The adoption of blockchain-based payments is experiencing meteoric growth in the Middle East and Africa, profoundly transforming the financial ecosystems of these regions. According to a recent study by Ripple, a company specializing in digital payment solutions, more than half of the decision-makers surveyed in these geographies see blockchain as a key element in facilitating cross-border payments.
This trend takes place in a context where digital infrastructures are developing rapidly. Massive investments in mobile networks and fiber optics have enabled better connectivity, essential for the adoption of cutting-edge technologies such as blockchain. Countries such as the United Arab Emirates and Saudi Arabia have launched national initiatives to strengthen the digitalization of their economies, notably through smart cities and digital public services.
In Africa, countries like Nigeria, Kenya, Egypt, Ghana and South Africa are at the forefront of digital payments. According to McKinsey, around half of Africa’s digital payments revenue will come from these five countries, with Nigeria showing the fastest annual growth rate at 35%. In 2023, the total transaction value for digital payments in Africa is expected to reach $146.60 billion, according to Statista.
However, despite this growth, challenges remain. Distrust of failed transactions and reconciliation issues are holding back the full adoption of digital payments. Blockchain technology, with its immutability and transparency, offers promising solutions to overcome these obstacles. Companies like Zone have developed decentralized blockchain-based payment infrastructures, enabling more reliable transactions and reducing costs by eliminating middlemen.
The blockchain market in the Middle East and Africa is growing. The forecast indicates growth from $199.37 million in 2021 to $7,615.09 million by 2028, with a compound annual growth rate (CAGR) of 68.3%. This progression is supported by the increased adoption of blockchain in various sectors, including finance, retail, government and healthcare.
The widespread adoption of mobile payment services in Africa is also leading many to view cryptocurrencies as the natural next step, providing an alternative to conventional banking systems and protection against currency devaluation.
In conclusion, the Middle East and Africa are becoming major players in the adoption of blockchain-based payments. Continued investments in digital infrastructure, combined with a young, tech-savvy population, create an environment ripe for financial innovation. Blockchain, by improving the transparency, security and efficiency of transactions, plays a crucial role in transforming payment systems in these regions.
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