ACR Weekly: SA Takes Top Spot (#34)

Welcome back to the African Crypto Weekly. At the beginning of the year, it was almost guaranteed that each week, Nigeria would post a higher weekly trading volume than South Africa on LocalBitcoins. And we are talking big margins – Nigeria regularly eclipsed South Africa’s weekly volume by $250K.

Then in mid-July, something happened. South Africa started beating Nigeria’s weekly volume and never looked back. After 20 straight weeks of weekly wins, as of this week, South Africa has now taken the top spot on LocalBitcoins.

This is some fighting talk and so I double checked the trading volumes in Bitcoin terms and yes, South Africa has bought more Bitcoins than Nigeria this year on LocalBitcoins. Nigeria has faced headwinds because it’s fighting a war on two fronts – crypto winter and a Naira that has fallen ~35% against USD this year based on our data.

A key question is how things look on other major P2P platforms, like Paxful and Binance P2P. Paxful data is public, and so more to come on this. In the meantime, let’s take a look at how things played out last week.

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Africa Combined

For the week ended 20 November, Africa Combined volume on LocalBitcoins was $1.26 million, which represented a 3% improvement on the previous week’s volume of $1.23 million. Transactions came in at 4,420 for the week ended 20 November, which represented a 2% decline on the previous week’s count of 4,517 and marked a new low for 2022.

South Africa

SA’s volume for the week ended 20 November was $539.7K, which represented a 32% improvement on the previous week’s volume of $409.2K. Transactions came in at 1,063 for the week ended 20 November, which represented an 8% improvement on the previous week’s count of 988. For the first time in 2022, South Africa now ranks above Nigeria in YTD volume terms. Note that this only applies to the LocalBitcoins platform, and further research is needed to confirm if this is happening on other P2P platforms too. The gap between SA & Nigeria for the top spot in YTD volume terms now sits at $2.3K in SA’s favour.

Nigeria

Nigeria’s volume for the week ended 20 November was $339.8K, which represented a 3% decline on the previous week’s volume of $349.7K and marked a new low for 2022. Transactions came in at 1,218 for the week ended 20 November, which represented an 3% decline on the previous week’s count of 1,253 and marked a new low for 2022.

Kenya

Kenya’s volume for the week ended 20 November was $215.2K, which represented a 41% decline on the previous week’s volume of $362.6K and marked a new low for 2022. Transactions came in at 1,461 for the week ended 20 November, which represented a 12% decline on the previous week’s count of 1,656 and marked a new low for 2022.

Regulatory – Kenya

On Monday, Kenya’s Business Daily reported that a bill seeking to introduce the taxation of cryptocurrencies had been introduced in Kenya’s National Assembly. The proposed taxes are aimed at crypto exchanges and digital wallets. The regime would tax crypto profits as income or capital gains, with profits being treated as income if the digital assets are held for less than a year, and capital gains if they are held for longer. There would also be an excise duty on all crypto transaction fees, similar to the 20% currently paid by Kenyan banks on all commissions and fees. Business Daily reports that this would be the first step by Kenya’s government towards directly regulating crypto. In a TV appearance, MP Bernard Kitur explained that the rationale behind the law is to expand Kenya’s tax base given how many Kenyans are getting involved with crypto. Also appearing in the same segment was Economist Dr XN Iraki, who stated that if the Kenyan government wants to tax crypto, it should also put measures in place for consumer protection.

Hiring – Binance

Staying with Kenya, this week, Binance announced the appointment of Nadeem Anjarwalla as Director for East Africa. Business Daily reports that Anjarwalla will lead Binance’s operations across twelve markets in the eastern region of Africa. Previously, Anjarwalla was a Partner at VC firm Global Founders Capital and also worked as a General Manager at Uber Eats prior to that. He holds a BA from the University of Oxford and an MA from Stanford.

Expansion – VALR

Last Friday, the South African exchange VALR announced the expansion of its services into Zambia. Users can now connect their Zambian bank accounts to their VALR accounts, allowing them to deposit and withdraw Zambian Kwacha from the platform. VALR also announced that users are now able to trade Bitcoin and the USDC stablecoin directly against the Kwacha. The announcement highlighted that since launch, VALR has seen $10 billion in volume for pairs that trade against the South African rand.

Launch – DoshFX

On Thursday, DIFX and eZaga announced the launch of a new Africa-focused crypto exchange, DoshFX. DIFX already operates as an exchange and allows users to trade a variety of financial assets, of which crypto is one. According to CoinMarketCap, DIFX’s crypto exchange business is ranked 67^th in the world and as of writing, the exchange saw $68.2 million in spot trading volume in the past 24 hours. eZaga is a South African digital banking platform and an authorised financial services provider in the country. The new exchange – DoshFX – is a joint initiative between DIFX and eZaga. DoshFX will utilise the crypto and banking solutions of its parent entities to deliver its services.

Partnership – Lirium & Mara

Last month, Mara announced the launch of its crypto wallet service, the Mara Wallet. This week, we got some additional technical background as to how the crypto wallet comes together. The Mara Wallet is powered by a solution provided by Lirium, a crypto infrastructure company based in Liechtenstein. Lirium provides a “plug and play” solution for digital wallet providers, allowing them to offer wallet users access to crypto without having to deal with regulatory or other operational concerns. In a press release, Lirium founder Federico Murrone shared his excitement to be working with Mara, which is his company’s first client in Africa. To date, Lirium has been focused on growing its presence in Latin America, where it boasts customers from eight countries in the region.

Layoffs – Quidax

On Thursday, Nigerian crypto exchange Quidax announced that it is laying off 20 members out if its staff of 100. TechCabal reports that the startup confirmed that that these layoffs are unrelated to the FTX fallout and are instead driven my macroeconomic conditions.