Bitcoin is not just a hedge against the money devaluation, but it has also acquired as a new utility as a cost-efficient remittance enabler in Africa. The central bank of Nigeria had imposed a ban on cryptocurrency banking during the last year. However, Nigerians found a new use for the crypto exchanges as a safer and much cheaper way to send and receive money from foreign countries.
Nigeria’s central bank is now looking for a remedy for plummeting readings of the international remittance inflows last year. This year, the central bank has introduced a new policy of offering money to the citizens for shifting the remittance dependency from cryptocurrencies to Naira. Countries like India and Latin America are also in a bind because of a significant economic representation of remittance capital in their economies.
Africa Leading the World in Digital Payment and Decentralized Payments
The news of two major investments in Kenya has diverted the crypto community’s attention towards African markets. Recently, the digital payments giant MasterCard has invested $100 million in Airtel Africa. Meanwhile, another major investment of $200 million is followed by TPG, Telephone Service Company, in the UK-based African Telecom arm. Both TPG and MasterCard have small stakes in Airtel Africa now. It should be noted that Airtel Africa is operational in 14 African countries.
These massive investments do not surprise the 50% of the mobile money transfer services in the world used by African citizens. These mobile money transfers are accessible to people without the involvement of bank accounts. Considering that the existing market for decentralized monetization is already at work in Africa. The economy makes up an ideal place for crypto exchanges and digital assets adoption.
Feasibility of Crypto Transition and Corporate Spin-offs in Africa
The mobile money market of Africa is ripe for ICOs and startups. However, there are already towering figures like M-Pesa sponsored by UK-Vodafone. Last year, the M-Pesa brand was acquired by Safaricom and Vodacom to further expand their operations. Lisa Kimathi, the Senior Research Associate at the bank of Nairobi, believes that even if the business model is a success in Kenya, it can fail in other African countries.
Many other African-based telcos are planning to go ahead with a corporate spin-off of their mobile money divisions in the wake of the latest cryptocurrency trend. The environment of competition and the space for adjustment in different African Economies can make room for various fintech digital asset espousal and exchange affiliations in the future.