Game-changing Technology | 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.
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The doors of innovation continue to open up across the African continent. This week, we take a peek into South Africa’s adoption of the metaverse with the sale of more than 144 plots of virtual land, check out the the Zimbabwean government’s plans to create its own Central Bank Digital Currency (CBDC), as well as look at Binance’s launch of a crypto education hub in Cameroon.
We also take a deep dive into how blockchain adoption in Africa continues to change the game in terms of improving the cash flow in weak economies, offering young people across the continent more financial freedom, attracting global investors, and increasing transparency in political and electoral proceedings.
And of course, we have the Bankless Africa podcast where our ever-superb host, Miss Purple, speaks with Afropolitan founder Eche Emole, to discuss how crypto is continuing to provide Africans the ability to create a new era nation-state . Don’t forget to listen, share and leave us a review!
We round off this edition with our learning centre, taking a quick look at an extra layer of security when it comes to crypto wallets.
Contributors: Teafah, Abidemi, Jason the best vibe, anointingthompson1.eth, SpiritedF, Oge, Paulito, Miss Purple, Trewkat, Yofi
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Why Blockchain Technology Is Such A Game Changer
In the past, Africa has lagged behind in the previous industrial revolutions; we sat on the sidelines while we observed the rest of the world change.
The outlook of Africans, however, has changed; we have decided to emerge from what many may consider a deep slumber and progress forward with the rest of the globe.
The African continent is advancing, developing our economies through the use of advanced technologies like mobile, artificial intelligence, and particularly blockchain.
Blockchain technology has ushered in a new era of economic revolution with unpredictable yet exciting socio-economic impacts for Africa; it’s changing the game! Africa's financial sector as a whole has felt the pressure of its previous and existing structure for a long time, but now it has embraced this technology, which could mean we will see a different kind of innovation emerge from the continent.
Cryptocurrency — The Beginning Of a New Era
We have seen a steady increase in cryptocurrency interest, which is not just digital money, but a whole new lifestyle element.
Due to its internet-based nature, cryptocurrency is not geographically constrained. Transactions are stored in a database known as the blockchain, which is a decentralised collection of computers, interconnected via the web, that record and verify transactions in real-time in the form of a ‘ledger’.
Cryptocurrency transactions are different from traditional financial transactions. They are currently not subject to government regulation in many countries, don't require intermediaries in many cases, and are carried out through the internet, allowing global accessibility. It is not surprising that Africans have embraced these digital assets and the technology on which they rest; Africans have often proven that they will find ways to innovate if the opportunities are made available. The global reach of blockchain technology has definitely reduced the magnitude of location as a determining factor to access and success.
How Blockchain Technology Has Contributed to our Growth
Blockchain technology, which many of us consider as the major technological advance of the decade, is evolving and being developed with lightning speed. This ground-breaking technology has grabbed the attention of more regular investors, thanks to the growth of the cryptocurrency markets and the massive value they represent. At this juncture, it is important to note that the blockchain serves considerably more purposes than just hosting cryptocurrencies.
For nations with weak economies, like many of the nations in Africa, the decentralized ledger system on which this technology is based offers several benefits.
Blockchain technology has an obvious real-world application for better industry facilitation; governments, businesses, and investors can hasten the adoption of the technology as it continues to extend throughout global supply chains, and entire economies can profit from its fast transaction rate, effective delivery, and more inclusive growth.
Here are a few ways blockchain has changed the game for Africans in their various sectors:
Attaining Financial Freedom
It is becoming less common to think that one must rely on the economic and administrative systems built on the crumbling structures of colonial traditions.
Considering that this new generation of youths want to shape their own future by utilizing their own skills and resources, there is now the opportunity to do that, thanks to the expansion of cryptocurrency and blockchain technology across the continent.
The first stage towards establishing financial freedom for many young Africans is the ability to transact on an immutable, decentralized, permissionless blockchain that is largely unaffected by the hyperinflation that tends to plague many African countries.
Cryptocurrency investment is developing into a top investment to consider and a way for many to see a larger potential for financial returns while preserving their funds from issues like hyperinflation. With many other blockchain innovations in existence today, including DeFi, NFTs, and the Metaverse space, Africans are continuously open to more financial opportunities.
Attracting Venture Investors
Africa has yet to fully realize the potential of blockchain technology despite it being a key component in the upcoming digital transformation of the global economy.
However, with the advent of technology and the acceleration of adoption across the continent in recent years, things have started to sway slightly.
Many venture investors are considering the potential outcomes of investing in this industry, particularly because of the efforts of Africans to demonstrate the ingenuity and people’s general receptiveness toward this technology.
According to a CV VC research report, blockchain firms in Africa raised $91 million in the first quarter of 2022, which is a startling 1,668% increase in cash flow when compared to the 149% in the previous year.
$127 million or 0.5 percent of the total worldwide funding for blockchain-technology-based innovations was raised in 2021. 96% of these venture capital funds were allocated to innovations in Nigeria, Kenya, South Africa, and Seychelles. Fintech companies received $67 million, which is 53% of the total funds raised, while exchanges collected $34 million, which is 26%.
Encouraging Financial Inclusion
Various financial services are accessible for free to people with little or no access to reliable banking infrastructure. The blockchain has given Africans access to quick and inexpensive electronic funds for everyday purchases, making it much easier for us to participate in our local economies from a more prominent standpoint.
Furthermore, they can access advanced financial tools like lending and borrowing to generate passive income with the expanding decentralized finance (DeFi) ecosystem.
Increasing Transparency in Political Proceedings
In many developing and underdeveloped countries, corruption is prevalent, particularly in the political sectors. The tech can allow for all records and archives to be converted into digital formats, increasing the transparency of administrative procedures. Election rigging can potentially also be prevented with the help of voting on the blockchain. We can now explore ways to curb corruption thanks to the digital ledger's immutability.
A practical example of blockchain application in an election setting is the recent Kenya nation election. Although the adoption of blockchain-based voting, as done in Kenya, may still be a long way off for governments across other African countries, Kenya has set an example; sooner or later, this could become a norm in Africa.
The uses for this distributed peer-to-peer digital ledger of time-stamped transactions are essentially endless.
Cryptocurrency foundations have been effectively laid by blockchain technology. However, it is not just restricted to cryptocurrencies in its application and could potentially be used in various sectors of the economy.
So far, this technology has proven to have the power to completely transform industries, including lending and security, specifically in improving transparency, accountability, and business strategies. The point we are right now with this technology only scratches the surface of its full range of capabilities.
Although its potential has not yet been fully realized, blockchain technology has greatly helped Africa in attaining a myriad of benefits.
The first step towards adoption has been taken, and with time the use of blockchain technology will broaden across the continent, and Africans will be able to realize the full potential of applying this tech.
News In and Around Africa
African Metaverse Opens Up to the World
Ongoing 3D virtual commercialisation plan is brought to life as the first African Metaverse is set to launch in the virtual ‘Ubuntuland’; this metaverse plans to encourage cryptocurrency, commerce, and creativity.
Ubuntuland is created under the Africarare project; the purchasing and development of the metaverse has been opened to the public through NFT marketplaces and private purchases. MTN, Africa's largest multinational telecommunication company, have partnered with Africarare to purchase over 144 plots of their virtual land, which is roughly a 12x12 ‘village’.
Austrian based World Data Lab has also purchased a 6x6 village block to develop their presence, network and achieve set goals. Their mission is to continue producing addressable market statistics and an analytics board for Africans around the metaverse.
Zimbabwean Central Bank Explores the Digital Currency
The Reserve Bank of Zimbabwe plans to create its own Central Bank Digital currency (CBDC). The CBDC is a digital currency issued by the central bank, which is then pegged to the relevant country's fiat currency.
The intention of the bank to explore CBDCs was due to the cabinet decision taken in November 2021. The Bank has conducted studies on countries that have advanced in the CBDC space, they have devised a detailed approach to how to go about the adoption of CBDCs in Zimbabwe.
The RBZ Governor Mr. John Mangudya said that there would be a consultation paper and a consumer perception survey for the public. The result from that will enable the Bank to improve on its plans for the CBDC, while keeping in mind the citizen’s input.
Call for African Web3 and Fintech Ventures to Pitch Live at the Africa Money and DeFi Summit West Africa
The Africa Money and DeFi Summit will host a summit for start-ups; it will be a two day panel and networking event that will share ideas on payment, Crypto, DeFi, digital identity, Neo banking, Mobile money, investing, BNPL, and more.
The start-ups selected by the Africa Money and DeFi team will be given a chance to pitch their business, then state if they need funding, partnership or other forms of assistance, live on stage.
Applications are open until September 1. Interested start-ups should be able to meet the following requirements:
Be an African start-up (at least one African cofounder, or headquarter in Africa)
Be able to attend the summit in Accra Ghana in person 27th and 28th of September
Have a current "ask"
Binance Launches Crypto Education Hub in Cameroon in Collaboration with Inoni Tech
Author: APO Group
Inoni Tech, a non-profit tech hub that offers resources and training for young people throughout Francophone Africa, has announced a partnership with Binance, the world's largest blockchain ecosystem & infrastructure provider for cryptocurrencies, to launch a crypto education hub in Yaoundé, Cameroon.
This is a first-of-its-kind cryptocurrency hub that will serve as a training facility for in-person blockchain education sessions. Through this hub, Binance will provide cryptocurrency enthusiasts with more tools so they can thrive in the ecosystem and build more concrete offline relationships.
Over 600,000 Africans have been taught about cryptocurrencies by Binance since the start of the Binance Masterclass Education Series, via both in-person and online avenues. Since many Cameroonians could benefit from these frequent skill-training sessions, this hub will serve to open up new employment options for the nation's citizens.
South Africa’s Central Bank Grants Local Banks Permission to Serve Crypto Clients
Author: Justinas Baltrusaitis
Financial institutions in South Africa are now required by the Reserve Bank (SARB) to assist consumers conducting crypto transactions, instead of just turning them away. According to the Reserve Bank's new policy, organizations shouldn't outrightly prohibit the use of cryptocurrencies, but rather should treat customers who use them with caution.
Regulators have maintained a positive attitude toward cryptocurrencies while investigating the sector's use cases. Recent work by the SARB and the Intergovernmental Fintech Working Group examined the policy and regulatory ramifications of adopting the distributed ledger technology (DLT).
South Africa accounts for a significant share of crypto investors, which attracts diverse players. Several banks in the country had barred customers from using their credit and debit cards to purchase crypto on foreign exchanges before the Reserve Bank made their announcement.
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The Usage of Hardware Wallets in Crypto
Author: Ku Coin
Since the adoption of DeFi into the mainstream market, there have reportedly been more attacks and exploits on high profile exchanges due to malicious individuals taking advantage of poorly implemented security measures.
Hardware wallets present crypto holders with a more secure way of safeguarding their digital assets. They store users’ private keys (a long string of characters to a user's wallet, which is then used to sign transactions) on a physical device. Each transaction requires the hardware wallet to approve said transaction; they also have backup features that can help safeguard users against loss.
These tend to be a better option for those who are not entirely new to the cryptocurrency space, as one should have some understanding around connecting to sites and wallet drainer projects. Some factors to consider when choosing a hardware wallet include coin compatibility, functionality, cost, and operating system support.
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