Blockchain technology is hacking into the fee forest that has made remittances such a lucrative business for banks and transfer agents.
Like this table according to the World Bank, sending a relatively small amount of R1,340 from South Africa to Kenya costs an average of 12%. Using blockchain technology, companies like Paxful, Flutterwave, AppZone Switch and Chipper Cash are crashing this party, enabling remittances for as low as 1% – and even that low cost is rapidly falling as competition enters the market. .
“For years we’ve heard about how blockchain technology will revolutionize business, but now we’re seeing the evidence,” says Sonya Kuhnel, director of Bitcoin Events.
“The main use case for blockchain in Africa is for remittances, and in some countries these flows represent 4-5% of GDP. So to have 12% of that gobbled up in costs is huge. Here is a great example of the kind of disruption blockchain technology is bringing to Africa.
The Blockchain Africa Conference 2022, a virtual conference taking place on March 17-18, features amazing African blockchain entrepreneurs, such as Uche Elendu, Founder and CEO of AppZone Switch, which is a blockchain-based platform. blockchain designed to facilitate local exchanges and intra-African payments in fiat and digital currencies such as stablecoins.
Elendu points out that one of the biggest obstacles to intra-African trade is the ability to make cross-border payments, other than in US fiat dollars. AppZone Switch solved this problem by creating a platform that enables real-time settlement of fiat currency transactions as well as digital currencies. The aim is to make the settlement of intra-African payments instantaneous and secure.
To support this trend, the Pan African Payments Ecosystem (PAPE) was created as a private and licensed blockchain network that includes a consortium of banks and fintech players.
“There is no doubt that a huge amount of cross-border payments and remittances are going to be processed and settled on the blockchain in the years to come, and this is a very real threat to banks that don’t engage not with this new technology,” says Kuhnel.
Cardano founder Charles Hoskinson will once again be the keynote speaker at the Blockchain Africa conference and is expected to outline plans for streamlining and expanding the blockchain network that was launched in 2017 as an alternative to Ethereum.
Hoskinson is credited with selling blockchain technology to the Ethiopian government, introducing decentralized digital identity (DID) for five million students in 3,500 schools as a means of storing school records. DIDs can be adapted for dozens of other use cases and could ultimately become a place where personal information, from identity documents to Know Your Customer (KYC) details, can be stored in a central repository and accessed. with the permission of the owner. No more need to gather a set of personal data each time you want to apply for funding, for example.
Kuhnel highlights some of the blockchain business cases that are already being rolled out in Africa.
- Absa, PwC and BankservAfrica are partnering with Cardano Africa on a digital ID project that has massive application in Africa, enabling identity verification which in turn will help bring financial services to the unbanked;
- Central Bank Digital Currencies (CBDC) – South Africa recently announced a CBDC trial for cross-border payments that could inspire other financial institutions around the world to embrace the technology. In another example, Nigeria plans to introduce a CBDC called e-Naira in 2022.
- Supply chain and trade finance. Blockchain companies like DataLedger and BeefLedger are developing technology to improve supply chain efficiency by reducing information asymmetries between trading parties.
- The Government of Egypt, through its Customs Authority, has introduced an integrated information platform called National Single Window for Foreign Trade Facilitation in 2021. This will significantly improve trade turnaround times and provide information better in government.
- Trade and Development Bank (TDB) – $400 million worth of fertilizer trade finance transactions have been delivered from Morocco to Ethiopia, all using blockchain technology. The initiative aims to reduce the trade finance gap in Africa and boost trade between African countries.
- Games and Web3 – Jambo and Nestcoin in Nigeria and Usiku Games in Kenya allow online gamers to generate income by earning non-fungible tokens (NFTs) at no cost to themselves.
- Bringing internet access to everyone in Zanzibar – Mesh internet network operator World Mobile has partnered with Zanzibar eGovernment agency to launch free metered WiFi internet access in public-facing government institutions.
These are just a few of the use cases that will be showcased at the Blockchain Africa conference, Kuhnel says.
You can register for the event here.
Presented by Bitcoin Events.
Moneyweb does not endorse any product or service advertised in sponsored articles on our platform.