As technological innovation continues to spread across Africa, the continent could provide unique opportunities for blockchain technology. Africa is constantly driving innovation in a number of areas, and mobile payments are a good example of technology’s potential to radically improve the lives of everyday Africans.
While many countries in Africa are still considered developing countries, some of their most prominent countries have been at the forefront of technological innovation. The use of blockchain technology has become part of the equation as it cuts across various industries and organizations.
Michael Chiwunga, CEO and Founder, Digital Economy & Blockchain Solutions Group, Global Policy House, and Advisor to the Governments of Bermuda, African Union and UK, told Cointelegraph:
“Countries in Africa, including Ghana, are considering using blockchain to register countries and many countries in digital identities, sources in supply chains, healthcare and the economy. E-commerce and fintech are important drivers of the digital economy in Africa. Blockchain activity. ”
Victor Mapunga, a Zimbabwean blockchain founder who co-founded FlexID, a portfolio of blockchain-based digital identity solutions running on the Algorand protocol, told Cointelegraph that the infrastructure supporting the use and trading of cryptocurrencies has been the main engine of blockchain technology around the world. on the continent, but a large number of use cases are already being explored: “There is still a lot of work to be done, peer-to-peer cryptocurrency exchange and centralization has been the dominant aspect so far.”
Cape Town-based software developer and smart contract engineer Stephen Young, founder and CEO of the decentralized finance platform NFTfi, a peer-to-peer market for long-term token-backed loans, told Cointelegraph that cryptocurrency infrastructure such as central exchanges and P2P have deployed effectively across countries. Africa. This is the most notable application of blockchain technology on the continent. He added that a potential record of DeFi platforms could emerge next year:
“The infrastructure that allows people to buy and trade digital currencies has come a long way in recent years. This, coupled with informal peer-to-peer trading, allows many Africans to acquire cryptocurrency. ”
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Peter Manning, a former ConsenSys engineer who co-founded decentralized liquidity management and international payments company Adhara in 2018, pointed out to Cointelegraph the potential to improve cross-border settlement with blockchain solutions, drawing on his experience in South African banking. Sectors across Africa, settlement is slow and difficult due to lack of liquidity. Most of the settlements between African countries still go through the United States, he said, adding: “The transition from the Kenyan shilling to the Tanzanian shilling through the US dollar will always be slow and difficult. ”
Munnings stressed that there are two projects that want to reform this space, such as the Pan-African Payments and Settlement System and Fnality, which are actively collaborating with local governments. JP Morgan has also been active in this area, he said: “Having a commercial bank that uses the edge of the US dollar in all transactions (even if it’s fast, easy and transparent) carries the risk of a downturn – or at least restricting the ability creation of foreign exchange markets. Direct Currency Exchange Between African Currencies ”.
Young pointed to the potential for improved cross-border transactions, adding that people are more likely to make a living through some cryptocurrency gaming platforms, which is a less obvious way to make money. He added: “The obvious answer here is cross-border transfers. That is, with cash available as an alternative to getting rid of the corruption and terrible monetary policy that their governments impose on many Africans. ”
Chiwunga believes blockchain technology can be an important catalyst for the transformation of some key industries in Africa. Issues related to land registration, identification, pharmaceuticals / healthcare and counterfeit goods / medicines have been identified as prime candidates for blockchain-based solutions.
Chiwunga also highlighted the upcoming implementation of AfCFTA as an opportunity for blockchain to play a “key catalytic role” to support greater transparency, visibility and involvement in supply chains. He also hopes blockchain will help bridge wealth inequalities across the continent and provide greater access to transparent and responsible finance:
“One area that pleases me is the opportunity blockchain provides for decentralizing access to wealth, to support greater financial inclusion and support, especially for small people.