Africa’s craving for Crypto
Digital this, disruption that. These terms have become so linguistically ubiquitous one easily forgets the genuine curiosity once associated with these concepts when first introduced. Now they’re part of our everyday vernacular much like the iPhone, bitcoins and seasonal-flavored Starbucks coffee. While digital innovations continue to redefine every aspect of our lives, the term ‘disruption’ has become – in author Kevin Roose’s words – “meaningless rhetoric” in an era where everything around us is disruptive.
These terms, believe it or not, have fused into an exciting development that is fundamentally transforming the way Africans interact financially. Cryptocurrency – essentially cryptographic digital currency – is being embraced by sub-Saharan nations stretching as far as Ghana, Kenya, Nigeria, Senegal, South Africa, Tanzania, and Uganda.
Having recently watched cinematographer Christopher Cannucciari’s documentary “Banking on Bitcoin”, and listening to countless opinions about the untapped potential of open-source blockchain technology, the idea of a digitally interconnected P2P (‘peer-to-peer’ lending) continent free of financial bureaucracy seems exceedingly plausible – from an African perspective at least.
0s and 1s aside, with all the recent regulatory controversy surrounding the Bitcoin movement, not to mention darknet market operator Ross Ulbricht’s anonymous Silk Road website, which experienced the wrath of the Federal Bureau of Investigation’s legal rigour back in 2013, it is understandable why people are divided about the unregulated nature of blockchain technology. While trading democratically in a system free of financial regulation has obvious benefits (such as pricing efficiency, auditability and traceability), facilitating transactions without institutionalized regulatory restrictions can result in money laundering with vast societal ramifications. Just imagine the Wild West lawlessness that an aspiring drug trafficker could enact through further financial deregulation and trading anonymity – as a recent article published by The Economist highlights the extent of this dystopian outcome. As it stands, this debate has cast doubt over the efficacy of cryptomarkets and remains a prevailing concern for consumers and investors alike.
So why does Africa feature so prominently in this blockchain equation? Why is it so well-equipped to leapfrog the bureaucratic deficiencies that developed economies are experiencing? The answer to this lies in the continent’s widely publicised consumer-centric, dynamically-driven and mobile-manic marketplace. Where the developed world is struggling to maintain its archaic banking traditions and rigid economics with futuristic blockchain functionality, Africa is a blank slate from which to code this innovation into feasible democratic transactions.
Take a look at M-Pesa, Africa’s pioneering mobile phone-based money platform. The FinTech service has practically changed the GDP of Kenya – highlighting the economic potential of cryptofinance in emerging markets and paving the way for upcoming blockchain innovations such as BitPesa and Bitwala. In West Africa, Senegal plans to join Tunisia in launching its own national blockchain currency to be aligned with the region’s soft currency known as the eCFA. This impending digital currency adoption across French-speaking African countries has the potential to enhance digital payment platform interoperability and facilitate cross-border transactions – essentially paving the way for governmental support in fostering financial inclusion and intraregional trading.
Equally intriguing, Uganda’s Senior Advisor to the President, Gertrude Njuba, has co-founded an initiative by the name of Blockchain Africa focused on developing the country’s land registry process, while Ghana’s Bitland initiative aims to “unlock land capital through the democratization of real property ownership” by combining automation with blockchain technology. Local enablers such as BitHub.Africa and Blockchain Academy are also providing another important avenue from which aspiring African entrepreneurs and FinTech experts are collectively synergising to build upon and authenticate the veracity of this crypto-manic phenomenon. Commercial accelerators and training course providers such as these will be crucial in driving adoption and unleashing the true potential of budding blockchain innovations.
Whether these digitally intricate innovations can stand the test of time, leapfrog the developed world’s erratically-evolving learning curve and revolutionise Africa’s e-commerce space is up to government-backed deregulation and commercial enablers such as Blockchain Africa, BitHub.Africa and Blockchain Academy. With exciting FinTech initiatives sprouting up all over Africa, there is little doubt that demand for blockchain technology will abound. ‘Digital this, disruption that’ is the here and now.
Be sure to check out the following upcoming events in 2018 on cryptofinance:
Bitcoin Events hosts its 4th annual conference bringing together experts to discuss “blockchain and cryptocurrency use cases, the regulatory environment, technology hurdles and opportunities in innovation and disruption that can be leveraged using this technology”.
CFC’18 will hold the first global crypto finance conference ahead of next year’s World Economic Forum. The 3-day conference will bring together both “private and institutional investors and the leading providers of the crypto & blockchain universe”.
By Daniel Sievwright, Switzerland