Stability and Security of Crypto & its Inclusion in Africa | Bankless Africa Newsletter
This is Bankless Africa Newsletter, a newsletter that helps you stay up to date with well-curated news about crypto and Web3 around Africa.
Dear Bankless Africa,
First off, the Eth Safari event that was held from September 18–24 in Nairobi and Kilifi, Kenya, was a huge success, and Bankless Africa was fully represented there by our very own Miss Purple and Mortech. The conference featured a hackathon with substantial prizes and Web3 presentations by local, regional, and worldwide speakers. It was such an amazing time with all the relentless builders out there.
In our editorial this week, we'll look at the motivations behind enthusiasts' want for stability and security in cryptocurrency—in order to prevent centralization, which may potentially bring about the phenomenon's demise—and how this may impact the acceptance of cryptocurrencies in Africa.
In this week's podcast episode, we had Emmanuel Babalola—a pioneer in Nigeria's blockchain landscape, the previous director of Binance Africa, and the CEO of Bundle, a social finance platform—come to discuss the best ways to empower Africans using blockchain technology. He cites Africa's advantage of having a huge population of young people, thereby calling for improved infrastructure to put Africans in a position to develop and keep talent. Try giving it a good listen, and if you liked the episode, please rate it or write a review for us.
It's really intriguing to see the partnership between ChromePay and the Fuse payments platform, which will deliver DID services and a variety of Web3 payment alternatives to Africa.
Kaabọ (welcome).
Contributors: Boluwatife, Oge, Vibrantty, Paulito, angelspeaks, WinVerse, Yofi.
🏴 Inside Bankless Africa
Listen To The Newest Episode Of The Bankless Africa Podcast
Like, Share, Retweet, and Subscribe to our podcast.
Stability and Security of Crypto & Its Inclusion in Africa
Author: Boluwatife
We all know or even love at least one or two different assets in the cryptocurrency space. Many of us have fallen in love with the diversity, decentralization, and freedom many of the assets can provide for a lot of us. Cryptocurrency uses cryptography to verify transactions, execute them and store the resultant records across the network rather than at a central location. This has enabled many people to hold onto their wealth, especially in Africa, where it previously would not have been possible. Although cryptocurrency has many benefits, it also has a lot of risks. The risks are often associated with the hope that a platform or validator will live up to their end of the bargain, especially when you are relatively new to the space. Many people have lost their assets to scammers through a myriad of sinister methods.
More recently, talks are being held about what impact centralization, stability - or lack thereof - and crypto security could potentially have on the downfall of the entire phenomenon, along with how it could affect the economies and individuals that are dependent on it.
In this article, we will explore why enthusiasts are clamouring for the stability of cryptocurrency and how the stability and security of crypto inadvertently affect the inclusion of cryptocurrency in Africa.
Clamoring for the Stability of Cryptocurrency
Cryptocurrency's Volatility
One way to analyze the ups and downs of an asset's value over time is to look at its volatility. Investing in a volatile asset holds a much higher risk than one considered not to be volatile. Although the asset could experience higher levels of gain in less time, the reverse could as well happen. It could experience extremely high loss levels in a shorter period than that of a less volatile asset.
Lack of Regulation
From the very beginning, central banks and financial analysts have been antagonists of this part of crypto, and although crypto activists might look at it as a way for financial institutions to maintain what they consider to be their turf, transactions done on blockchain networks are very lightly regulated or completely left out of regulatory frameworks at present.
Financial Stability and Lack of Safe Innovation
Cryptocurrency assets open up a wide range of possibilities, particularly with fast and simple money transfers, alternative banking, and other financial options. It allows people in the "unbanked" regions to access "banking" or financial services. The entirety of the cryptocurrency industry relies on the security and privacy of cryptographic protocols. Yet, with every possible upside, there is also a potential for difficulty or danger. Regulatory information gaps exist due to the anonymity of crypto assets, which can be exploited for illicit purposes, including money laundering and terrorism financing. Authorities may be able to track down illegal dealings, but they might not be able to determine who was involved. A significant lack of transparency and oversight still poses hazards to consumers. For instance, about 11,000 tokens out of more than 16,000 have been listed on exchanges. This means that most of those tokens were either used for test runs at the expense of the users or it was outright fraud. Although the boom of cryptocurrency and its value, when measured against global security and asset, is insignificant and cannot produce an accurate measurement as to how it affects the global economy, we should not forget the bank crisis of 2007-2008, which was caused by the low-interest rates, cheap lending, little regulation, and toxic subprime mortgages also had the same characteristics.
Financial Inclusion of Cryptocurrency Across Africa
Sub-Saharan Africa is becoming more digital and urban, though it still only receives 2% of the total value of all cryptocurrencies. However, the rapid expansion of cryptocurrencies has the potential to completely revolutionize the continent's financing system. Cryptocurrency platforms help balance the economic playing field and offer financing options to underserved areas since they circumvent traditional financial institutions by delivering autonomous peer-to-peer lending services. Consequently, cryptocurrencies are ideally suited to address a variety of economic issues confronted by the region, from filling funding gaps in the Micro Small and Medium Enterprise (MSME) sector to easing the transmission of remittances. A lot of problems would be caused by the stability, centralization, and pinning down of crypto in many ways. This:
Leaves citizens at the hands of traditional and ineffective financial institutions. In many parts of Africa, the old financial infrastructure is very volatile and poorly governed. Due to its decentralized digital nature, blockchain financial technology paves the way for new kinds of financial infrastructures that can improve fiscal sustainability and governance.
Allows for colonial control of financial institutions and funds. As discussed in Issue 16 of the Bankless Africa newsletter, if financial instruments such as crypto are given to the government of countries that are still under modern colonization for them to be regulated or stabilized, a way will be found to curb the freedom of funds. Consequently, this throws these countries and their people back into corrupt and inflationary monetary systems.
As discussed, it can be seen that although cryptocurrency has its issues and challenges and will still have more going forward, it is something that should be nurtured and developed because of the advancement it has brought to the continent. Rather than casting it aside or leaving it so unregulated, policy actions like regulating and supervising data gaps to stay abreast of crypto industry changes and risks should be taken. Also, because crypto assets are traded globally, countries must collaborate to avoid regulatory arbitrage and improve monitoring and enforcement.
📰 News & Opinion In and Around Africa
Jack Dorsey to speak at maiden Africa Bitcoin Conference
Author: Vanguard
At the maiden Africa Bitcoin Conference (ABC) in Accra, Ghana, Jack Dorsey, a prominent Bitcoin specialist, will be among other participants in examining the future of Bitcoin. Dorsey will be the Bitcoin trader at the conference with the highest net worth.
Keynote speeches, presentations, panel discussions, workshops, exhibitions, hackathons, and other interesting events will be part of the conference, which runs from December 5 to 7, 2022.
Leading innovators and thought leaders in the global industry will congregate at the Africa Bitcoin Conference, fostering an environment conducive to education, networking, and collaboration for all.
Kenya, and Nigeria drop out of the top 10 countries on the 2022 global crypto adoption index
Author: Temitope Akintade
The top ten list no longer includes Nigeria, the largest cryptocurrency market in Africa. Presently, Kenya is ranked 19th, and Morocco has entered the top 20. Perhaps other nations have improved their game or Africans are less interested in cryptocurrencies than they were a year ago.
Emerging markets dominate Global Crypto Adoption Index results. The top 20 nations include 10 lower middle-income, 8 higher middle-income, and 2 high-income nations. The market's declining prices, according to the report, have not dimmed new users' enthusiasm.
The 2021 index put a lot of emphasis on how common people were adopting cryptocurrencies and how they were using them for personal savings and transactions. Nigeria, for example, performs exceptionally well in grassroots adoption thanks to its thriving P2P economy, but it falls short in other categories, such as institutional adoption, centralized retail transactions, and DeFi.
Cryptocurrency is happening; let's not sit on the fence – Ursula
Author: Vincent Ashitey
Ursula Owusu-Ekuful, the current minister of communications and digitalization of Ghana, implores the people to take action. She urges them to no longer sit on the fence but instead finds ways to use cryptocurrency to better their economy.
Though she recognizes the inauguration of the eCedi by the Bank of Ghana, she acknowledges the fact that cryptocurrency is fast gaining recognition and legitimacy.
With Ghana having one of the continent's most effective financial technologies (Fintech), transactions have been made easy, safe and transparent. She believes the industry can develop continental cards that'll help reduce fees and finance development.
Pan-African Crypto Exchange, Yellow Card Secures $40M in Series B Funding Round.
Author: Pr Newswire
The Pan-African cryptocurrency exchange Yellow Card Financial has announced the completion of its $40M Series B fundraising. Valar Ventures, Sozo Ventures, Castle Island Ventures, DG Daiwa Ventures, The Raba Partnership, and other investors joined Polychain Capital in leading the round.
The money will help the business expand successfully across the continent, create cutting-edge new products, and strengthen critical alliances.
We are awestruck by how they effortlessly adapt to the distinct prospects and requirements of the many African markets. Yellow Card is the continent's top executing team, according to London-based investment firm Polychain Capital. Through different initiatives across the continent's marketplaces, it seeks to achieve financial inclusion for all.
Payments platform Fuse integrates ChromePay to bring DID services to Africa.
Author: Sam Bourgi
In an effort to increase financial inclusion across the continent of Africa, Web3 payments platform Fuse has teamed up with ChromePay, an identity-based payment solution, to introduce a new line of payment products.
The collaboration is centered on ChromePay's decentralized identification service or DID. According to the firms, this service will allow millions of Africans to engage in the Web3 economy.
ChromePay will use the Fuse blockchain to provide consumers with a range of Web3 payment options that are driven by its DID solution.
🥷🏾 Airdrops Hunter
📚 Learning Centre
5 Steps to Starting Your Crypto Career
Author: William M. Peaster
Even with the bear market, there are many job prospects in the cryptocurrency industry. How you leap is a matter of personal choice, but Williams came up with a straightforward method that everyone can use. Explore the 5 steps to launching your crypto career rapidly!
😂 Meme Humour
Thank you for subscribing to the Bankless Africa Newsletter.
Follow Bankless Africa: Website, Twitter, Instagram, YouTube, Telegram, and LinkedIn.
Was this email forwarded to you? Subscribe on Substack.