The adoption of cryptocurrencies in Cameroon has been slow but has experienced steady growth due to its young and tech-savvy population. Individuals and businesses are opting for crypto-based solutions due to their decentralized nature, transparency, and security benefits.
Cameroon boasts a population of over 29 million persons, with over 900,000 already adopted cryptocurrencies and other digital assets. Revenue of the crypto market is projected to reach US $2.59 million by 2024 from US $1.79 million in 2023. An annual growth rate of 12.31% (US $4.12 million) is expected by 2028 (Statista).
However, this growth is being threatened by regulatory challenges, market volatility, education, technical expertise, the emergence of Ponzi schemes, and cryptocurrency-related scams.
Let us explore all these in detail.
The Rise in Adoption of Crypto in Cameroon
The emergence of COVID-19 in 2020 brought about a high influx of users of digital platforms for transactions due to their versatility and convenience. This brought about a spike in the revenue of the cryptocurrency market in Cameroon from about US $220,000 in 2020 to a whopping US $1.3 million the following year, in 2021.
Source: Statista
The early stage of crypto adoption in Cameroon was just as it was in other countries within the African continent. It was faced with skepticism and was approached cautiously due to its technical nature. Education and the technical expertise to explore this new technology were limited.
However, some individuals and small-scale businesses led the way, and over time, as awareness of blockchain technology started gaining more traction, the acceptance grew. This acceptance skyrocketed when the winds of economic growth due to crypto adoption became clearer in other countries.
Current State of Crypto Adoption in Cameroon
The usage of cryptocurrency in Cameroon is quite limited due to the lack of regulation and price volatility issues, and as such, most traders do not accept cryptocurrencies as payments. However, some local startups and businesses are coming to the rescue.
These crypto-based startups have developed exchange platforms where users can trade cryptocurrencies in Cameroon. Currently, there are over 20 cryptocurrency startups in Cameroon, which include Ejara, Interstellar, Simbcoin Swap, UNICORN Token, AmbaCoin, and others.
Source: Mercy Corps
These companies are changing the narrative by simplifying the complexities of cryptocurrencies and making it easier for the Cameroonian people to harness the potential of this technology.
Recommended reading: History of Cryptocurrency Exchanges
It is worthy of note that Cameroonians who are adopting cryptocurrencies are utilizing social networks and online forums to share information and hold discussions continually on cryptocurrencies.
Social platforms such as Telegram groups and Facebook pages are being used to connect enthusiasts and provide a space for answering questions, sharing tips, and discussing market trends.
The Key Players
The cryptocurrency market has witnessed a dynamic interplay of various key players, despite being in its budding stage. These players are making their mark in contributing to its growth in Cameroon.
The market is filled with cryptocurrencies such as Bitcoin, Ethereum, and a few notable others gaining momentum. These digital currencies are mostly not just used for investment purposes but also gaining ground as a medium of payment.
Startups
The emergence of crypto-based startups, as earlier mentioned, eased the buying, selling, and trading of digital currencies. They provide services that accommodate all kinds of users, from simple wallet functionality to complex trading options for novices and pro traders.
Furthermore, these companies are essential in providing access and liquidity to the market, serving as the backbone of cryptocurrency transactions in Cameroon. A lot of these FinTech startups and technology firms have been actively building the cryptocurrency landscape in Cameroon and deploying blockchain solutions.
Their involvement is not limited to crypto exchange but has extended to consulting services, customization of cryptocurrencies, and application of blockchain-based solutions to addressing conventional problems.
International Players
International players are not left out, as they are also making their mark in Cameroon. In 2022, Binance collaborated with Inoni Tech to launch the first-of-its-kind crypto hub-training center for in-person blockchain education sessions.
Through this hub, a lot of crypto enthusiasts are getting more resources and the required education and information to thrive within the ecosystem and as well build offline connections.
These international players acknowledge the strategic position of Cameroon in Central Africa and the untapped potential of its tech-savvy population. This is a testament to their presence and involvement in the market and their contribution to the growth of crypto education in Cameroon.
Consumers
The consumer’s interest and adoption in cryptocurrency vary demographically due to factors such as age, level of education, and urban settlement.
Cameroon is a youthful country, with over two-thirds of the population under the age of 30. This demographic is also tech-savvy and can easily adopt emerging technologies, such as cryptocurrency.
Coupled with age, the level of education also influences crypto adoption. In 2020, the World Bank reported that the adult literacy rate in Cameroon stood at 78.23%. This has contributed to the high usage of cryptocurrencies in recent times.
Cameroonians in urban settlements are more exposed to digital innovations like crypto due to the exposure that comes with their location. According to Worldometer, a global data company, 59% of Cameroonians reside in urban settlements. These are all testaments to the steady growth rate in the adoption of cryptocurrencies in the country.
Source: Wordometer
The Regulatory Complexities and Legal Framework
The regulatory and legal framework for cryptocurrencies in Cameroon is very complex and continuously evolving. Currently, the government, alongside its regulatory bodies, is yet to develop a specific legal framework that encapsulates all the intricacies of the crypto space with regard to Cameroon.
There are also concerns that cryptocurrencies could diminish the country’s foreign exchange reserves. To put this into more context, the official currency of Cameroon is the Central African CFA franc. To transact with cryptocurrencies, they would have to convert it to dollars, which would weaken the CFA franc and strengthen the dollars.
Jean-Clary Otoumou, the Director General of Operations at the Central Bank of Central Africa States (BEAC), made this analysis during the first fintech forum that was held in Douala in January 2024:
"Cryptocurrencies are not yet part of the central bank model. We all need to be aware that every time we buy from abroad, we spend our foreign exchange reserves and weaken our currency. If people think that crypto-assets are a way to preserve their savings, they should not forget that they are converting the CFA franc into the dollar or euro, which constitute our common reserves, thereby weakening our currency."
Jean-Clary, however, noted that negotiations are still ongoing and perhaps the creation of a central bank digital currency would suffice.
Notably, Cameroon is the 11th country with the highest adoption of cryptocurrencies in Africa, with 6.76% of its population adopting crypto, but despite this, the BEAC maintains its opposition to its regulation.
This regulatory gap has created room for many ambiguities. Users and investors do not operate under clear guidelines. This uncertainty opens the door for compliance issues and potential legal challenges and suppresses the growth of the crypto space.
This gap in regulations has made local businesses reluctant to accept cryptocurrencies for day-to-day transactions. It is also worthy of note that this same problem is akin to African countries in the Central African Economic and Monetary Community (CEMAC) and West African Economic and Monetary Union (UEMOA) regions.
Challenges Facing Crypto Adoption in Cameroon
The Regulatory Issues
The regulatory ambiguity and the stand of the BEAC not to enact a specific regulation on cryptocurrencies and other digital assets have not only led to bridging compliance issues and opening a gateway to potential legal challenges but have also opened room for numerous Ponzi schemes within the crypto space in Cameroon.
The Ponzi Scheme Concerns
On August 24, 2023, the Ministry of Finance in Cameroon presented some findings titled “Study on the Development of Cryptocurrency and Activities Related to the Ponzi Scheme in Cameroon.”
A major outcome of this study is the enormous presence of Ponzi-related schemes in the crypto space. Several cryptocurrency companies adopt the Ponzi model, which ends up in losses, building distrust and negating the benefits of crypto in its actual self.
The Ministry criticized the Central Africa Financial Market Supervisory Commission (COSUMAF) for failing to provide clear guidance on digital tokens and assets, which has created opportunities for Ponzi schemes to thrive.
The study further suggested that the regulations should be clearly stated to protect both investors and users, as this would improve transparency.
More emphases were placed on closing down Ponzi schemes, formalizing regulations, and increasing public awareness.
Other Risks and Challenges
Market Volatility: This is a global challenge, and not just specific to Cameroon. The fluctuating nature of digital assets and currencies poses significant risks to investors, especially those still new to the space.
This volatility is usually triggered by global market trends, technological developments, and regulatory news, labeling crypto adoption as a risky investment.
Security Concerns: This is another vital issue in the Cameroonian crypto market. Cyber-attacks such as hacking and phishing attacks are prominent in this space.
Economic Concerns: There are concerns about the degradation of the nation’s financial stability, monetary policy, and the traditional banking sector when cryptocurrencies are fully integrated in Cameroon. The fear, as earlier highlighted by the BEAC, could result in the devaluation of the country’s currency.
Recommended reading: How to Overcome Cryptocurrency Adoption Challenges
The Potential for Cryptocurrency Adoption in Cameroon
Fast transactions and low fee charges, which are some of the benefits of cryptocurrencies, have continued to attract the attention of investors and entrepreneurs in Cameroon.
Education and public awareness efforts by international players, crypto-based startups, and other physical and social media-based groups are on the rise.
In addition to this, some experts are projecting that cryptocurrency could be a solution to one of the major financial problems faced by many Cameroonians, which is limited access to traditional banking services, as 41% of the population reside in rural and remote areas.
Conclusion
The adoption of cryptocurrencies in Cameroon has been slow yet steady and limited to a part of its population. The inability to enact clear regulations governing the use of this emerging technology still hinders its widespread embracement.
However, local startups, educational efforts by home-based and international parties, and the tech-savvy Cameroonian people's growing interest in cryptocurrencies indicate a promising future. This future will depend on establishing a clear regulatory framework, improving infrastructure, and expanding education on why cryptocurrencies are important and the risks involved.
