EmaSwati are actively involved in the cryptocurrency market, well, this is according to the Eswatini Baseline Cryptocurrency Survey 2023 conducted by the Eswatini Economic Policy Analysis and Research Centre (ESEPARC).
The study was commissioned by the Central Bank of Eswatini (CBE) and involved both financial service providers (FSPs) and the general public to gain insights into their cryptocurrency awareness, ownership, and anticipated future involvement.
The purpose of the survey was to estimate the size of the cryptocurrency market in the country and characterize the drivers and public perceptions on the matter to inform policy decisions.
The objectives of the survey were to understand attitudes towards cryptocurrency and motivations for holding cryptocurrency, understand how EmaSwati purchase and engage with cryptocurrency and learn from their experiences with cryptocurrency; estimate the size of the cryptocurrency market in Eswatini, and evaluate the prevalence of regulatory risks inherent in Eswatini’s population participating in the cryptocurrency market.
The study adopted a convenience sampling method, reaching 4,561 respondents across the different regions of Eswatini. A convenience sample method was used for FSPs, thus only 34 companies were interviewed, representing the bank and non-bank financial sector.
According to the study, a total of 3,938 cryptocurrency transactions were conducted from January 2022 to December 2022. Predominantly, these transactions, constituting 90.5%, involved the outward flow of funds from the country through bank transfers and direct cash deposits into South African-based cryptocurrency exchanges like Altcoin Trader, LUNO, and VALR. Conversely, the remaining 9.5% of transactions witnessed cryptocurrency funds moving from South African-based exchanges to Eswatini.
“Upon analyzing the value of these transactions, further insights come to light. The cumulative value of funds exiting the country via cryptocurrency exchanges in 2022 tallied up to E21, 261,647.54. In contrast, the value of funds entering the country via these exchanges amounted to a notably lower figure of E1, 022,016.59.”
“This discrepancy underscores a substantial outflow of funds from Eswatini to South African-based cryptocurrency exchanges. Predominantly, Altcoin Trader, with a value of E19, 080,515.96, took the lead in traded funds, while LUNO facilitated trades amounting to E2, 601,063.86. By the end of 2022, the collective value of funds traded by cryptocurrency holders in Eswatini had surged to E22, 283,664.13,” notes the Study.
Furthermore, the Baseline Study reveals that there were more male participants (57.8%) compared to female participants (42.4%). The youth (18-34 years old) accounted for 69.4% of the total respondents. Approximately half (50.0%) of the survey participants possessed a tertiary level of education. In terms of occupation, 47.0% were in full-time employment, 17.8% were self-employed, and 12.3% were students. A majority (63.8%) of the respondents indicated an income of less than E10,000.00
In terms of cryptocurrency ownership based on age and education status, 14.4% of respondents who owned cryptocurrencies had a tertiary-level education, while 6.0% of respondents who owned cryptocurrencies had a secondary/ high school education. Within the age demographic, 11.3% of respondents who owned cryptocurrencies were aged between 25–34 years old, while 4.5% were between 35-44 years old.
Regarding cryptocurrency ownership by income bracket, individuals earning a monthly income of E20,000.00 or less (16.6%) emerged as the primary cryptocurrency holders. This suggests that, in Eswatini, those with lower incomes were more deeply involved in cryptocurrencies, potentially driven by the aspiration for quick financial gains. The analysis further underscores that in Eswatini, there was a significant interest in cryptocurrencies among low-income individuals, while stable middle-income earners exhibited comparatively lesser participation in the market.
The survey results revealed various motives behind investing in cryptocurrencies. About 62% of the respondents ranked “fear of missing out” as number one, while 59% became cryptocurrency holders to make quick money.
Other noteworthy reasons highlighted by respondents included investing in cryptocurrencies “just for fun or gambling” (53%), employing them for domestic or cross-border money transfers (52%), diversifying their investment portfolio (51%), and endorsing initiatives that leverage blockchain technology (50%). The findings unveiled that the fear of missing out ranked as the primary reason for respondents’ cryptocurrency investments. This fear was also linked to the apprehension of regret, where individuals were concerned about potentially overlooking an opportunity to generate profits. The second most prevalent motive among participants was the desire to quickly accumulate wealth. However, only a small percentage indicated using cryptocurrency as a method of payment for online transactions.
According to the Baseline Study, 43.5% of respondents owned Bitcoin. The Survey states that Bitcoin typically springs to mind first when people contemplate cryptocurrency. Ethereum emerged as the second most owned cryptocurrency among the respondents, accounting for 10.9%.
A similar trend was observed in the US, where Bitcoin maintained its status as the most popular cryptocurrency by a substantial margin (75%), followed by Ethereum at 49%. Moreover, 9.2% of respondents indicated ownership of Binance USD, while 8% reported possessing USD Coin. Other cryptocurrencies (11%) owned by respondents included Shiba Inu, Berry, Weownomy (WEOWNS), Dascoin, Litecoin, and Tron (TRX).