Record funding for blockchain projects in 2022, thanks to Africa
Despite the crisis year 2022, blockchain projects have raised more money than ever.
Despite the crisis year 2022, blockchain projects have raised more money than ever before. A new report shows it.
The global economy didn’t have a good year in 2022. War, inflation, rising rates, supply-chain woes, and the aftershocks of the COVID-19 pandemic created turbulence in the financial markets, some of which was sharp. The crypto sector also faced headwinds. The Terra ecosystem collapse, mass layoffs, waves of bankruptcies, and, last but not least, the fall of FTX weighed on prices and sent the industry into a new ice age.
Despite expectations, interest in blockchain technology stayed strong, especially from financiers. That’s the takeaway from a new report from venture-capital firm "CV VC." The report finds blockchain projects pulled $26.8 billion in funding rounds. That topped the previous record year, 2021, by 4%. About half of the deals closed in the U.S., followed by Asia at 26%. Europe came in third at 21%.
Blockchain funding booms in Africa
Blockchain projects on the continent raised a total of $474 million last year — up 429%. However, funding is concentrated in two countries: South Africa and the Seychelles island group. Together they account for 81% of the rounds. Regulation is certainly helping the locations. Kenya, Nigeria, and Liberia follow. The latter cracked the top five thanks to a one-off funding round for the blockchain platform Jambo.
Three companies stand out in the report: their funding accounts for a total of 65% of the overall volume. The Seychelles-registered crypto exchange KuCoin alone accounts for about a third of the funds ($160 million). Then comes payments company MFS Africa ($100 million) and Bitcoin exchange VALR ($50 million).
Crypto adoption on the rise
The report highlights the rapid growth of the crypto and blockchain sector across Africa. On adoption, there’s no market where growth and demand for inclusive and accessible financial services are stronger than in Africa, says Ian Putter, regional director of Standard Bank's Blockchain Research Institute Africa.
Populations are using cryptocurrencies to hedge against currency devaluations between African nations. In the Central African Republic, Bitcoin is now legal tender.
Because adoption is surging, observers like the IMF are calling for better regulation of the sector. The CVVC report shows crypto is currently legal in five countries. The majority allow Bitcoin and the rest of the crypto market only partly or fully. In nine countries, the legal status remains unclear.
