget the swindling remittance fees that have folks sweating bullets. Traditional services are about as useful as a screen door on a submarine, what with their costs and snail-like speeds. Blockchain transfers are here to save the day with fees below 1% and settlements in mere minutes—that’s like going from a horse-and-buggy to a Ferrari.

Of course, these challenges are about more than just technology; they’re social struggles, too. Youth unemployment and a lack of trust in government institutions have created fertile ground for risky behaviors. But innovative platforms are introducing safeguards like spending caps and educational prompts to steer users clear of trouble—a bit like teaching a cat to bath in a creek.

The Future of Web3 Won’t Be Built in a Bull Market, It’s Being Built in Africa

Africa is not just a follower of the hype cycle; it’s constructing a parallel financial system born out of sheer necessity. Throughout the continent, blockchain is proving to be a thoughtful answer to challenges like regulatory unpredictability, currency fluctuations, exorbitant remittance costs, and traditional finance’s exclusionary walls.

It’s not just about utilization; it’s about innovation too. African developers are forging custom infrastructures despite facing unreliable connectivity, capricious regulations, and tangled social dynamics. They’re pushing the limits of what blockchain can do under conditions that will truly test the waters.

So, if mass adoption is the end goal, ain’t it high time we watched the real action? And where do we find that? You guessed it: Africa!

Read More

2025-07-13 01:44