Ripple, a frontrunner in blockchain and cryptocurrency solutions, has joined forces with Onafriq, a leading payments fintech, to revolutionize digital asset-enabled cross-border payments connecting Africa with the Gulf Cooperation Council (GCC), the UK, and Australia.
The partnership marks a new era of efficiency for remittances and business payments across these regions, as Onafriq integrates Ripple’s crypto-enabled payment technology to establish new payment corridors. This collaboration is set to address the longstanding hurdles in cross-border payments, such as high costs, slow transfer times, and reliability issues, thereby accelerating financial inclusion across the African continent.
Utilizing Ripple’s robust blockchain technology, Onafriq is poised to dismantle the barriers that have historically plagued cross-border financial transactions. The collaboration will connect PayAngel in the UK, Pyypl in the GCC, and Zazi Transfer in Australia with Onafriq’s extensive pan-African network, encompassing 27 countries. This move is expected to vastly improve the speed and affordability of sending remittances and conducting business payments to Africa.
Onafriq boasts the largest mobile money footprint across Africa, a continent where mobile money has been transformative in enhancing financial services access. The fintech’s payment hub unites over 500 million mobile wallets across 40 countries, operating in more than 1300 payment corridors. This level of connectivity is pivotal for fostering regional payment interoperability and facilitating seamless cross-border transactions.
The announcement coincides with the appearance of Dare Okoudjou, Onafriq’s Founder & CEO, at Swell Global 2023 in Dubai. This event, Ripple’s annual customer conference, provides a platform to showcase the partnership’s potential to leverage blockchain technologies to amplify Onafriq’s impact on the African continent.
Aaron Sears, SVP of Global Customer Success at Ripple, expressed excitement over expanding their solutions into Africa. Meanwhile, Dare Okoudjou highlighted the partnership’s alignment with Onafriq’s mission to diminish the relevance of borders in African payments. Partner CEOs from PayAngel, Pyypl, and Zazi Transfer also shared their perspectives on the transformative potential of the collaboration for remittances and economic growth in Africa.
The Bitcoin remittance business is blowing up all over the world. South African financial websitemoneywebbrings us the report directly from the oldest continent. The conditions that led to El Salvador making Bitcoin legal tender are present all over Africa. The people are unbanked but everybody has mobile phones. Plus, the diaspora is huge and sends money home constantly while big companies rob them blind with high fees.
Related Reading | Is Largely Unbanked Africa Primed for Bitcoin Adoption?
“The African continent has many opportunities for widespread Bitcoin adoption. One of those opportunities is remittance fueled by Africa’s growing ~mobile~ population. There are over 30 million Africans living outside their countries of origin. Since 2012, the African Union considers the African diaspora the sixth Africa’s region.”
On one hand, “countries such as South Africa, Nigeria, and Kenya” want to regulate bitcoin and other cryptocurrencies. On the other, “According to the World Bank Global Findex, 60% of the population” in the continent are unbanked. The recipe is there. And Bitcoin remittances might be the use case to bring mass adoption to Africa.
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Remittance Revolution, Factor 1. Mobile Wallets
Not only is the mobile population growing, but the whole continent also has ample experience with other forms of “mobile money.” It’s a concept already entrenched in the culture:
“Africa is the global leader in mobile money usage. Sub-Saharan Africa has the fastest growing mobile money industry in the world. The region will continue to see substantial growth in the number of people owning mobile phones. Mobile subscribers in Sub-Saharan Africa are projected to reach 623 million by 2025, half of the continent’s population. The figure will be even higher because of mobile phone sharing culture.”
From there to using Bitcoin, the most efficient money network in the world, it’s just a step. The road is clear.
Factor 2. Government Policies
Inadvertently, governments all over the African continent are pushing Bitcoin adoption with their restrictive policies. For example
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“In 2020, the Central Bank of Nigeria suspendedinternational mobile money transfersto Nigeria. The suspension came after the banking regulator allowed US dollar payouts for international remittances in the country.” And that “means that only Nigerians with a bank account will be able to receive money from abroad. Not all international money transfer services to Nigeria support cash payout.”
Everyone underestimates the rate of #Bitcoin adoption in Nigeria, it will be a major religion soon.
— Bernard ‘berlin’ Parah ⚡️ (@bernard_parah) February 5, 2022
What have the Nigerians done? Turn to Bitcoin remittances, of course.
“In Zimbabwe, several restrictive monetary policies have led to the growing interest and use of bitcoin for remittances. First, the government banned all foreign currencies such as the US dollar, Euro, South Africa rand, and others. The government also placed restrictions on mobile money services, as well as daily withdrawal limits because of severe fiat currency shortages. To bypass these restrictive policies by the central bank, a growing number of Zimbabweans prefer bitcoin remittances to fiat money.”
Remittance Revolution, Factor 3. Weak Currency
This factor wasn’t present in El Salvador, which is a dollarized country. However, in Africa, there are several “countries that experience double-digit inflation such as Zambia, Zimbabwe, Nigeria, Sudan, South Sudan, Ethiopia, Liberia, and Sierra Leone.” For example:
“The Guinean franc is one of the world’s weakest currencies as we launch into 2022. In 2020/21, the Zambian kwacha and Zimbabwe’s dollar were one of the worst performing currencies in the world. The Nigerian naira has lost more than 50% of its value since 2015. The Central Bank of Nigeria devalued the naira thrice in 2019. In May 2021, the central bank devalued the naira by 7.6%.”
What have the Nigerians done? Adopt Bitcoin remittances. What will the other countries do? Adopt Bitcoin remittances, also.
Who said Kenyans don’t own #Bitcoin..
Kenya Ranks 2nd in Africa in P2P settlement, overtaking South Africa 🌍.#cryptocurrencyKE 🇰🇪#africarising 🖤 pic.twitter.com/fg8Ivj3mQA
— CRYPTOCURRENCY KENYA 🇰🇪 (@CryptoHubKE) February 8, 2022
Factor 4. Transfer Fees And Speed
The remittance fees were a prominent factor in the El Salvador story. And in Africa, the story repeats itself:
“A study by the World Bank shows that transfer fees to Sub-Saharan Africa, the poorest region in the world, arethe highestin the entire world. The cost of sending $200 to Sub-Saharan Africa towards the end of 2020 was 8.2% on average. Sending money within Africa is even more expensive.”
What will the whole Sub-Saharan Africa do?
I could wait another 25 years for the ANC to do good on their promises to fix some of historical injustice in South Africa, or I can take control of my own life and buy #bitcoin now.
— Tensai Bankai⚡️ (@tensaibankai) February 8, 2022
Remittance Revolution, Factor 5. Education
This is a positive one, for a change. According to BTrust’s Abubakar Nur Khalil, ina recent article for Bitcoin Magazine:
“Africa is home to more than a thousand indigenous languages, with non-English speaking countries. The majority of Bitcoin material available is in the English language, which means we must also engage in translation efforts to unlock knowledge for millions of non-English speakers on the continent, both on the developer and user front.
Currently, there are efforts around Africa to translate Bitcoin material into different languages such as Amharic, Arabic and Wolof byKal Kassa,Arabic_HODLandFodé Diop, respectively, with ongoing work on others.”
Related Reading | South African Man Loses $900,000 Worth Of Bitcoin After Accidentally Deleting Keys
And we also have to mentionExonumia, who is “creating open source African language translations for Bitcoin literature through community.” And, of course,the BTrust. The organization created and financed by Jay-Z and Jack Dorsey is on a mission to promote Bitcoin development in Africa and India. One of its board of directors members, Abubakar Nur Khalil, recently spoke to Bloomberg Technology about the initiative.
Meet one of the board members of Jay-Z’s and Jack Dorsey’s blind Bitcoin trust: Recursive Capital CEO Abubakar Nur Khalil in Nigeria. He tells @sonalibasak how he envisions web3 in Africa https://t.co/IdyBB7wTvb pic.twitter.com/eFKEga4Nbg
— Bloomberg Technology (@technology) February 4, 2022
Conclusions And The Market
There are negative factors that affect Bitcoin positively, like high fees, weak currencies, and worse government policies. And there are positive ones, like high mobile adoption and available education. The mix might form a perfect storm for Bitcoin adoption in Africa. And the Bitcoin remittances revolution is leading the way.
BTC price chart for 02/10/2022 on Bitstamp| Source: BTC/USD on TradingView.com
After a recent surge of sorts, Bitcoin has been trading horizontally for the last few days.
Featured Image by James Wiseman on Unsplash | Charts by TradingView
Africa-focused but U.S. based unified financial data platform Pngme this week announced its successful seed funding round raised $3 million.
The investment was led by Radical Ventures, Raptor Group, Lateral Capital, and EchoVC. It was actually closed in the third quarter of 2020 and came after the fintech startup raised $500,000 in a pre-seed round in 2018.
The platform collects user-permissioned data through a partner’s existing mobile app using a one-click data-sharing feature which then delivers real-time financial data and alerts.
Pngme hopes to tap into the burgeoning mobile money market in Africa that was kicked off with M-Pesa in 2007. Launched in Kenya, M-Pesa is a mobile banking service that allows users to store and transfer money through their mobile phones, largely targeting a massive population of unbanked citizens in the sub-Saharan region.
Pngme has been aggregating financial data from mobile users and sharing it with banks and financial institutions. The firm has recognized that consumers are growing increasingly aware of their finances and demanding more data.
Speaking to TechCrunch, company co-founder Brendan Playford stated;
“We’re hyper-focused on providing the highest real-time data coverage on credit-invisible customers, something that no other API is offering in our markets,”
“Credit invisible” means that a person lacks a credit history and is therefore invisible to a lender.
The CEO added that the company plans to integrate with large institutional banks next month.
Pngme saw 300% month-on-month growth across the fourth quarter of 2020 and forecasts the number of user-permissioned data profiles created on its platform to reach millions by 2022.
Co-founder Cate Rung commented on the rapid growth of mobile money in the region, adding that it could pave the way for so many new financial products for the end consumer.
“What I think is most exciting is the way mobile money leapfrogged any sort of traditional financial infrastructure.”
Cardano founder Charles Hoskinson has predicted that a DeFi revolution will take place in the developing world, acquiring 100 million users within the next three years by tapping into the market potential on continents such as Africa.