Episode 3: How Can Crypto Help Africa?
This week on the Yellow Card podcast, we are joined by Co-Founder and CEO, Chris Maurice; Chief Business Officer, Munachi Ogueke; and Leader Designer, Bashir Aminu. In this episode of the podcast, we discuss how Bitcoin and crypto can help Africa.
Cryptocurrency is one of the most important technological advancements since the Internet according to Munachi. Africa is a developing continent, who still faces issues with its economic structure and financial systems. Compared to Chinese and Asian economies where electronic payment methods are dominant, cash is still the primary payment method used in Africa, which leads to many errors and delays when trying to transact with others. This is where crypto can come in to help solve many issues. In the past few years, Africa has seen more FinTech companies pop up to solve these problems. Mobile money is one of the solutions that has become popular in many African countries; however, it still has many restrictions and expenses.
When people look at the payment space in Africa, they look at Mpesa as the solution. A common question people ask is "why use Bitcoin when people can use Mpesa?" However, they don't understand the limitations of mobile money and the fees associated with it. It costs $0.11 to send $1 using mobile money. Mobile money is also very centralized: it is built and controlled by private companies. The use of a currency that can go beyond the borders of any country can help to create an African super economy, instead of the current partially-isolated economies of each individual country. Bitcoin is a currency that has the capability to do that; it is a very powerful payment system.
It's widely known in Africa that African countries don't trade with themselves as much as they should. If the Continental Free Trade Area can help to generate trade between African countries, then it could be a good thing for everyone. When Bashir first heard about bitcoin a few years ago, it was made out to be an underground payment method. However, it has come so far and we now see it on major news sources all over the world. This shows the resilience and progress Bitcoin has made and will continue to make. Governments all over the world have started putting legislation in place to make it easier or harder to access crypto, which adds to the viability of Bitcoin because it is forcing governments to acknowledge it.
Crypto being a trustless form of payment is something that can really help countries who struggle with corruption. We are still in the early stages of crypto and still have kinks to work out for it to be accessible by everyone.
However, it can help to save tons of money if used to transact between countries in Africa. Currently, it is extremely expensive to move money to your neighboring countries. The average cost of moving money within Africa is 19%. Also, 17% of the African nation's imports come from Africa, whereas in Europe it is 67%. Countries in Africa don't want to make it easy to transact with each other; this is the same with trade, tourism, business travel, and more.
A company out of Berlin is creating a system on the blockchain which helps to track minerals and ensure that no conflict minerals sneak into the supply chain. However, Chris is skeptical of this solution system because humans and corruption are still in the equation. Corruption first needs to be solved before many of these solutions can be implemented.
- How does crypto help in Africa.[1:08]
- Problems with Mobile Money.[3:48]
- Contential Free Trader Area.[8:28]
- Why crypto is important?[9:52]
- Trust in crypto.[11:58]
- Trade in Africa[16:35]
- Company using blockchain to help reduce blood diamonds.[18:30]
- Bitcoin as money transfer.[25:50]
- Honeybadger don't care.[27:25]
- Crypto in India.[28:40]
- The power of Bitcoin.[30:36]
- The best place to buy Bitcoin.[31:55]