Blockchain technology is maturing on the African continent as use cases beyond cryptocurrency gain traction – in areas such as digital identity, payments, agriculture and data management.

This is according to the Africa Blockchain Report 2024, compiled by Absa Corporate and Investment Banking (CIB) in collaboration with Crypto Valley Venture Capital (CV VC).

According Brenton Naicker, principal and head of growth for Africa at CV VC, blockchain adoption in Nigeria, South Africa, Kenya, Ghana and the Seychelles has surged, coinciding with higher rates of venture capital investments into blockchain-based start-ups across the continent.

“We have seen exponential growth in key markets across Africa, and the technology is being adopted at the corporate, government and institutional level across the continent,” Naicker said at a media event in Johannesburg on Wednesday.

“We have seen the industry develop tremendously to where there is now room for a multifaceted approach towards regulating it. As we continue to build the foundational layer out, the ability to build even more use cases opens up as well.”

The Absa blockchain report provides a data-driven analysis of Africa’s blockchain venture landscape, drawing comparisons with global blockchain trends and local funding dynamics. It identifies the sectors that captured investor interest and analyses geographic patterns of capital deployment.

Non-financial use cases

The 2024 edition found that blockchain start-ups attracted 7% of all African venture capital funding at US$122.5-million, with deal activity growing 15% to reach 30 transactions. Naicker said this excludes instances where blockchain infrastructure is used as part of a company’s technology stack but not publicly disclosed.

Seed rounds emerged as the most dominant category, attracting 34% of funding and 12 deals, up from only six in 2023. According to the report, this indicates investor confidence in early-stage products targeting real-world use cases is strengthening.

Read: Lesetja Kganyago scoffs at bitcoin as strategic reserve

A sectoral analysis shows that centralised blockchain financial services took the lion’s share (41%) of investment with $49.6-million across 10 deals. Use cases in this category focused on blockchain use in neo-banking, cross-border remittance and stablecoin integrations that meet compliance and enterprise needs.

Decentralised finance attracted 30% of total investment with $36.3-million across seven deals. Start-ups in this category focused on permissionless lending, swops and decentralised foreign exchange systems. Data management and verification ventures captured $24.5-million (20%), supporting ESG (environment, social, governance)-compliant traceability and tokenised real-world assets.

Some of the non-financial sector use cases of blockchain technology emerging across the continent include blockchain networks for smart contracts, gaming, data management and developer tools.

“The real innovation of the internet was its ability to transfer data across the world; its weakness is that it is not a good medium for transferring value. Blockchain is the first internet-native value transfer mechanism,” said Naicker.

Blockchain’s potential to solve real-world problems in Africa is being held back by regulatory resistance to digital assets in many countries. According to the report, 35 African nations remain uncertain on digital asset regulation. Only seven countries have made the technology legal, with another seven effectively banning it. Five countries have imposed an explicit ban on digital assets.

According to Rob Downes, head of digital assets at Absa CIB, Nigeria’s progressive stance towards regulating cryptocurrencies has helped drive financial inclusion.

“Nigeria stands out as a global leader in cryptocurrency adoption, ranking second globally due to its currency volatility and significant unbanked population. This vibrant market has attracted substantial investment in web3. Peer-to-peer trading has gained traction among Nigerian users and continues to thrive,” said Downes.

Although blockchain use cases outside financial services are growing, Downes said the technology’s capability within the financial sector presents opportunities that are yet to be capitalised on. An example of this is blockchain technology’s enhanced transaction-tracing capabilities, from which financial institutions and regulators could benefit in their efforts to fight the illicit flow of funds.

Read: Keep bitcoin away from South Africa’s strategic reserve: Helen Zille

“The traceability of flows of digital assets through the blockchain is superior to what you can do today in traditional finance. There is probably work to do in terms of what to do when suspicious activity is identified, because one advantage of the blockchain is that funds move very quickly, so by the time you have a court order, the funds have moved a few times, making the freezing of assets a challenge,” said Downes. – © 2025 NewsCentral Media

Get breaking news from TechCentral on WhatsApp. Sign up here.