South Africa is not the poorest country in the world, but it is the most unequal, according to the World Bank, and while 11 million people are unbanked the nation ranks first when it comes to cryptocurrency ownership among internet users, which could be the start of mass adoption there.
World Bank list of most unequal countries
Cryptocurrency in South Africa
The fact that cryptocurrency usage in South Africa tops various lists is not all that surprising as many experts have argued that inflation and poverty push people towards cryptocurrency ownership.
“With economic crises knocking at their doors, countries like Iran, Turkey, Venezuela, Argentina and Zimbabwe turn towards cryptocurrencies such as Bitcoin to keep it all together,” said crypto writer and Kryptomoney Founder Rohit Kukreja in an article.
Bitcoin.com agrees with this as revealed in an article they published a couple months ago. In it, they say cryptocurrency has expanded globally. It adds that a poll conducted by Statista shows that people in economically troubled countries tend to turn to decentralised digital currencies far more readily than those in thriving nations.
Statista, according to the crypto news outlet, surveyed 400,000 people in 46 countries and South Africa popped up in fifth place as 16% of the population said they used or owned cryptocurrencies.
Turkey was at the top of the list with 20%, followed by Brazil and Colombia with 18%, and Argentina also with 16%.
The 2019 Global Digital Yearbook ranked South Africa at the top of its cryptocurrency ownership list followed by Thailand, Indonesia, Vietnam, Brazil, and Nigeria, among others. The survey, in this case, was specifically targeted to internet users, which may explain the difference between one poll and the other.
As in the rest of the world, South Africans began their journey into crypto through Bitcoin. Transaction volumes in the country peaked in April 2016 and again in December 2017. Bitcoin trading volumes are back on the rise in South Africa as shown in the following infographic.
According to Nichemarket, the most popular cryptocurrencies today are Bitcoin, Ehtereum, Litecoin, and EOS. However, as the website notes, South Africans see these cryptocurrencies as investments.
There is, however, only one cryptocurrency that has real utility in the Sub-Saharan African country. Electroneum has created an ecosystem. It can be used in South Africa to top up The Unlimited mobile airtime and data. Many retailers are also beginning to accept ETN for purchases of bread, milk, sugar, and coffee. Many taxis are also now receiving payment in Electroneum.
READ ON COINBEAT: ETN Mass Crypto Adoption in Developing Regions
One of the two founding fathers of blockchain, Dr. Scott Stornetta, recently said that “the way for mass adoption is to add value to the end user as Electroneum is focusing on doing with their cryptocurrency.”
Poverty on the rise
The governmental Department of Statistics of South Africa released a report on 22 August 2017 revealing the population living poverty had declined from 66.6% in 2006 (32.9 million) to 53.2% in 2011 (27.7 million), but then increased to 55.5% (30.6 million) in 2015.
Africa Check released 2015 statistics of their own breaking down the general and children population living in poverty by ethnic groups.
The World Poverty real-time website on 8 August 2019 showed that 13.3 million people in South Africa live in extreme poverty, which means they survive on less than US$1.25 a day.
The Huffington Post published a video on their website where they claim that over half of South Africans live in poverty and manage to survive with under US$59 a month.
Mobile phone usage
Sub-Saharan Africa, which includes South Africa, has experienced significant growth in internet use among the population, according to a Pew Research Centre report published in October of last year.
The analysis reveals that the Sub-Saharan African people feel very positive about the influence of the internet in their countries, including in the area of education, economy, and politics.
The Pew Research study outlined the fact that 79% percent of the population has used a smartphone to receive or make payments on mobile phones. Also, 91% of adults own a mobile phone, be it a smartphone or a feature phone.
South Africa smartphone penetration has now gone beyond the 80% level, according to ICASA. They added that smartphone subscriptions stood at 47 million as of 30 September 2018, which is a figure to be noted as the population is nearly 59 million.
Last year, 13.5 million smartphones were sold in South Africa, a 7% increase from the previous year, which is far higher than the global sales growth of 1%, according to the Business Insider.
A country of contradictions
South Africa is undoubtedly a country of contradictions. For many years after the end of Apartheid in 1994, the country began turning eyes globally as its economy began to grow.
In July 2017, an Organisation for Economic Cooperation and Development report said that the South African economy had accomplished enormous social progress. It spoke of a country that gave millions of people access to vital public services, including education, health, and housing.
However, now the economy is on a downturn as the Gross Dosmestic Product slows and investment shrinks, according to Bloomberg. The crude reality is that apart from about 30 million South Africans living in poverty, including 6 million children, 7.1 million people living with HIV, and unemployment is gradually increasing, standing at 29% currently, according to Trading Economics.
But with cryptocurrency users on the rise in a country where the Finance Minister Tito Mbweni has established a cryptocurrency regulatory working group, and given the rise of mobile phone purchases, South Africa represents a huge opportunity for blockchain companies and cryptocurrencies that look to provide people on the ground with the tools they need to live more.