Depth report: Potential and development of Crypto Assets & stablecoins in the digital economy of Africa

Africa is ushering in a period of development of the digital economy. From mobile payments and e-commerce to the rise of Jiding Coin, digital technologies are driving economic change across the continent. This report will delve into the current situation, challenges and future developments of Africa's digital economy, and analyze the development trends of financial technology, cross-border trade and inclusive finance. (Synopsis: VALR Wilo participates in Taipei Block Chain Week TBW, marketing chief talks about the potential of Web3 in Asia and Africa) (Background supplement: Ark report: Stable Coinvolume breaks $15 trillion in 2024, surpassing payment giants Visa and Mastercard) 1. Introduction 1.1 Africa's Digital Economy With the rapid development of the global digital economy, Africa is at the crossroads of economic transformation and sustainable development driven by the digital economy. With a total area of more than 30 million square kilometers, Africa has a population of more than 1.4 billion and is rich in natural resources as of 2022. According to the World Bank, in 2022, the continent's GDP will be about $2.98 trillion and maintain an annual growth rate of more than 3%, while according to Endeavor's report, the size of the digital economy in Africa as a whole will be about $115 billion in 2022, accounting for 3.86% of GDP, and is expected to reach $712 billion in 2050, compared to Asia's digital economy accounting for more than 30% of GDP in 2022. The development of Africa's digital economy has great potential. The digital economy covers multiple industries such as digital finance, digital business, digital education, etc. Digital finance blends traditional finance with digital technology, with up to 66% of Africa's population unbanked – people and businesses in all countries face challenges such as payments, loans, savings, and insurance. The number of Africa-related fintech companies has surged in recent years. According to statistics, African fintech companies raised nearly $200 million in 2017, the top 10 African fintech companies raised nearly $300 million in 2018, and the total investment of more than $5 million in a single financing in 2019 has exceeded $580 million. The hottest industries in digital finance in Africa are mobile payments (digital wallet), online lending, online remittance, etc. Financial inclusion is one of the biggest opportunities for Africa's digital industry, and its core is the use of digital technology to solve the problem of financial service coverage on a large scale. Distribution of major fintech companies in Africa According to Statista's statistics, in 2024, the scale (transaction value) of mobile payments in Africa will exceed $195 billion, more than double that of 2020, maintaining a double-digit compound annual rise rate, which is expected to rise further to $314.8 billion by 2028. Over the past two years, electronic payments have reached record highs in many African countries. According to Central Bank in Nigeria, mobile coin volume in Nigeria doubled to about 800 million in 2020; According to South Africa, online commerce rose by about 40% between 2020 and 2021. Digital payments are becoming a growing payment method on the continent. In 2023, 17% of consumers in Africa use digital payment services every day, and the proportion of consumers who use digital payment services every week reached 48%. The scale of Africa's digital payment market Mobile coin is currently the most important and fastest form of digital payment in Africa. According to the GSMA's "The State Of The Industry Report On Mobil Money" report, in 2023, the number of mobile coin registration accounts in Africa will reach 856 million, accounting for 49% of the global registered accounts, and 136 million new registration accounts, accounting for more than 70% of the total rise of global registered accounts, which is already the most important rise source of global mobile coins. There are currently around 169 mobile coin services in Africa, including M-PESA, Airtel Money, Orange Money, MTN Mobile Money, Ecocash and Tigo Pesa, among others, which allow users to deposit, send and receive money using their mobile phones, providing a convenient alternative to traditional banking, especially in areas with limited banking infrastructure. In addition to improving financial inclusion and access to other digital services, the adoption, use and rise of mobile coin has also driven the rise of Africa's mega economy. Mobile coin contributed more than $150 billion to Sub-Saharan Africa's GDP rise, with a contribution rate of 3.7%. It contributes 5.9% to GDP in East Africa. Contribution of mobile goods coin to GDP in different regions Digital commerce, also known as e-commerce or e-commerce, e-commerce in Africa has problems such as insufficient infrastructure construction, late start, and imperfection, but the characteristics of a large population base, a high proportion of young people, and large room for improvement attract investors from all over the world. According to Statista, the African e-commerce market is expected to reach $49.02 billion in online retail revenue in 2023, with an annual rise rate of nearly 14%. By 2027, the user base of the African e-commerce market could soar to 600 million, with a user penetration rate of 44.3%. The benefits of this expansion are multifaceted, including economic gains, job opportunities, and improved access to goods and services in rural remote areas. The African e-commerce industry has redefined traditional supply chains and business models. For example, Twiga Foods in Kenya sources products directly from farmers and efficiently delivers them to urban retailers, streamlining the agricultural value chain. MaxAB in Egypt is a platform that connects food and grocery retailers with suppliers in underserved areas. This all adds diversity to innovative solutions in the e-commerce sector in Africa. The Pan-African Payment Settlement System (PAPSS) is a payment solution that facilitates payment transactions across Africa without relying on correspondent banks outside the continent. With more than 10 countries and commercial banks adopting PAPSS, the e-commerce industry has made a significant rise. In addition, the digital economy also plays an important role in traditional sub-sectors such as logistics, agriculture, education, energy, and mobility, which not only promotes economic and technological development, but also drives innovation. For example, two companies, Kobo360 in Lagos, Nigeria, and Lori Systems in Nairobi, Kenya, have introduced digital technologies and means to the traditional road transport market, thereby improving the efficiency and reliability of the entire process and dropping the empty rate of trucks, resulting in the vast majority of drivers' revenue rising by more than 50% after partnering with the platform. In the past, the lack of teachers, lack of school fees, gender gap, security issues, long distance to school, and lack of access to smartphones were the main reasons for restricting education in Africa, so Eneza Education, an educational technology company from Kenya, chose to serve feature phone users through USSD and SMS. According to the official website, the number of users has risen to 4.9 million, the number of messages sent per day has exceeded 1 million, the cumulative number of students has answered more than 1k questions, and the cumulative number of questions has exceeded 1 million. 1.2...