Can blockchain technology make a difference? Africa sees incredible potential for money

As technological innovations continue to spread across Africa, The continent could offer some unique use cases for blockchain technology. Africa is continuously innovating in a variety of areas, and mobile payments is a great example of the potential for technology to improve drastically the lives of everyday Africans.

While many countries in Africa are still considered developing countries, Some of the most famous states have been at the forefront of technological innovation. Using blockchain technology becomes part of the equation as it is part of different industries and institutions.

Michelle Chivunga, The CEO and founder of Blockchain Solutions and Digital Economy group Global Policy House and an advisor to the governments of Bermuda, the African Union and the UK told Cointelegraph:

“Countries in Africa, including Ghana, are exploring the use of blockchain technology for real estate registration and many countries are looking into digital identity, supply chain origins, healthcare and funding. E-commerce and financial technology are the main drivers of the digital economy in Africa. I see this growing and paving the way for more blockchain activity. “

Can blockchain technology make a difference? Africa sees incredible potential for money
Can blockchain technology make a difference? Africa sees incredible potential for money

Victor Mapunga, A Zimbabwean entrepreneur who co-founded FlexID, a blockchain-based wallet for digital identity solutions Run In the Algorand Protocol, he told Cointelegraph that the infrastructure that drives the use and trading of cryptocurrencies has been a major promoter of blockchain technology across the continent. However, many use cases are already being explored: “There is still a lot to be done. So far, centralized and peer-to-peer crypto exchanges have been the dominant theme.”

Cape Town-based software developer and intelligent contract engineer, Stephen Young, Founder and CEO of the decentralized financial platform NFTfi, a peer-to-peer marketplace for loans secured by non-fungible tokens (NFT), He told Cointelegraph that the onboarding infrastructure for cryptocurrencies such as centralized exchanges and P2P has been efficiently implemented in various African countries and uses blockchain technology most widely on the continent. He added that the possible launch of DeFi platforms in the next year could be at stake:

“In recent years, the infrastructure by which people can buy and trade cryptocurrencies has come a long way. This, combined with informal peer-to-peer trading, enables many more Africans to own cryptocurrencies. “

Potential for greater impact

Peter Munnings, A former ConsenSys engineer, co-founder of the international payments and decentralized liquidity management company Adhara In 2018 he pointed out to Cointelegraph the potential for better cross-border payments through blockchain solutions, based on his experience in the South African banking sector. “Across Africa, payments are slow and complicated due to a lack of liquidity.” According to him, most of the intra-African settlements are still carried out in the United States. “Switching from Kenyan shillings to Tanzanian shillings via US dollars will always be time consuming and complicated.”

Munnings stressed that some projects aim to reform this space, such as the Pan-African Payment and Settlement System and Fnality, which are actively working with local government agencies. JP Morgan was also active in space: “If a commercial bank includes the USD component in all transactions (even if they are quick, easy and transparent), there is a risk of a decline or at least a reduction in the ability to create direct foreign exchange markets between African currencies. “

Pointing out the potential for improving cross-border transactions, Young added that people could potentially live off some gaming platforms to earn cryptocurrency, which is a less obvious way to get paid. Added: “The obvious answer here is cross-border transfers. That and solid money as a way out of the corruption and terrible monetary policy that many Africans have imposed by their governments.

Chivunga believes that blockchain technology could become an important catalyst in transforming some important industries in Africa.. He identified real estate registration, identity, pharmaceutical / health product, and counterfeit product / drug challenges as the top candidates for blockchain-based solutions.

Chivunga also raised the impending implementation of the African Continental Free Trade Area as an opportunity for blockchain technology to play an “important catalytic role” in supporting greater transparency, visibility and inclusion in supply chains. He also hopes that blockchain technology will help tackle wealth inequality across the continent and provide better access to transparent and accountable finance:

“One area I’m passionate about is the opportunity blockchain technology offers to decentralize access to wealth in order to encourage greater financial inclusion and support especially for micro, small and medium-sized businesses. These at least make it 80% of companies from companies in Africa and yet they have very few resources. “

The way to follow

As blockchain solutions are slowly being researched and developed to address the unique African challenges, The potential for greater impact seems almost limitless. As Munnings told Cointelegraph The continent is already leading the way in terms of adopting cryptocurrencies. after a survey from Statista in August 2020:

“Africa has another advantage in that there aren’t many legacy systems that are already working. Kenya’s adoption of MPESA focused less on how good MPESA was than on the fact that there was no other alternative. While the countries of the First World have very liquid payment systems (credit card infrastructure) and currencies, fast processing times, etc., Africa has very little of them. “

Mapunga echoed Munnings’ views on the lack of legacy infrastructure in place. However, he noted that African universities are now more willing to use digital credentials such as degrees and diplomas. Indeed, education is a very important component to support the diffusion of blockchain technology and its possible application to major challenges in Africa. Chivunga stressed that it is not an answer to all problems, but understanding its capabilities will be the key to its adoption.

Usually, There are a number of challenges that stand in the way of innovation, including digital connectivity, infrastructure issues, access to affordable data, improved education and awareness. to Chivunga:

“If the foundations are strengthened, more solutions will likely be developed in Africa not only with blockchain, but also with a convergence or a mix of technologies. Africa can actually lead to higher acceptance, avoid existing challenges and developing local solutions could greatly benefit Africa. “

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