Blockchain and Africa
By Jamesa Brown
The idea of a thriving blockchain industry in African nations has been surfacing since 2015. So far since January of 2018, these flourishing groundbreakers have become the topic of choice for large-scale blockchain companies and media outlets. There are optimists in the continent who regard this growth as a necessary shift to stable economies and politics, while others express suspicion of what could come from the venture into bitcoin, ethereum, and other cryptocurrencies.
One optimistic company is Wala, a South African startup that has provided access to “dala” tokens through their phone apps and a sleek, user-friendly website. According to the organization’s homepage, the system they employ is a zero-fee shift from traditional money transferring systems, which require high fees and make traditional banks inaccessible to a large number of Africans.
When interviewed by Coindesk.com author Leigh Cuen in July, Wala CEO Tricia Martinez expressed that his company has a keen interest in cryptocurrency because it “is what is going to drive a financial revolution in Africa”. One can assess why such a revolution may occur due to the example that is set by the Wala company when learning that dala can be earned and used to pay school fees, utility bills, or purchase phone airtime and data in Uganda, Zimbabwe, Nigeria, Zambia, Botswana, Namibia, Tanzania, Malawi, and South Africa.
Other startups have caught onto this useful aspect of blockchain technology in purchasing daily necessities. BitHub Africa, a Kenya-based blockchain accelerator for local startups, has opened the door for many Africans to embrace new routes for cross-border money transfers, providing more access to energy, loans, and credit.
The African Locals
The Inter Press Service News Agency has predicted that 725 million Africans will be mobile phone subscribers. With this in mind, there are more Africans approaching bitcoin and other cryptocurrencies with an open and optimistic mind. Peace Akware, a Ugandan millennial, told IPS reporters that he checks his Bitcoin account “every day [on my mobile phone] and any chance I get. Any minute, hour, anytime as often as I can”. This may seem like an obsession to some, but one should keep in mind the opportunities that the previously mentioned entrepreneurs noted about political and cross-border money transfering possibilities within blockchain technology.
Another attributing factor to such optimism is the lack of regulation that the African government has put onto its inhabitants. The Nigerian central bank indicated in July that “rather than simply not wanting to, governments may be powerless to regulate cryptocurrency”. The Nigerian apex bank announced shortly after the Nigerian central bank that it could not control cryptocurrencies “just the same way no one is going to control or regulate the internet.” This lack of regulation, as one can imagine, appeals to the many locals who face the recent 12% increase in inflation. Africans who lack access to banks due to this inflation could turn to these cryptocurrencies or create their own tokens for multipurpose usage, as Wala has accomplished.
The Negative Side
With all of these details in mind, one may wonder if there are Africans whose perspective on cryptocurrency isn’t as hopeful as these locals and tech-entrepreneurs. Despite many African lawmakers and bank associates deciding not to attempt regulation of it, officials in Ecuador, Bangladesh, and Kyrgyzstan show their refusal to accept it by banning Bitcoins and other initial coin offerings (ICOs) from being used based on its perceived risks.
This could seem pointless in light of the lack of regulation that cryptocurrencies require, but since their inception, many criminals have taken advantage of their unregulated nature by transferring them without issue. In 2011, the U.S. Justice Department seized criminals who were linked to $48 million worth of illegal contrabands and over $130 million worth of Bitcoin transfers to obtain them.
The Point of No Return
Despite the risks that are involved within cryptocurrency ventures, the majority of interviewed African business owners and users of Wala and the Blockchain Academy agree that the risk is worth earning more money, even in the short term. The vice president of marketing for ICOWatchlist.com Emmanuel Tokunbo Darko stated, “Truth be told, Africa needs blockchain technology and its resultant cryptocurrencies more than any part of the world.”
This sentiment appears to be shared by too many African citizens for blockchain technology to be ignored or feared. Its decentralized nature has impressed many within Africa, and with good reason. It has expanded into aiding various organizations, and as a result, has led to more African children attending schools with consistent resources for food, clothing, and shelter. Regardless of the doubt that clouds the blockchain industries and startups that are burgeoning into functioning companies, financial markets have improved for African people. So far, this continent is benefiting from everything that cryptocurrencies have to offer.