Expatriates from Africa living across the globe prefer crypto remittances rather than sending money through Moneygram or Western Union. The reason being low cost and effectiveness while the money sent through Moneygra or Western Union is time-consuming and exorbitant, which is also above the estimated rate determined by the UN for under-developed countries.
There is a lot going in Africa with regard to crypto.
Some two months back, the African region was considered as one of the rapidly growing crypto adopting regions. However, the central banks of various African states are implementing anti-crypto adoption policies. For instance, recently the Central Bank of Nigeria had passed crypto directives that have seriously hurt Nigeria’s crypto adoption.
Although the Nigerian Government is alleging that its intention is not to impose a ban on crypto, however, the argument is inaccurate. Apparently, crypto trading exchanges have been deprived of using banking facilities, particularly maintenance of accounts. The reason behind the directives was that in Nigeria remittances through crypto were rapidly increased. On the other hand remittances through traditional modes were found to be record low. Because of this low percentage of remittances, the Central Bank of Nigeria took an action that indirectly affected the crypto community of the country.
But still, the love of African people for Bitcoin is undeniably strong, particularly since lockdowns were imposed in 2020.
Meanwhile, a report has been published by Quartz Africa suggested endorsed the fact that crypto remittances were rapidly increasing. The report also noticed that because traditional money exchangers were charging exorbitant fees, therefore, people sought refuge in crypto remittances. Both the world acclaimed money exchanges i.e. Moneygram and Western Union were reportedly collecting exorbitant fees.
For instance, against each remittance, the money exchangers were charging a fee of 8.47%. This percentage was also beyond the average rate provided by UN Sustainable Development Goal for the under-developed countries.
It was further noticed that the Africans working outside Africa were also using crypto remittances instead of traditional exchanges. Quartz Africa’s report reveals that crypto funds amounting to US$ 562 Million were remitted into the African region. The obvious reason for this is that when the money is sent through crypto, the sender is charged with cheaper rates. However, in the case of transfer of funds through traditional sources is rather costly and time-consuming as well. While the money sent in crypto is received at the receiver’s end instantaneously, without any hindrance.
However, now the African governments are trying to curtail the usage of crypto remittances by expatriates. Firstly, it was Nigeria that had issued directives banning crypto exchanges and crypto remittances. Now there are other African countries as well who are planning to introduce directives that would be similar to those of Nigeria. Would it be the end of crypto remittances in Africa?