By David Drake
The active efforts to raise public awareness to make people understand the advantages of blockchain technology and the value of cryptocurrencies seem to have borne fruit in recent years. This is demonstrated by growing public interest in space and by the way governments seem to engage with industry stakeholders to create enabling environments in their territories.
As with any company, crypto-companies must begin to explore the next frontiers for expansion and take advantage of new opportunities created by technology. Just a few weeks after the launch of Binance in Uganda, Luno, a cryptocurrency platform based in London, has announced its intention to expand on the African market with the opening of its regional office in Johannesburg, South Africa . But what factors could these cryptocurrency platforms attract to the continent?
Insufficient infrastructure
Africa has experienced numerous challenges due to the lack of adequate infrastructure in many sectors of the economy. For example, only 43% of the population in sub-Saharan countries have bank accounts, compared to the global average of 63%.
The use of the previous US success in revolutionizing an already consolidated financial system offers a good opportunity for companies to provide access to banking services to the large unoccupied population using the same technology. Coupled with the increased penetration of mobile telephony and receptiveness to new technologies among the population, Africa has a lot of unused potential.
Although Africa is a large continent, its 55 constituent countries have a highly fragmented market. This has created challenges in regional integration and scalability for companies on the continent. As a result, intra-African trade has been low. However, with the use of cryptocurrency, especially in the financial sector, geographical boundaries will be broken.
The decentralized nature of technology will ensure that countries are homogeneous, allowing more efficient exchanges and cross-border payments. Companies that offer cryptocurrency solutions to meet these needs will, therefore, be strategically positioned to propagate economic development in the region as their revenues grow.
Inefficient public service
One factor that has eased the reason behind the stagnant growth of Africa is its inefficient public service. The public service has been characterized by bureaucracy, high costs and corrupt practices. This provides an opportunity for the blockchain technology to be adopted in these sectors for rationalization.
Even several African governments seem to be receptive to this technology. For example, the Rwandan government – in collaboration with Microsoft and Wisekey – has the goal of digitizing its land registry using the blockchain. In addition, the Kenyan government will use the blockchain to ensure fairness in the distribution process at affordable prices to its citizens. But it is Uganda who showed the strongest indication of the adoption of blockchain technology.
Jose Merino, co-founder of SID Limited "In May 2018 the President of Uganda, Yoweri K. Museveni publicly approved the blockchain technology in a blockchain conference as useful for critical areas of the economy such as food production, the service industry, the production etc. He added that the Uganda ICT Minister announced at that conference the establishment of a blockchain task force to study the opportunities offered by the blockchain, which is the best indication so far that regulators have Uganda are becoming more receptive to blockchain technology and its many applications – it is likely that appropriate regulation will follow in due course. "
All these combined factors make Africa ready for innovation, and companies in the cryptocurrency industry must seriously consider this exciting frontier.
Disclaimer: David Drake is on the advisory board for most of the companies mentioned or referred to in this article.
