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Nigerian Crypto Association Asks Government for Clear Guidelines

The Electronic Payment Practitioners Association of Nigeria (E-PPAN) is asking government regulators in the country for clearer guidelines to drive the industry forward.

This follows reports, including a statement by E-PPAN, that there is a growing possibility of fintech businesses offering blockchain services being driven overseas unless both the Nigerian government and the Central Bank of Nigeria can offer clarification on its view towards cryptocurrency.

A new Nigerian blockchain hub was announced by the government in August in conjunction with UK blockchain firm Coinfirm. The resulting launch of the Africa Blockchain Lab promises to offer financial inclusion to many Nigerians outside of the country’s financial system and also to attract new startups as part of the country’s drive to support the adoption of blockchain and cryptocurrency technologies in the continent.

However, the Bitcoin Exchange Guide claims that Central Bank governor Godwin Emifele has done little to encourage the growth of cryptocurrency; investors continue to be reluctant owing to the government’s lack of guidelines. Despite the launching of the Africa Blockchain Lab by state-backed KAD ICT Hub, cryptocurrency still struggles to receive recognition in Nigeria due to its continued links to criminal activities by authorities.

“Investments in blockchain-based financial services such as cryptocurrency are today going to Rwanda and Malta, which have provided regulatory frameworks that guide operators of the technology,” claims Ade Atobatele, founder of Gboza Gboza Technology Ltd, and member of E-PPAN.

This hasn’t stopped PundiX setting its sights on Nigeria, recently introducing Point of Sale (POS) machines which enable users to pay in Bitcoin and Ether along with the country’s local currency, the Naira. Nigeria certainly has the potential to accommodate such facilities with Africa’s largest contingent of Bitcoin holders and a population of 185 million, representing the continent’s largest population of potential users and investors. Localbitcoins is reported to have seen a trading volume of USD 260 million this year to date.

Nigeria should be looking to overseas for regulation, according to E-PPAN member Michael Kiberu, calling for regulators to look to countries such as Uganda, Switzerland, Kenya, and Japan, where cryptocurrency guidelines are clear and operate with legal status, while creating a healthy flow of capital into the financial sector.

 

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Africa and the Middle East: Crypto and Blockchain News Roundup, 2nd to 8th November 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

South Africa

South Africans turn to crypto to avoid inflation: More and more South Africans are starting to own cryptocurrencies as a means to avoid the volatility of the local fiat currency, the rand, which has fallen as much as 20% against the USD last year alone.

According to a survey by Luno, a local cryptocurrency platform, more than 29% of the people surveyed owned cryptocurrencies in the country and almost 70% have heard about virtual currencies. While trading is not commonplace, it is because most see cryptocurrencies are a way to hedge against inflation and instability of the rand.

While cryptocurrency ownership numbers are quite high, only 23% stated that they had used cryptocurrencies for transactions and only 12% had used them for cash transfers to friends and family. This shows that the ownership numbers have not translated to actual market penetration but only act as a buffer against inflation.

Ghana

Local entrepreneur calls Bank of Ghana’s attitude towards crypto “worrying”: National Banking regulator Bank of Ghana’s attitude towards cryptocurrency transactions has been termed as negative and worrying by a local blockchain entrepreneur. He made these comments after the bank repeatedly stated that blockchain is unreliable and people should stop using it.

According to Eric O A Annan, blockchain innovator and entrepreneur of KuBitX, the regulator should come up with necessary regulations to mainstream the industry rather than having a defensive posture. He argues that millions of transactions are taking place through cryptocurrencies and blockchain daily.

He made these comments during the first Blockchain Ghana conference in Accra earlier this week. The innovator also urged the central bank to adopt blockchain technology for efficiency and transparency.

Uganda

Binance signs up 40,000 Ugandans in opening week: Binance got as many as 40,000 sign ups in Uganda within its first week of opening in the country. The massive response indicates that Ugandans are ready to invest in cryptocurrencies by the thousands as it presents viable alternatives to the public.

There are only two cryptocurrencies available for trading right now on Binance Uganda: Bitcoin and Ether. The country may see their use in the microfinance sector as more than 70% of Ugandans remain unbanked.

Israel

Bank of Israel decides against state crypto: The Bank of Israel has official decided against issuing a state cryptocurrency in the country after a government study group recommended against it.

The study group was formed by the governor of the state bank and included members from different government departments, banking community and blockchain industry. The move is in line with the attitude of many other central banks towards state cryptocurrencies.

Abu Dhabi

Securities exchange releases blockchain paper: The Abu Dhabi Securities Exchange (ADX) has published a thought paper on cryptocurrencies and blockchain infrastructure digital assets, according to state news agency WAM.

According to WAM, the paper discusses the required technical and operational criteria for setting up digital assets as well as supporting financial institutions though cryptocurrency assets. The document itself was prepared with the help of Central Securities Depositories under the supervision of International Securities Services Association.

UAE is looking at blockchain technology and cryptocurrencies with excitement and now the national regulator believes that ICOs will be allowed by 2019 in the UAE market for investments. ICO regulations are currently being drafted by the Abu Dhabi and Dubai stock markets.

 

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New Pan-African Framework Launched to Boost Crypto Trade Across Diaspora

This week saw the launch of the African Digital Asset Framework (ADAF), a pan-African organization aimed at promoting cryptocurrency-based trade across the continent and amongst the African diaspora.

The new body will support another important programme, the Single African Digital Market initiative, which also promotes the use of new technology in the digitized economy. The ADAF has some strong backing on the continent of Africa, backed by ambassadors of the African Union and its member states and the African Development Bank (AfDB).

With African countries accounting for only 11 percent of the continent’s collective gross domestic product, the initial move of the new body was to examine a research paper which outlines the significance of digital currencies such as Bitcoin becoming the backbone of a borderless digital economy across the continent and around the globe. Co-founder Felix Macharia said ADAF explains the framework’s raison d’etre:

“ADAF was formed by organizations in the digital asset space who looked to harmonize standards and regulation in the space… Digital assets know no borders. If Africa is to benefit from the full potential of distributed ledger technologies and even from agreements around free trade, we must start drafting standards, legislation and regulations that are in line with this new reality.”

The ADAF certainly doesn’t come from humble beginnings as it originated as an idea on Nelson Mandela International Day at the United Nations in July. The pan-African initiative now carries significant weight including amongst other heavyweights, the former president of Mauritius Dr. Ameenah Gurib-Fakim and Queen Diambi Kabatusuila Tshiyoyo Muata of DRC’s Kasai Kingdom.

The platform will display policy proposals for different commercial sectors, data on sustainable development objectives which will include input from community members. Also, there will be a multi-lingual interface for all contributors to put forward suggestions for changes to current self -regulation, and solutions to current problems in the African cryptocurrency space.

In an online statement the ADAF suggested:

“Digital assets create a secure way for people to trade, peer-to-peer, across borders, enabling people to securely access and transfer items like currency, identities, land titles and votes over the internet,” adding that the platform had been implemented for the purpose of “encouraging digital asset ownership and value exchange in digital economies between Africans and its diaspora.”

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Binance Off To Flying Start In Uganda With 40,000 Users In First Week

Binance has stepped into Uganda with a flourish as 40,000 new users signed up to the exchange in the hope of bypassing the Ugandan Shilling (UGX).

Many citizens of African countries are unbanked, either by choice or due to complicated prohibitive rules which make it hard to open an account. Uganda is no different, with a recorded 3/4 of the population without any form of conventional banking.

This is Binance’s first fiat-crypto exchange with UGX, the primary fiat currency and comes less than a month after the company acquired an EUR bank account in Malta, with more exchanges to come, according to CEO Changpeng Zhao. Binance’s enigmatic boss clearly realises the potential of Africa as a new investment hub due to the unbanked nature of much of its population:

“Uganda is a really interesting situation, only 11% of the population has bank accounts. It’s both a challenge and an opportunity. So it may be easier to adopt cryptocurrency as a form of currency instead of trying to push for bank adoption”.

Africans have been clever in dealing with financial barriers, and using cryptocurrency is increasingly becoming a go-to way in order to sidestep banking restrictions or weak state currencies. Corruption is also another factor never far from the surface in some African economies often necessitating the need for a clever approach by locals in order to conduct their everyday business.

Recently, neigbouring Kenyan Distributed Ledgers and Artificial Intelligence task force chairman Bitange Ndemo said that that government should consider tokenizing the economy to deal with “increasing” rates of corruption and uncertainties-such is Africa’s increasing faith in crypto ahead of local fiat currencies.

Wei Zhou, Binance’s chief financial officer, suggested that one reason for the exchange’s surge of clientele in the first week is the fact that it is so easy for Uganda’s unbanked to access the system, commenting, “They [users] just have to have money within the mobile payment system. They don’t have to have bank accounts.”

The country’s president, Yoweri Museveni, said recently that he welcomed and embraced blockchain technology in Uganda since it provides full transparency, and added that he was aware how businesses were being negatively impacted by what he called “secrets and deceit.”

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Paxful P2P Claims Africa Has the Largest Bitcoin Trade Volume

Cryptocurrency is finding its feet in Africa, as US-based P2P crypto marketplace Paxful is finding out this year with transaction numbers rocketing.

Paxful Inc. operates a peer-to-peer payment logistics platform which focuses on buying and selling of bitcoins. The company has just returned with impressive numbers after its leadership team visited Africa to assess its successes there.

The trip to South Africa, Nigeria and Ghana revealed that Africans are turning to Bitcoin in ever increasing numbers with Paxful’s transactions alone standing at R948 million ($66 million) per month. Over the past year, Paxful transactions from SA increased by 25%, by 60% in Nigeria and by up to 100% in other parts of the continent. For Africa as a whole, Paxful has seen a 225% increase in users in the last 12 months.

The South African economy is struggling but Bitcoin continues to gain popularity with investors, writes bitcoinist.com. In April of this year, the South African Central Reserve Bank (SARB) announced moves towards overseeing cryptocurrency and fintech developments in the country, suggesting rather than taking prohibitive regulatory measures, it would introduce an investigative unit which would promote growth and innovation. The South African Revenue Service also announced a new framework for cryptocurrency taxes.

As a result, cryptocurrency adoption has started growing in the region. AsiaCrypto puts Bitcoin’s continued popularity in South Africa down to the fact that some of the country’s larger asset holders are moving into crypto. “Bitcoin” is now reported to be the trending term on SA Google search.

In South Africa, Paxful is not alone, with Luno recently announcing that it now has two million users spanning 40 countries. Another South African-based exchange, Coindirect, now trades over 40 altcoins. Paxful COO Artur Schaback comments:

“As a company, we’ve learned a lot from African consumers. For instance, we’ve improved our mobile capabilities to cater to the widespread use of smartphones on the continent. Our experience in Africa has strengthened our capability to serve consumers regardless of geographical location or origin.”

In parts of Africa, cryptocurrencies such as Bitcoin have very little speculative value; with local currencies often struggling, cryptocurrencies are often simply used as payment for goods or transferring funds as a more viable and reliable alternative to local fiat.

Recently, countries such as Zimbabwe, South Sudan, and oil-rich Nigeria have all suffered from inflation, while others continue to go through it.  In these situations, it is hardly surprising that populations look to a more stable form of monetary solution in their daily lives. Paxful, like other exchanges operating for those on the African continent,  is beginning to see this groundswell feed through as Africans turn more readily to P2P cryptocurrency trading as a financial solution to everyday problems.

Ray Youssef, co-founder, and CEO of Paxful suggests Africans have been clever in dealing with financial barriers in some of these countries:

“The people of Africa were educating us. It really wasn’t just Bitcoin and Paxful–it was peer-to-peer finance. These folks were finding ways around all their barriers – whether foreign or domestic – using peer-to-peer finance… The same thing that Uber did for transportation and Airbnb did for hospitality, peer-to-peer financial marketplaces are doing for finance.”

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Africa and the Middle East: Crypto and Blockchain News Roundup, 26th October to 1st November 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

South Africa

South African Revenue Service changes crypto tax laws: The South African Revenue Service (SARS) has announced a new amendment to the tax code that can potentially increase taxation on cryptocurrencies.

Currently, cryptocurrencies are classified as tech assets and thus they are eligible for tax breaks from the government that is reserved for research and development projects. Now that the tax code is going to be changed, traders will have to pay increased income taxes on their profits.

Blockchain to aid water regulation: A local blockchain company, HashCash, is working with the government to help regulate water in the country. The high-tech infrastructure deployed by the company will allow the government to monitor the water usage which is a critical issue in the country which was hit by severe drought recently.

Cape Town was the worst city affected by the drought. As a result, various blockchain companies are looking to work on water conservation systems, including HashCash.

Kenya

Kenya opening up to crypto: Cryptocurrencies are getting more and more traction in Kenya especially in the financial sector where it is disrupting the status quo.

Adoption of cryptocurrencies in the country will hope to increase financial inclusion in not only Kenya but other parts of the continent where there is little or no financial inclusion. The increased use of smartphones in the area is allowing the people to move to a cashless, bankless future where cryptocurrencies will play an important part.

Tanzania

Government looks for blockchain solutions: The Tanzanian government is collaborating with academics and researchers to produce blockchain regulations and solutions, according to South African news source The Citizen.

As part of an annual conference on information technology 2018 in Dar Es Salaam, Dr Jim Yonazi, a senior member of Ministry of Works, Transport and Communication, spoke to the blockchain and cryptocurrency industry in devising new use cases of blockchain to devise regulatory moves.

While Tanzania has a practical approach towards cryptocurrencies, progress in this sector has so far been painfully slow, though it had its first baby birth recorded on the blockchain and a few other innovations. The central bank is also studying DLT for effective regulatory practices.

United Arab Emirates

Government recognizes crypto assets as securities: Recently, the Securities and Commodities Authority (SCA) of UAE has approved a resolution to regulate cryptocurrencies and ICO tokens as securities.

It had been deliberating on a regulatory framework for a while and has now declared cryptocurrency assets as real assets of value and thus, they fall under the framework of the SCA. While the framework itself has not yet been updated for the cryptocurrencies, deliberations are underway to do so.

With the new regulatory status, UAE could become home to more and more cryptocurrency startups in the region. The evidence is out there as the country witnessed the launch of the first officially recognized and registered cryptocurrency exchange recently: The Crypto Bulls Exchange (CBX).

The CBX is not only the first cryptocurrency exchange in UAE but in the whole Gulf Cooperation Council (GCC). It also became the first cryptocurrency exchange to offer UAE dirham trading pairs for cryptocurrencies.

 

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Decentralization: Cryptocurrencies and Solar Energy

Humanitarian Blockchain

a BitcoinNews.com series

   Part 5: Decentralization: Cryptocurrencies and Solar Energy

Rural Africa has sun in abundance, but many across the continent are without electricity, impacting on their access to basic human rights such as health, education, and security. Economic development is strangled and breaking out of poverty is all but impossible without it. More than 1 billion people on the planet suffer from this dilemma. Bitcoin News examines how cryptocurrency together with blockchain is being utilized across the globe by a handful of companies in an attempt to deal with this problem.

Earlier this year, Sun Exchange, a solar micro-leasing marketplace, linked with rural mini-grid solutions provider AfricaPowerhive to create a solution which would harness the crypto-economy in the quest for universal energy access for all.

Sun Exchange SUNEX digital rewards tokens create the funds for building solar-powered rural electrification mini-grid projects for the sub-Saharan African region. Powerhive benefits from funds generated from the sale of Sun Exchange’s SUNEX rewards tokens by public sale. The project also allows for the solar panels used to be sold off later to Sun Exchange members who will, in turn, own the cells used in the projects and subsequently profit from a sustained period of “solar-powered money”. Sun Exchange founder and CEO Abraham Cambridge explains why:

“Together, we are working towards a world where no one is forced to cook with unsafe kerosene or wood-burning stoves, no child has to worry about how they will study after dark, and lack of energy access ceases to propel cycles of poverty.”

The project will raise in the region of USD 23 million as capital and finance 150 new projects offering 175,000 people electricity. Powerhive has other projects underway in Africa, such as its Kuku Poa initiative which uses solar power for chicken incubation. Powerhive founder and CEO Christopher Hornor explained that the crypto-community is not simply in it for financial gain and is made up of “inspired individuals” who support crypto projects such as this that clearly work towards reducing global inequality and making a significant climatic impact.

Cryptocurrency and solar energy can be a perfect match; complimentary in the sense that they both represent their own interpretations of decentralization; one in the form of money, and the other in the form of energy. SolarCoin is an example of this match with its 97.5 billion non-circulation SolarCoins created to be granted to energy producers up until the year 2054.

As SolarCoin explains, “in the Middle East today it is two times cheaper to produce a unit of power with solar energy than with fossil fuel sources”. The company’s goal is to create more solar electricity by rewarding those who generate it, reducing both the cost and payback time of solar installation.

The SolarCoin Foundation issues SolarCoins directly into claimant’s wallets at a rate of 1 SolarCoin per 1 MWh of electricity produced. Claimants can then save, exchange, or spend their SolarCoins as they wish, and may receive ongoing grants. This year, Sun Exchange in South Africa, Solar View in Brazil, and Solar Gain in Chile have all joined the SolarCoin Affiliate programme, and the foundation itself is now a member of the Climate Chain Coalition for Sustainable Development Goals (SDGs). Also just recently MySolarPay has joined the SolarCoin Affiliate Network to help increase Solar adoption in Australia. The current circulating supply of SolarCoin stands at 47,757,794 SLR.

Bitlumens based in Zug, Switzerland, is another company making a difference on the solar energy stage. It states that it can… “offer a peer to peer platform where users adopt off-grid Solar systems to reduce carbon emissions and get access to lighting and water in places where there is no power grid.”

Bitlumens has a unique approach and is there in the field transforming lives and creating confidence amongst those in local communities to strive for a better quality of life. Working in rural Latin America it is attempting to remove the dependence on kerosene and wood, and replacing these with affordable clean energy options. The company website describes some of the problems the company is addressing:

“A single kerosene lamp emits over 100 kg of CO2 per year when used four hours a day. Globally, burning kerosene for lighting generated 240 million tons of CO2 equivalent a year, around 0.5% of global emissions. In fact, just kerosene lamps replaced in Africa and Asia with solar panels saved 1.4 million tons of CO2 equivalent in 2014 alone.  Moreover, on a general basis, burning 20 kg wood during one day emits about 200 grams of PM2.5, this equals smoking 10,000 cigarettes”

Women in the programme lease Bitlumens hardware and pay in installments using BLS tokens, allowing them to build a credit score. Family members are also able to buy tokens which they can then send to family to cover the costs to run equipment, covering associated water and electricity bills. Bitlumens points out that “We also quantify carbon mitigation and particulate matter reduction in each household to allow women to become carbon credit issuers at a later stage.”

The company also provides solar energy to remote villages replacing traditionally used fuels such as biomass, thus reducing farmers costs, in some cases enabling them to recruit labor as a result of the savings made on replacing unsustainable and often harmful fuel with Bitlumens supplied solar energy.

Kevin Treco, an associate director at the Carbon Trust, an environmental consultancy, sees blockchain-based technologies significantly changing the energy use in countries striving to decentralize power and boost renewable sources. “They have faster-growing energy needs… and a more accommodating legal and regulatory environment towards such innovations,” he said.

The United Nations Development Programme has suggested that if such crypto-funded schemes were successful, they could revolutionize renewable energy markets in Eastern Europe and Asia.

Technology supplying cheaper and more sustainable energy options to those in need using blockchain and cryptocurrency may be in its infancy, but it is clearly beginning to get support to where it is most needed, as companies begin to see both its humanitarian and ecological value.

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Africa and the Middle East: Crypto and Blockchain News Roundup, 19th to 25th October 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

Kenya

Restaurant accepts Bitcoin and Dash for food and crypto classes: A new restaurant in Kenya is offering food and cryptocurrency classes in exchange for cryptocurrencies. Situated in the small town of Nyeri, the local tech-savvy restaurant embraced cryptocurrency payment as a first in the region.

The town itself is 150 km from the capital Nairobi and lies near the popular destination of Mount Kenya. According to the proprietress of the eatery, Wambagu: “Since the world is becoming more global, my place is also becoming a global restaurant.”

Wambagu prides herself on being a cryptocurrency pioneer in the country and people flock to her restaurant because of her excellent food. She has also introduced cryptocurrency education classes for interested individuals inside her restaurant every Sunday and attendees can also pay the nominal fee in Bitcoin.

South Africa

South Africa deemed most crypto-friendly country in region: South Africa has been deemed as the most pro-crypto country in the African continent according to a report by French banking group BNB Paribas and Capgemini IT company.

According to the report, South Africa has allowed cryptocurrency payments, trades and investments without too much regulatory backlash. The country is also investing a lot in blockchain and crypto education as well as becoming home to an increasing number of Bitcoin ATMs and cryptocurrency exchanges.

Other African countries are also progressing but a relatively slower pace. Kenya and Ghana are also catching up with South Africa and allowing a pro-crypto culture within the countries.

African Union

Blockchain and crypto making a difference in Africa: Cryptocurrencies and DLT are paving way for economic inclusion and stimulating growth in the African countries. Many public sectors are weighing up the option to use cryptocurrencies to battle corruption and inefficiency in government departments.

While globalization and mercantilism have happened largely at the expense of African nations and exploitation of their resources,  it is refreshing to see that cryptocurrencies and blockchain technology are helping African people and governments push back. The recent adoption of blockchain systems for rare earth metal tracking in Rwanda is a good example because of rampant labor violations going in the mines that provide the world with much of the metals that are used in electronics manufacturing.

Turkey

CoinText Introduced in Turkey: Turkey, along with Argentina, are now within the operational coverage of CoinText, an offline SMS-based cryptocurrency trading solution. With the new service, Turks will be able to use Bitcoin Cash (BCH) through an SMS rather than a wallet which is connected to the internet and thus susceptible to intrusion.

Cryptocurrency trading in the country has reached record levels after a recent plunge in the demand of local currency lira.

Israel

Central banks wants to help blockchain companies: At the Israeli Blockchain Summit in the capital of Tel Aviv, Bank of Israel Head of Innovation and technology, Daniel Hahiashvili, said that the bank is looking to facilitate blockchain companies in the country.

His statement echoed change occurring in the system after the Bank of Israel banned cryptocurrencies five years ago.

United Arab Emirates

Government finds solution for ICO liability: The UAE regulator Securities and Commodities Authority (SCA) has announced a plan that will recognize cryptocurrencies as securities and thus make them liable for SCA’s jurisdiction.

While such a move may be detrimental and less encouraging for cryptocurrencies and new ICOs, it is still one of the more popular ways to regulate new ICOs and their tokens. The SCA has also warned about investing in cryptocurrencies before.

 

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Crypto Lessons and Roast Goat in This Kenyan Restaurant, All Paid in Bitcoin

“Eat at Betty’s” is the word in Nyeri, Kenya, as not only can you pay in crypto, but you can hang around for a tutorial afterwards.

At the foot of Mount Kenya about 150km (90 miles) outside the capital, Nairobi, Betty’s place cooks a fantastic barbeque, known to locals as “nyama choma” and if your Swahili is lacking, it is usually roast goat served with kachumbari salad and ugali, washed down with local beer.

The goat may be standard local Kenyan fare, but the mode of payment certainly isn’t. Owner Beatrice Wambugu has gone crypto, something not common in these parts, happy to take Bitcoin and Dash rather than the usual cash or card. It’s the way to go she says, arguing “since the world is becoming more global, my place is also becoming a global restaurant.”

In fact, Betty’s is really flexible when tourists arrive at her place, “I attract different customers from different parts of the world, whichever coin they have. As long as it’s a viable coin we accept it,” she says.

Ok, so she hasn’t done a roaring trade in crypto till receipts, with, so far, only about 30,000 Kenyan shillings (£230, $300) in sales from about 20 people. But, she has another plan to make up the numbers; crypto lessons. Every Sunday Beatrice runs cryptocurrency tutorials at Betty’s to spread the word on how to empower locals towards a new way of doing things. She says:

“I’ve set aside one day where I can teach my customers. Whoever asks about cryptocurrencies: ‘How does it work? What is Bitcoin?’ I train them.” At my place, it’s ‘nyama choma’ and ‘nyama Bitcoin.’ The restaurant is expanding, having taken over a nearby two-story hotel in just over a year since opening.

Kenya is a difficult proposition when it comes to opening a business due to a high level of local corruption. Recently, Kenyan Distributed Ledgers and Artificial Intelligence task force chairman Bitange Ndemo said that the government should consider tokenizing the economy to deal with “increasing” rates of corruption and uncertainties. James Preston of SA Crypto sees Bitcoin as a way of “banking the unbanked” a term now familiar with many on the African continent, referring to Africa’s 350 million with no access to traditional banking.

“There’s been such a history of poverty in Africa that so many rural communities are yet to be developed with normal banking infrastructure,” he told the BBC.

The new task force chairman Bitange Ndemo, speaking at an Information and Communication Technology Ministry (ICT) stakeholders meeting agrees with that perception and argues:

We must begin to tokenize the economy by giving incentives to young people to do things which they are paid through tokens that can be converted to fiat currency.”

Betty’s goat dish is on the right track.

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Cryptocurrency and Blockchain Makes a Difference in Africa

Humanitarian Blockchain

a BitcoinNews.com series

   Part 4: Cryptocurrency and Blockchain in Africa Is Making a Difference

Both cryptocurrency and blockchain have a part to play in empowering African leaders to inject growth and financial inclusivity into their economies. Individual and local empowerment by taking responsibility for water, electricity, banking, IT, communications, education, local elections, and research are all achievable, as shown by a growth in crypto and blockchain projects in these sectors around the huge continent of Africa. Bitcoin News explores how some projects are making a difference.

Globalization has arguably transpired at the cost of the African nations, which primarily exports raw materials rather than manufactured goods that hold the larger profit margin. Cryptocurrency is an opportunity for the citizens of Africa to enter the global marketplace, investing in entrepreneurial ventures on a scale previously inaccessible.

The application of blockchain-based solutions to small local run enterprises may be a way of breaking the chains of corruption, exploitation by multinational industries and corrupt national governments for many Africans. The reason for using blockchain is that it is secure and transparent in nature. No individual or single entity can alter entries on the distributed ledger.

Connectivity

Connectivity is essential across Africa if it is to address the disparity of those that have and those that don’t and attract business from overseas. A new report by the International Telecommunications Union (ITU) has outlined that Africa will need to invest more on internet connectivity in order to maintain the continent’s current pace of cryptocurrency adoption.

Using the Sun

Solar power needs to be utilized more readily across some of the poorer and more remote parts of the continent. A project by Sun exchange is addressing this problem. AfricaPowerhive will be the beneficiary of funds generated from the sale of Sun Exchange’s SUNEX rewards tokens by public sale. The money will then be spent on developing solar-powered mini-grid projects in Sub-Saharan Africa.

The project will allow for the used solar panels to be sold off later to Sun Exchange members who will, in turn, own the cells used in the projects and subsequently profit from a sustained period of “solar-powered money”. Sun Exchange founder and CEO Abraham Cambridge said in a press release that:

“Together, we are working towards a world where no one is forced to cook with unsafe kerosene or wood-burning stoves, no child has to worry about how they will study after dark, and lack of energy access ceases to propel cycles of poverty.”

Building Schools

Education is an area being tackled using crypto in Rwanda where an NGO and a cryptocurrency platform are planning to construct a school by using only cryptocurrency funding.

The non-profit organization, Zam Zam Water, in a cooperative project with Peer-to-Peer finance platform provider Paxful is aiming to raise $100,000 for an education center. The project will be implemented in Rwanda’s Bugesera District, complete with full-time teaching staff.

The raising of estimated building costs of around $100,000 has been started for the new project with a donation of $20,000 from Paxful. The remaining funds will be raised through online crowdfunding. Cryptocurrency donations via Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Dash will be matched by the crypto platform’s BuiltWithBitcoin initiative until the necessary funds have been raised.

Banking

Out of the 20 countries with the highest fiat inflation according to the CIA World Factbook, 13 of them are in Africa. South Sudan has the worst inflation rate in Africa, over 100% per year, with Congo, Libya, Angola, Sudan, and Suriname having yearly fiat inflation in excess of 20%. Burundi, Mozambique, Sierra Leone, Nigeria, Egypt, Malawi, Liberia, and Ghana, have yearly fiat inflation rates in excess of 10%.

Additionally, a large fraction of Africans doesn’t have banks or access to the financial system. For example, in Sub-Saharan Africa, only 43% of those 15 or older have bank accounts, versus 69% in the rest of the world. Cryptocurrency can provide the financial infrastructure that Africans desperately need but don’t have access to.

Lady Victoria Walker, CEO of the United Digital Currency Reserve Foundation and UK based fintech entrepreneur feels that new technologies such as blockchain and cryptocurrency are essential factors in empowering African leaders to inject growth and financial inclusivity into their economies. She argues:

“Bitcoin is a reality. We have all major world governments scrambling to make sense of it and world leaders sharing their views on the currency. For the past 700 years, our world has relied on the European legacy banking system for means of payments and transactions. Bitcoin is definitely challenging the traditional way when it comes to the transfer of value. Just like the internet changed how we shop, bank, date and find information.”

Solutions are there, such as Africa-focused cryptocurrency exchange called Coindirect. Co-founder Stephen Young says that Africa has unique problems and these must be considered in any startup plan for cryptocurrency adoption on the continent. He feels that current exchanges don’t take these into consideration. In terms of African fiat currencies, Young identifies their systemic volatility, insecurity and lack of governance as factors that the crypto space need to take on board: He argues:

“If Africans are to benefit from the cryptocurrency revolution we need make it easier to buy, store and trade cryptocurrencies. As Africans, it is our responsibility to help build the infrastructure and we need to be a part of the revolution.”

Although cryptocurrency isn’t a solution to all of Africa’s economic instabilities, it is a marketplace full of innovations that have the potential to diversify and better the economy of the continent.

Skeptics have argued that it has been lenders who have historically benefited from microloans, due to non-restrictive or in some instances a complete lack of barriers, which often translate to high-interest rates. The application of blockchain-based solutions to these loans is increasingly being cited by business as a way of addressing other microloan issues such as large overheads, slow delivery, and corruption. The reason for using blockchain is that it is secure and transparent in nature. No individual or single entity can alter entries on the distributed ledger.

An IBM pilot project, developed at the IBM Lab in Nairobi, uses Hyperledger Fabric, a blockchain framework implementation that acts as a bedrock for developing applications and solutions. The project simply requires African users to own a mobile and need capital to grow their business. The IBM blockchain program aims to fill the finance gap so small ventures can flourish on the African continent.

Andrew Kinai, the lead researcher at IBM research, suggested that the aim of the program was to offer the opportunity for small businesses to participate in an interdependent ecosystem based on SMS. Users, some with limited IT literacy would be better positioned to access financing for their orders.

Bribery

In Kenya, misappropriation of funds and fraud at a local level has been a huge problem, with the police, local leaders and utilities all taking bribes. Blockchain is now the last attempt at addressing some of these local issues after years of mismanagement when it was realized that other methods were prone to illegal intervention. A new local building product will be its first use-case. The National Housing Fund under the Finance Act of 2018, to which Kenyans contribute 1.5 percent of their salary, will be responsible for the new blockchain-backed building project, with further financial support from employers.

Also in June, decentralized liquidity network Bancor, in partnership with the non-profit foundation, Grassroots Economics, launched a network of blockchain-based community currencies in Kenya aimed at combating poverty. The project seeks to stimulate local and regional commerce and peer-to-peer activity by enabling Kenyan communities to create and manage their own digital tokens.

Future

There are many reasons why Africans are beginning to turn to cryptocurrencies rather than traditional currencies. Many nationals fall foul of inflation and hyperinflation, resulting in weak and unstable financial systems. Recently, countries such as Zimbabwe, South Sudan, and oil-rich Nigeria have all suffered, many of these countries with inflation rates well into the hundreds of percentages. In these situations, it is hardly surprising that populations look to a more stable form of monetary solutions in their daily lives.

Africa has huge challenges ahead, but with the help of blockchain technology, businesses can be transformed using more efficient ways of working. Blockchain can move Africa forward, simplifying existing systems and processes to lower costs. Blockchain can help reduce fraud, enable fast transactions,  secure supply chains while maintaining transparency. It also removes human error and inefficiencies from a continent which is still developing.

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