Bitcoin expands in Africa amid the 'crypto' earthquake and the SOS in El Salvador

The cryptocurrency market is going through great turmoil. The ‘stablecoin’ Terra was unlinked a few days ago from the dollar, and since then it has been submerged in a deep fall that has dragged down most of these assets to follow the same ‘luck’. In the midst of one of the key moments for the crypto industry comes precisely the announcement of MARA, a new cryptocurrency exchange that has just raised $23 million to operate in Nigeria and Kenya, the two largest economies on the African continent.

MARA will allow trading with crypto assets, is backed by Coinbase or Alameda Research and will be Pan African. According to calculations by the World Economic Forum, the adoption of bitcoin grew by 106,000 million dollars in the continent until mid-2021, and the platform looks to continue to expand further in the coming years.

According to the independent platform Chainalysis, the 35% of Nigerian adults own or trade Bitcoin, and some African countries have a significant number of cryptocurrency users.

Crypto panic: bitcoin pierces $27,000 and the ‘stablecoin’ Terra continues its collapse

Carlos Rodriguez

In addition, the ‘exchange’ wants take advantage of the potential he sees in African countries and their youthso it will also seek to support and encourage the development of decentralized applications and its own products on the Web3.

To this end, it will also advise the Central African Republic, one of the poorest countries in the worldwith an economy based on the primary sector: mining and crops of wood, tobacco, coffee or cotton, which represented 42% of GDP in 2021. Despite these data, the CAR became last month the second country to adopt bitcoin as legal tender, ignoring the results it is giving in El Salvador, a country that is heading towards ‘deafult’ (non-payment of its debt), and the warnings from the International Monetary Fund (IMF) to backtrack on implementation.

Since its independence in 1960, in addition to a vulnerable economy, “RCA has been characterized by its political instability and for its frequent internal armed conflicts”, underlines the Ministry of Foreign Affairs in a file on the country. However, his National Assembly unanimously approved the law and one of the president’s close men, Obed Namsio, has said that believe that this rule will place the country “on the map of the bravest countries and visionaries of the world.

Photo: Photo: Reuters/Jose Cabezas.
Bitcoin as legal tender is not working: El Salvador is heading towards ‘default’

PS

What MARA will do is advise the country to adopt cryptocurrencies on a larger scale and set the roadmap that adapts the economy to the implementation of these assets; but it has important challenges. Only 11% of the 5 million of its citizens have access to the Interneta necessary requirement to be able to trade cryptocurrencies, according to DataReportal.

The ‘exchange’ backed by Coinbase, the largest platform in the United States, has recommended the country improve Internet penetration among its citizens; and the RCA hopes this “historic decision” will attract investors foreigners, explains a spokesman for President Faustin-Archange Touadera in statements collected by Bloomberg.

Precisely Coinbase, which has recently presented disappointing business results, has issued a worrying warning. Should it ever file for bankruptcy, “crypto assets we hold in custody on behalf of our clients may be subject to bankruptcy proceedings”; with what users would lose control over their assetswhich would serve as payment to creditors.

The cryptocurrency market is going through great turmoil. The ‘stablecoin’ Terra was unlinked a few days ago from the dollar, and since then it has been submerged in a deep fall that has dragged down most of these assets to follow the same ‘luck’. In the midst of one of the key moments for the crypto industry comes precisely the announcement of MARA, a new cryptocurrency exchange that has just raised $23 million to operate in Nigeria and Kenya, the two largest economies on the African continent.

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