By Bitpesa, a digital currency exchange, has contracted with a Japanese firm allowing Kenyans to purchase second-hand cars, cosmetics and electrical devices using bitcoin. A Nigerian based global non-cash remittent service, Sure Remit, is enabling lower prices for fund transfers among other things.
Bitcoin Can Overcome Africa’s Financial Inclusion Barriers
A 17-year-old cryptocurrency investor from Ghana, Owusu Akyam, states that using bitcoin as a means of payment is simpler, faster and cheaper than pre-existing methods. Token Media is a startup company that has assisted other developing businesses to raise millions of dollars selling tokens. The founder of Token Media explains that Bitcoin is able to overcome the many barriers to financial inclusion that exist within Africa.
Cash is the preferred method of remittance in Africa, with only a few of its countries making use of cellular payment methods. Around 30 million people in countries like Kenya and Zimbabwe use mobiles to perform payments.
Ghana is an example of one African country whose economy is being remodelled by cryptocurrencies. The crypto market in Ghana is however still minuscule, with regulation debates and issues foreshadowing its future.
Lack of Regulation Hinders Progression in Ghana
Owusu Akyam states that smaller business ventures have begun accepting bitcoin payments, and digital currency exchanges are booming with approximately 15 various platforms assisting Ghanians to transact using cryptocurrencies. Mobile phone data and airtime transactions can now be completed using bitcoin.
However many individuals remain sceptical of bitcoin while regulation issues further hinder its progression in these countries. Several fraudulent investment schemes resulting from this lack of regulation further scared the image of the cryptocurrency industry in Ghana. The nearest Ghana has come to establishing regulations is a statement from the Bank of Ghana warning the public on the use of bitcoin as an unregulated activity.
Kenya Jumps on the Bitcoin Band Wagon for Imports
A deal between Japanese SBI Remit firm and Bitpesa, a local digital currency exchange and payments platform, has led to Kenya inhabitants purchasing imported beauty products through this exchange at cheaper prices and more quickly using bitcoin. Payments include electrical gadgets and used Japanese cars, which is a multi-million-dollar industry in Africa.
Kenyans wishing to purchase overseas goods deposit money into Bitpesa’s bank account. The payments are then facilitated on the bitcoin blockchain to SBI Remit, who then complete the final payment in Japan. The process cost half the normal transfer fees, and is finalized within hours compared to the normal 2 week time period when making payments using conventional banking methods. Only 7% of the total amount is charged in fees.
This service will be available in the Democratic Republic of Congo, Ghana, Kenya, Uganda, Morocco, Senegal, Tanzania and Nigeria.
The Remittance Business in Africa Grows
The World Bank expects the remittance business in Africa to continue to grow to over $40 billion this year. Bitcoin protects against inflation for currencies that depreciate against the US dollar and is being viewed as a store of value against the continent-wide issues in Africa of fiat currency devaluation, rising inflation and policy uncertainty.
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