Africa's innovation story has often been framed by scarcity, from limited funding and infrastructure to constrained access to capital. Yet these challenges have repeatedly sparked breakthrough innovation. Mobile money transformed financial services by enabling the continent to leapfrog traditional banking infrastructure. Blockchain may be the next chapter in that story.

The latest Africa Blockchain Report, published by Crypto Valley Venture Capital (CV VC) in partnership with Absa, presents an interesting paradox. In 2025, Africa recorded its highest-ever share of global blockchain deals, even as its share of global blockchain funding declined significantly. When you look at the data closely, they reveal something important, that innovation on the continent is accelerating even as investment becomes more selective.

According to the report, globally, blockchain venture capital increased by 28.8% to US$15.4 billion, while the number of deals fell sharply as investors concentrated larger amounts of capital into fewer companies. Africa followed a different trajectory. 

Funding declined by 26.6%, yet deal activity remained remarkably resilient, falling by only two transactions year-on-year. African blockchain startups still secured US$90.1 million across 28 deals, while blockchain accounted for 5.3% of all venture funding on the continent, nearly double the global average.

What these figures suggest is that Africa's blockchain ecosystem is maturing in a different way. It is increasingly being shaped by entrepreneurs building solutions for problems they understand intimately. Across the continent, it is being applied in areas such as cross-border payments, access to credit, digital identity, tokenised assets, and financial infrastructure, helping more people participate in the formal economy.

The direction of capital flows offers perhaps the clearest indication of where the sector is headed. Nearly 68% of blockchain funding has been invested in businesses building core financial infrastructure and services, rather than speculative cryptocurrency plays. 

At the same time, almost half of all investment has gone to seed-stage companies, reflecting a strong conviction in the next wave of African innovation. This points to a maturing investment thesis, that investors are supporting enterprises that leverage blockchain to solve fundamental economic challenges, deepen financial inclusion, and create long-term value.

Another encouraging shift is taking place beyond the startup ecosystem. African governments are recognising that innovation flourishes when supported by clear and credible regulation. Fifteen African countries now have formal digital asset or virtual asset frameworks in place, more than double the number recorded just a year earlier. Regulatory certainty is helping create an environment where innovation, investor confidence and consumer protection can evolve together.

Kenya is among the markets helping shape this transition. The progress towards implementing its Virtual Asset Service Providers framework reflects a broader recognition that digital assets are becoming part of the financial landscape rather than remaining at its edges. As governance evolves, so too does confidence in the ecosystem.

Perhaps that is the bigger lesson from this year's report. Africa's greatest competitive advantage has rarely been having the deepest pools of capital. It has been its ability to innovate under constraint, solving problems with creativity, resilience and an acute understanding of local realities. Blockchain is simply the latest chapter in that story.

If this momentum continues, Africa's leadership in blockchain will not be measured by the practical solutions it creates for its people and, increasingly, for the world.

Analysis By Stella Mambo, Director Global Markets Absa Bank Kenya