In a rare moment of consensus, both the crypto faithful and sceptics agree that 2022 was an annus horribilis for the digital assets industry globally. But what can we expect in 2023, especially in the African context?

This article looks at ten themes that are likely to take centre stage in the African crypto space in 2023. To be clear – neither this list nor the examples provided in each section are meant to be exhaustive.

Let’s get going.

1. Tokenisation of Yield Generating Assets

Coming into 2023, there is a lot of buzz about bringing yield generating assets from the real world onto the blockchain. 

The rise of DeFi proved the idea that liquidity sitting on-chain can be put to work to generate yield. However, many methods of generating yield on-chain are susceptible to crypto’s boom-bust cycles, meaning the yields are not sustainable.

In search of sustainable on-chain yield, some projects have embraced the idea of tokenising yield generating assets from the real world. Examples of such assets include cash, loans, corporate and government bonds.

This results in a win-win scenario because borrowers in the real world get access to a wider pool of funds, and at the same time, parties holding funds on-chain can enjoy earnings that are tied to activity in the real world.

This arrangement is potentially transformative in the African context where capital is scarce and borrowing costs are high. For example, the African Development Bank reports that only 40% of Africa’s trade is bank-intermediated, as compared to an average of 80% globally.   

On the African front, Goldfinch has emerged as a leader in the crypto lending space. In 2022, the a16z backed project hit a milestone of $101 million in active loans, with Kenya, Nigeria and Uganda ranking among its most active markets worldwide.

Goldfinch’s business model involves extending credit lines to lending businesses in emerging markets. The credit lines consist of pools of USDC stablecoins supplied by investors on Goldfinch’s platform. Once available, lending businesses can draw the USDC, convert it to local currency and lend it out at interest.

Goldfinch is just one example of many projects that are building in the crypto lending space. MakerDAO is also making big moves in this space in the United States, although it hasn’t made its presence felt in Africa yet. Given Africa’s acute financing needs, this is a sector of crypto activity that’s poised to continue growing on the continent for some time to come.

2. The Binance Ecosystem

Despite crypto winter, Binance grew its global employee count from 3,000 to 8,000 in 2022. Last week, Binance’s CEO confirmed plans to further expand headcount by up to 30% in 2023.

In 2022, we saw Binance investing heavily at the grassroots level in Africa – it was a rare weekend when there wasn’t a Binance event happening somewhere on the continent.

Another aspect of Binance’s activity on the continent that may have flown under the radar relates to appointments. To give a few prominent examples, in September 2022, Binance named two Africans to its new Global Advisory Board.

One was Nigerian entrepreneur Ibukun Awosika and the other was South African banker Leslie Maasdorp. At the regional level, we saw Binance appoint Hannes Wessels as South Africa Regional Director and Nadeem Anjarwalla as East Africa Regional Director.

In short, Binance is adding some serious talent to its executive ranks on the Africa side and this provides insight into the scale of the firm’s ambitions on the continent.

Beyond events and appointments, there were a myriad of other stories relating to Binance Africa in 2022. Others that stood out include Binance’s CEO visiting with a number of African presidents in Francophone Africa, the launch of a crypto hub in Cameroon and talks of Nigeria’s NEPZA partnering with Binance to create a special crypto economic zone.

Suffice to say, there is a lot going on in the Binance Africa ecosystem and it doesn’t look like the company will be slowing down any time soon.

3. Licenses

Compared to other subjects in crypto, licensing ranks amongst the least interesting. Yet, as crypto regulatory frameworks spring to life around the world, licensing will become one of the most important subjects in the crypto industry going forward.

To see crypto licensing in practice, we can look at the real world example of pan-African crypto exchange Yellow Card in Botswana.

In October 2022, Yellow Card announced that it was the first company to receive a Virtual Asset Service Provider (VASP) license from regulators in Botswana. The licensing regime had been introduced by Botswana’s Virtual Assets Bill which passed in February 2022. Among other things, the Virtual Assets Bill prohibited VASPs from delivering services to residents of Botswana without a license from the government.

Botswana is not unique in this regard. The southern African country is following a set of international guidelines provided by the Financial Action Task Force (FATF). Mauritius passed a comprehensive crypto bill in December 2021 that mirrors Botswana’s. Similarly, South Africa has signalled that Crypto Asset Service Providers (CASPs) will need to apply for licenses between June and November 2023.

So it’s safe to say we are heading to a world where the regulatory burden for crypto projects running a pan-African strategy will grow. As such, projects will need to start contemplating these requirements as they put together their expansion strategy.

Ultimately, the emergence of licensing regimes across Africa changes the calculus for all ecosystem players, including users, token holders, VCs and founders. There is also the question of how regulators will go about enforcing these new rules at the domestic level, given crypto’s cross-border nature.

4. Mercy Corps Ventures’ Pilots

Mercy Corps Ventures (MCV) is the venture capital arm of Mercy Corps, a global NGO that was founded in 1979. Since 2015, MCV has supported over 35 ventures to scale and raise over $330 million in follow-on capital. MCV’s portfolio companies mostly fall into the categories of adaptive agriculture and food systems, frontier fintech and climate smart systems.

In 2022, we saw MCV initiate a number of DeFi-focused pilot programs with up-and-coming crypto projects in Africa. Examples of projects that participated in pilots with MCV include Ejara, Empowa, Fonbnk and Kotani Pay.

Each pilot is set up to test specific hypotheses. When a pilot launches, MCV publishes an announcement detailing the hypotheses being tested, what is being measured and what the learning questions are. After a pilot is complete, MCV publishes a discussion of the findings.

MCV occupies a unique place in the ecosystem because it has both the clout to bring together key players in crypto ecosystem and the institutional capacity to run pilots with them.

It’s still an open question as to what crypto’s killer app in Africa will be and so a systematic approach to exploring this question makes sense. This is exactly what MCV is doing. It seems as if it’s only a matter of time before these pilots, when viewed together, will provide a picture that helps to advance our understanding of what is possible with crypto in Africa.

5. Investment DAOs

DAO stands for Decentralised Autonomous Organisation, a type of organisational structure where the organisation’s aims are coordinated and executed through blockchain technology. Often likened to a group chat with a bank account, legally speaking, DAOs are odd entities.

As a16z explains: “DAOs share characteristics with partnerships, corporations, trusts and cooperatives, but the operational and organizational functionality derived from the technology itself presents issues in being classified within those existing entity structures.”

In other words, DAOs are a bit of a categorisation puzzle like the platypus – a mammal that has a beak, lays eggs, produces venom and uses electricity to hunt. The story goes that when British scientists were presented with the first imported specimen of an Australian platypus in 1799, they thought it was a hoax.

Similar to how we can create corporations to serve all kinds of purposes, DAOs too can be created to serve a variety of aims. Relevant to our discussion are investment DAOs, which are sometimes referred to as Venture DAOs. As the names suggest, such DAOs are created by a community for the purpose of coordinating capital in order to make investments.

Investment DAOs can be structured in many ways and this will influence how the organisation makes decisions and distributes profits. As to the why, the literature on Investment DAOs posits that these entities could be the next evolutionary step for venture capital.

The argument goes that while traditional VCs are good at deploying capital, they are not always structured to be able to deliver the post-funding support that start-ups need. Here, an Investment DAO may be better suited to provide the necessary support given they have a deep bench of DAO members with a range of expertise.

In the African context, there are a number of Investment DAOs being built. These include Africa3, AfricaDAO and PandoDAO. In 2022, Africa received less than 1% of global VC funding despite being home to nearly 17% of the global population. As such, the continent presents fertile ground for Investment DAOs to prove their utility.

6. Social & Environmental Impact through Bitcoin Mining

Conventional wisdom has long held that Bitcoin mining is not viable in Africa due to a combination of high electricity costs and intermittent supply. The available data supports this view, with the Cambridge Centre for Alternative Finance reporting that in December 2021, Africa accounted for only 0.18% of Bitcoin’s hash rate.

Despite this, there is a new picture emerging regarding the role that Bitcoin mining can play on the continent. Beyond the financial gains that come from Bitcoin mining, much to everyone’s surprise, we are starting to learn that Bitcoin mining can deliver beneficial social and environmental impact.

There are two stories that illustrate this counterintuitive concept. First is a company called Gridless in Kenya. The company acts as a buyer of first and last resort for energy produced from mini-grids and in turn uses this excess energy to run Bitcoin mining operations onsite, thus generating revenue.

This has the effect of lowering tariffs for other users that draw power from the mini-grid, thus lowering the barrier of access to electricity. As the community’s needs grow, Gridless scales back how much energy it pulls from the grid. In December 2022, Gridless announced a $2 million seed round co-led by Jack Dorsey’s Block.

The second story is about Virunga National Park, which is found on the eastern side of the Democratic Republic of Congo. In an interview with MIT’s Technology review, Virunga’s Emmanuel de Merode shared how the park was on the brink of bankruptcy due to the collapse of tourism over four years. Tourists had disappeared due to a combination of security concerns, ebola and COVID-19 between 2018 and 2021, taking 40% of annual park revenue with them.

In September 2020, Virunga started using the excess electricity produced by the park’s hydroelectric plants to mine Bitcoin. In 2021 the park generated $500,000 from its mining operations. In another datapoint, in March 2022, the park was on target to generate $150,000 in monthly revenue, which is “close to what tourism had provided at its peak.”

With the cases of Gridless and Virunga, we find concrete examples of how Bitcoin mining and renewable energy can be leveraged to deliver beneficial social and environmental impact. Given the success of Gridless and Virunga and the ease with which their models can be reproduced, it’s a safe bet that similar projects will emerge on the continent in 2023.

7. Loyalty Points

In the global north, talk of loyalty points programs typically conjures up images of airlines, credit cards and the like – hardly the province of the underbanked. Yet, there is one project in Kenya – Nuzo – that’s putting a new spin on how loyalty points can be leveraged by small-scale retailers to drive sales and improve customer retention.

Nuzo was launched in Kenya in June 2022 and as of December 2022, it had reached 100,000 users and participation from over 2,500 retailers. According to the company, retailers that have signed up for Nuzo have improved customer retention by 35% and sales by 200%.

To begin using Nuzo’s services, retailers need a Nuzo Wallet. Once setup on the wallet, retailers can begin accepting payments from other Nuzo Wallet users, which are made on the Celo blockchain. The cost of payments through the Nuzo Wallet can save retailers up to 90% of what they would be charged if their customers used M-Pesa. Customers benefit too, because they receive the Nuzo tokens as a reward whenever they make a purchase.

Nuzo tokens are issued on the Celo blockchain and pegged to the US Dollar, meaning they are effectively a cashback reward. In 2023, Nuzo plans to develop savings and credit products for retailers.

8. Local Stablecoin Offerings

According to data from Coin Metrics, on-chain stablecoin settlements crossed the $8 trillion mark in 2022. In comparison, annual volumes for Mastercard and American Express are typically ~$2.2 trillion and ~$1 trillion respectively. With an annual volume of ~$12 trillion, Visa maintains a healthy lead, but it’s clear that stablecoins are closing in.

While there is scant Africa-specific data on stablecoins, there are many accounts of just how popular stablecoins are on the continent. For example, in September 2022, South Africa’s Moneyweb reported that African companies were embracing stablecoins due to local shortages of US dollars. In another example, the co-founders of Canza Finance shared a story of visiting a rural part of Nigeria and encountering a currency trader whose lifetime USDT trading volume was $8 million.

Given the success of dollar denominated stablecoins, there is a legitimate question to be asked as to whether local currency stablecoins are viable in Africa. In 2023, one project that will test this question is Canza Finance with its Baki product.

Baki is a multi-currency stablecoin system that seeks to facilitate exchange between African currencies at central bank rates. The goal behind this system is to overcome the high foreign exchange costs faced by businesses which are often forced to trade at unfavourable rates in parallel markets.

In April 2022, we learnt that TON Foundation was in talks with Cameroon, Congo-Brazzaville and DRC about plans to launch “localized stablecoins” on the TON blockchain. Speaking to Forbes, an anonymous source explained that the stablecoins wouldn’t be CBDCs or private stablecoins like USDT, but would follow a “hybrid approach” and be “regionally applicable” and “regionally relevant.”

This doesn’t give us much to go on, but it’s worth paying attention to. TON blockchain has links to Telegram messenger, and the article quoted above suggests that the stablecoins for Cameroon, Congo-Brazzaville and DRC would be integrated with Telegram.

9. Crypto Remittances

Crypto remittances have been a subject of discussion in Africa for years. In fact, 2023 will mark ten years since Bitpesa, now AZA Finance, launched in Kenya and started facilitating remittances via Bitcoin.

Given the crypto remittance discussion has been ongoing for so long, what more can be said on the topic in 2023? One observation we can make is that there is now a wide range of crypto companies using a variety of approaches to facilitate remittances to Africa.

To give a few examples, in June 2022, remittance service MoneyGram announced a partnership with Stellar Network and Circle, where MoneyGram users can cash out USDC for local currency at MoneyGram locations. As of February 2015, MoneyGram had 25,000 locations in Africa.

In November 2022, payment gateway MFS Africa and Ripple announced a partnership that will see MFS Africa leveraging Ripple’s On-Demand Liquidity (ODL) solution for cross-border mobile money payments in Africa. As of March 2021, MFS Africa was connected to over 320 million mobile money wallets in Africa, which at the time represented roughly 60% of all such wallets on the continent.

In December 2022, Nigeria’s Bitnob announced partnerships with Strike in the United States and CoinCorner in Europe. These partnerships will see the companies leverage Bitcoin’s lightning network for transfers to Africa, with Bitnob handling the cash outs in Nigeria, Kenya & Ghana.

Given the variety of approaches being used, a de facto experiment is now underway to explore what is the best way to integrate crypto into remittances. Another noteworthy aspect in 2023, when we look at the footprints of MoneyGram and MFS Africa, is the scale at which crypto powered remittances can now be distributed.

10. Tokenisation of Interests in Natural Resources

This review has already covered the tokenisation of certain yield generating assets for the purposes of delivering on-chain yield.

Another subset of tokenisation activity to watch in 2023 is the tokenisation of interests in natural resources. This activity doesn’t receive as much coverage in the crypto media.

Nevertheless, mining is a key industry in Africa, and so if the mining industry embraces tokenisation, such tokens would easily constitute the largest category of cryptoassets originating from Africa (in dollar terms).

In 2022, a number of Africa-focused projects emerged at the intersection of resource mining and crypto. One was South Africa’s Zambesi Gold, which acquires gold mines and uses 75% of the “profit gold” to acquire additional mines and the remaining 25% to back its ZGD token.

Another company that made news was Canada’s Madison Metals, which has agreements in place to tokenise up to 9,000 tonnes of uranium in Namibia.

Of course, it was the Central African Republic (CAR) that captured everyone’s imagination in mid-2022 when the country announced plans to tokenise its resources as part of Project Sango. Sango has stalled due to legal issues, with CAR’s top court challenging the constitutionality of plans to sell citizenship.

Mining is capital intensive activity and requires long lead times to develop projects. Enegra Group’s Matthew Averay argues that tokenisation levels the playing field for junior miners because it provides an alternative to issuing debt or equity in order to finance projects.

In its marketing materials for Sango, the government of CAR told a compelling story of an African country that sits on billions of dollars of natural resources while being home to a population that suffers from extreme poverty. Tokenisation introduces new methods of bringing liquidity to illiquid assets. As such, the timing seems ripe for the emergence of a repeatable playbook for the tokenisation of natural resources in Africa.

If you enjoyed this article, consider subscribing to our weekly newsletter, where you can find more analysis on developments in the African crypto space.

The post African Crypto: 10 Themes for 2023 first appeared on AfricanCrypto.com.

Welcome back to the African Crypto Weekly. December is in full swing and 2023 is coming into view. The crypto news cycle hasn’t slowed down yet, but before we get into the details, let’s kick it off with P2P.

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Africa Combined

For the week ended 4 December, Africa Combined volume on LocalBitcoins was $1.38 million, which represented a 2% improvement on the previous week’s volume of $1.36 million. This marks the third consecutive week of growing volume since the FTX shock. Transactions came in at 4,652 for the week ended 4 December, which represented an 8% improvement on the previous week’s count of 4,318.

South Africa

SA’s volume for the week ended 4 December was $595.0K, which represented a 12% decline on the previous week’s volume of $677.8K. Transactions came in at 1,214 for the week ended 4 December, which represented a 12% improvement on the previous week’s count of 1,087. The gap between SA and Nigeria for the top spot in YTD volume terms now sits at $520.6K, in SA’s favour.

Nigeria

Nigeria’s volume for the week ended 4 December was $408.8K, which represented an 18% improvement on the previous week’s volume of $345.7K. Transactions came in at 1,247 for the week ended 4 December, which represented a 5% improvement on the previous week’s count of 1,182.

Kenya

Kenya’s volume for the week ended 4 December was $251.4K, which represented an 18% improvement on the previous week’s volume of $213.5K. Transactions came in at 1,544 for the week ended 4 December, which represented a 12% improvement on the previous week’s count of 1,379.

Funding – Gridless

Newsletter #28, which went out on 14 October, covered the “growing buzz” about a Kenyan project called Gridless. On Tuesday, Gridless founder Erik Hersman announced that the project had raised a $2 million seed round co-led by Stillmark and Block, the latter being a tech conglomerate led by ex-Twitter CEO Jack Dorsey. Gridless’ approach involves partnering with small scale energy producers in rural Africa to subsidise the development of renewable energy projects.

The company acts as a buyer of first and last resort for energy produced from mini-grids and in turn uses this excess energy to run Bitcoin mining operations onsite, thus generating revenue. This has the effect of lowering tariffs for other users that draw power from the mini-grid, thus lowering the barrier of access to electricity. As the community’s needs grow, Gridless scales back how much energy it pulls from the grid. So far, three out of the five pilot projects contracted by the company in rural Kenya are operational. Gridless has plans to expand to other countries in East Africa.

Partnerships – Grassroots Economics x Celo

Last Thursday, Grassroots Economics (GE) announced that it is moving to the Celo blockchain. GE is a Kenyan non-profit that has been conducting research on Community Inclusion Currencies (CICs) for over a decade. CICs are a medium of exchange that can only be used within a certain community or network. In the humanitarian and development context, the goal behind such an approach is to lock injected value in a marginalised community, thus allowing it to circulate for longer.

As of July 2022, GE had helped 47 communities in Kenya and South Africa to develop their own CIC programs, the most well-known being the Sarafu Network in Kenya. The move to Celo will mean that tokens issued by communities in GE’s ecosystem will now be issued on the Celo blockchain. To support GE, the Celo Foundation provided the non-profit with enough stake to operate a validator node. According to GE’s founder, Will Ruddick, the rewards from operating as a validator on Celo will allow the non-profit to cover gas fees for CIC users.

Music NFTs – Loop x Jay Em

Last week, Jay Em, a music duo from South Africa, announced the launch of their music NFT project titled The Loop x Jay Em NFT project. The project is made up of 1,000 NFTs. A purchase of a single NFT gives a buyer access to five tracks, each coming with a unique piece of digital art. Among other benefits, NFT holders will also receive an ownership share in the accompanying music and a percentage of royalties and income derived from the licensing of any of the tracks.

To deliver this project, Jay Em partnered with a platform called Loop. Loop was developed by FeelMyFlo, a digital music distribution service based in the UK. Since NFT art took off in 2021, there has been chatter that music NFTs could be next. Advertised benefits of music NFTs include that they give musicians a different pathway to monetisation and also provide new incentive mechanisms around artist discovery.

Exchanges – AAX

Over the past week, major crypto publications published a story that Nigerian users of now defunct AAX exchange had stormed the exchange’s office in Lagos and attacked staff. On Tuesday, SiBAN, a self-regulatory blockchain association in Nigeria, issued a statement that these reports are false.

Regulatory – Nigeria

A couple of weeks ago, newsletter #34 covered how Kenya’s lawmakers are weighing a bill that will introduce a taxation regime for crypto. Nigeria looks set to follow suit, with The Cable reporting that the country’s draft Finance Bill 2022 has provisions clarifying the tax treatment of cryptocurrencies and other digital assets. The bill is still working its way through the drafting process, with the next stop being Nigeria’s Federal Executive Council before it gets sent to the National Assembly.

Partnerships – Strike x Bitnob

On Tuesday, Strike CEO Jack Mallers announced that Strike will partner with Nigeria’s Bitnob to facilitate cross-border payments via the Bitcoin Lightning Network. Cointelegraph reports that the announcement was made onstage during the AfroBitcoin conference in Ghana. Bitnob CEO Bernard Parah explained that users of the feature known as Send Globally won’t touch any Bitcoin. Instead, when a Strike customer initiates an international USD transfer, the USD is converted into Bitcoin, sent via the Lightning Network to Bitnob, which then converts it to local currency and deposits it to any supported phone number or bank account.

According to Strike’s website, Bitnob account holders can also elect to receive payment in stablecoins. Currently, the available payment corridors for the Send Globally feature are from the US to Nigeria, Ghana or Kenya and vice versa. However, there are plans to roll out the service across Africa. Strike’s website says it won’t charge a fee for the Lightning Network transfer but will apply a margin for the foreign currency exchange, which will be shared with its third-party partners.

Mandela Amoussou | AfroBitcoin Conference – Highlights and a Recap (Securities.io)

Emele Onu | Nigeria Caps ATM Cash Withdrawals at $45 Daily to Push Digital Payments (Bloomberg)

Jessica Klein | Most Influential Artist: Osinachi (Coindesk)

PR Newswire | Cardano Founding Entity EMURGO Launches EMURGO Media (PR Newswire)

Uyo, Nigeria | VIBRA Bitcoin Summit | 10 December, 10am (Twitter)

Lagos, Nigeria | Wasset Community Hangout 1.0 | 17 December, 9am (Twitter)

Nairobi, Kenya | Blockchain Christmas 2022 | 17 December, 10am (Twitter)

The post ACR Weekly: Jack Dorsey Backs Kenya’s Gridless (#36) first appeared on AfricanCrypto.com.

On Thursday 1 December, Grassroots Economics (GE) – the non-profit behind Sarafu Network – announced that it is moving to Celo. The move means that tokens issued by communities in GE’s ecosystem will now be issued on the Celo blockchain.

What is Grassroots Economics?

Founded in Kenya, GE is a non-profit that has been conducting research on Community Inclusion Currencies (CICs) for over a decade. CICs are a medium of exchange that can only be used within a certain community or network. They are typically designed with certain incentive structures that encourage holders to spend the currency instead of hoarding it.

In a world already awash with tokens, one might ask, why is a non-profit like GE focused on setting up infrastructure to help marginalised communities issue their own currencies?  

The theory goes like this: A key challenge with humanitarian and development aid is that cash injections do not circulate for long in the targeted community. This raises questions about the sustainability of this approach. 

To overcome this problem, CIC designers turned to issuing cash injections in the form of vouchers, and then such vouchers function as a currency in the targeted community. 

Given it’s only businesses and individuals signed up to the program that will accept the vouchers as payment, this locks the injected value into that network.

The end result is the value circulates for longer in the targeted community, thus giving the businesses a better chance to flourish and start providing jobs and other types of services in that community.

In 2018, GE began issuing its vouchers in the form of blockchain-based tokens. Once users register for a CIC program, tokens are deposited to a blockchain wallet which is tied to their phone number and transferable via USSD, meaning users don’t need internet access.     

As of July 2022, GE had helped 47 communities in Kenya and South Africa to develop their own CIC programs, the most well-known being Sarafu. In March 2021, the Kenyan Red Cross announced that it would begin distributing blockchain-based Sarafu tokens to anyone who registered for its new nationwide basic income system. 

Among its partners, GE counts leading aid organisations that include the Red Cross, UNICEF and the World Food Program.

Why Did Grassroots Economics Move to Celo?

Prior to the Celo move, GE’s CICs were issued on its own self-hosted EVM sidechain called Kitabu. Before Kitabu, GE had run on the PoA blockchain in 2018, followed by a move to Gnosis chain (formerly xDai) in 2019, until Kitabu launched in 2021.

GE’s search for the ideal blockchain platform was driven by two competing needs: the benefits of a public blockchain, like security, decentralisation and liquidity, and the need for extremely low gas fees, given the income profile of the communities that GE works with. With the move to Celo, it appears GE has finally found an arrangement that meets both these needs adequately.

In a post titled Why Celo, GE founder Will Ruddick shared a list of nine reasons why GE is moving to Celo.  A key reason is that Celo agreed to provide GE with enough stake to run a validator node. This will allow GE to cover user gas fees for CIC transactions using rewards that the Celo protocol provides to validators.

Celo has a PoS consensus mechanism which requires 10,000 CELO ($6,700 as of writing) to be locked up in order to qualify as a validator. Ruddick wrote that GE has been asking blockchain foundations for such support for some time and that it’s a “dream come true” that the Celo Foundation agreed.

Other reasons for why GE chose Celo include its physical presence in Kenya, its EVM compatibility, on-chain liquidity, mobile-first approach and humanitarian focus.

In his post, Ruddick also addressed criticisms of the move to Celo, including a perception that GE “sold out” by moving to a “VC Chain.” Responding to this criticism, Ruddick highlighted that the support from Celo meant that GE was now independent as it doesn’t need Celo’s help for gas fees, while at the same time the GE ecosystem will be enhanced by the benefits of being part of an established public blockchain.

Final Remarks

The move by GE to Celo makes a lot of sense, and frankly, it’s surprising this partnership didn’t happen sooner. Based on its ground game in Africa, it’s clear that Celo has a genuine commitment to the humanitarian applications of blockchain. At the same time, GE has a decade-plus track record of exploring how currency – as a technology – can be engineered to uplift marginalised communities.

Ruddick has previously shared a vision where networks of CICs are joined together via liquidity pools, allowing CIC holders to hop between communities with their value via decentralised exchanges. In his latest post, Ruddick confirmed that this plan is still on GE’s roadmap. The prospect of such an approach being tested on a major public blockchain marks GE as a project that we should continue to keep on our radar.

If you enjoyed this article, consider subscribing to our weekly newsletter, where you can find more analysis on developments in the African crypto space.

The post Kenya’s Grassroots Economics Moves to Celo first appeared on AfricanCrypto.com.

Welcome back to the African Crypto Weekly. New to this newsletter? You can subscribe here.

Africa Combined

For the week ended 27 November, Africa Combined volume on LocalBitcoins was $1.36 million, which represented an 8% improvement on the previous week’s volume of $1.26 million. Albeit at the low end, Africa Combined volume is now back inside the range it was playing in prior to the FTX shock. However, the recovery is primarily being driven by South Africa at this stage. Transactions came in at 4,318 for the week ended 27 November, which represented a 2% decline on the previous week’s count of 4,420 and marked a new low for 2022.

South Africa

SA’s volume for the week ended 27 November was $677.8K, which represented a 26% improvement on the previous week’s volume of $539.7K. Transactions came in at 1,087 for the week ended 27 November, which represented an 2% improvement on the previous week’s count of 1,063. The gap between SA & Nigeria for the top spot in YTD volume terms now sits at $334.4K, in SA’s favour.

Nigeria

Nigeria’s volume for the week ended 27 November was $345.7K, which represented a 2% improvement on the previous week’s volume of $339.8K. Transactions came in at 1,182 for the week ended 27 November, which represented a 3% decline on the previous week’s count of 1,218 and marked a new low for 2022.

Kenya

Kenya’s volume for the week ended 27 November was $213.5K, which represented a 1% decline on the previous week’s volume of $215.2K. Transactions came in at 1,379 for the week ended 27 November, which represented a 6% decline on the previous week’s count of 1,461.

Funding – Ejara

On Monday, Cameroon’s Ejara announced that it recently raised an $8 million Series A funding round co-led by Anthemis and Dragonfly Capital. Founded by Nelly Chatue-Diop, the crypto and savings platform serves users in Francophone Africa and is well-known for advocating for the use of non-custodial wallets among its users. TechCrunch reports that in October 2021, Ejara had 8K users in Cameroon and that it now has over 70K users in nine countries across Francophone Africa. Bucking crypto winter woes, the company has seen 10X revenue growth and 15% month-on-month transaction volume since October 2021. Newsletter #23 covered Ejara’s pilot program with Mercy Corps Ventures to offer tokenized government bonds to low-income individuals in Cameroon.

Pilot – Fonbnk

Speaking of Mercy Corps Ventures (MCV), on Tuesday, MCV and Fonbnk announced the launch of an educational pilot program dubbed “Learn to Earn.” The program is focused on financial and Web3 literacy and digital earning opportunities offered in Fonbnk’s ecosystem as a market maker. Fonbnk provides an on-ramp service where prepaid sim card users can exchange their airtime credits for the USDC stablecoin. Fonbnk brings airtime credits on-chain by representing them as a token called MIN, which is then convertible against USDC. Market makers are active traders on Fonbnk’s marketplace that provide liquidity for the conversions between airtime and MIN. One of the goals of the pilot with MCV is to measure whether market making is a viable source of income for economically marginalised groups.

Rebrand – Zone

Newsletter #30 covered a Nigerian fintech software company called Appzone. That edition of the newsletter went over the progress of Appzone’s layer-1 payments network known as Zone and how Appzone’s CTO had shared that “virtually all the commercial banks” in Nigeria are now signed up to Zone. This week, TechCabal reported that the company is rebranding to Zone and carving out its Banking-as-a-Service platform into a separate company named Qore. Said to be Africa’s first layer-1 blockchain network, Zone is already licensed by the Central Bank of Nigeria and compatible with the Ethereum Virtual Machine. Currently, Zone’s nodes sit at licensed financial institutions in Nigeria, but the company has set a goal to have Zone’s nodes widely distributed across the continent over the next five years.

Layoffs – Lazerpay

On Tuesday, crypto payments company Lazerpay announced that it will be downsizing its team in order to extend its runway. Lazerpay founder Njoku Emmanuel shared on Twitter that earlier this year, seed round investment talks fell through due to tough market conditions and disagreement over terms, ultimately leading to this point. The announcement also revealed that since launching in 2021, Lazerpay has enabled over 3,000 businesses to accept stablecoin payments. In November 2021, Nestcoin announced Lazerpay as its first investment.

Partnership – Algorand & Y9

On Wednesday, digital microfinance company Y9 Bank announced a partnership with Algorand Foundation – the organisation which oversees the Algorand blockchain ecosystem. The partnership will see Y9 leveraging the Algorand blockchain to deliver its mobile offerings. At present, Y9 is focused on Tanzania, but it has plans to expand to other markets in East and West Africa.

Megha Chaddah | Nigeria Seeks Distinction between Digital Assets and Crypto (Yahoo)

TechTrendsKE | More than 2000 Developers Joined the Polygon Africa Web3 Bootcamp (TechTrendsKE)

Peter Oluka | A Chat with Cassava Network Cofounder Mouloukou Sanoh on Driving Web3 Adoption in Africa (TechEconomy)

Charles Nichols | Web3 Loyalty Points: Empowering the Next Billion to Access Financial Services (Medium)

Dakar, Senegal | Dakar Bitcoin Days | 2-3 December (Twitter)

Douala, Cameroon | Binance X DevFest Cameroun | 3 December, 10am (Twitter)

Kano, Nigeria | Adaverse: Blockchain Founders Hangout | 3 December, 3pm (Techpoint)

Accra, Ghana | Africa Bitcoin Conference | 5-7 December (Afrobitcoin)

The post ACR Weekly: Ejara Raises $8M (#35) first appeared on AfricanCrypto.com.

Welcome back to the African Crypto Weekly. At the beginning of the year, it was almost guaranteed that each week, Nigeria would post a higher weekly trading volume than South Africa on LocalBitcoins. And we are talking big margins – Nigeria regularly eclipsed South Africa’s weekly volume by $250K.

Then in mid-July, something happened. South Africa started beating Nigeria’s weekly volume and never looked back. After 20 straight weeks of weekly wins, as of this week, South Africa has now taken the top spot on LocalBitcoins.

This is some fighting talk and so I double checked the trading volumes in Bitcoin terms and yes, South Africa has bought more Bitcoins than Nigeria this year on LocalBitcoins. Nigeria has faced headwinds because it’s fighting a war on two fronts – crypto winter and a Naira that has fallen ~35% against USD this year based on our data.   

A key question is how things look on other major P2P platforms, like Paxful and Binance P2P. Paxful data is public, and so more to come on this. In the meantime, let’s take a look at how things played out last week.

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Africa Combined

For the week ended 20 November, Africa Combined volume on LocalBitcoins was $1.26 million, which represented a 3% improvement on the previous week’s volume of $1.23 million. Transactions came in at 4,420 for the week ended 20 November, which represented a 2% decline on the previous week’s count of 4,517 and marked a new low for 2022.

South Africa

SA’s volume for the week ended 20 November was $539.7K, which represented a 32% improvement on the previous week’s volume of $409.2K. Transactions came in at 1,063 for the week ended 20 November, which represented an 8% improvement on the previous week’s count of 988. For the first time in 2022, South Africa now ranks above Nigeria in YTD volume terms. Note that this only applies to the LocalBitcoins platform, and further research is needed to confirm if this is happening on other P2P platforms too. The gap between SA & Nigeria for the top spot in YTD volume terms now sits at $2.3K in SA’s favour.

Nigeria

Nigeria’s volume for the week ended 20 November was $339.8K, which represented a 3% decline on the previous week’s volume of $349.7K and marked a new low for 2022. Transactions came in at 1,218 for the week ended 20 November, which represented an 3% decline on the previous week’s count of 1,253 and marked a new low for 2022.

Kenya

Kenya’s volume for the week ended 20 November was $215.2K, which represented a 41% decline on the previous week’s volume of $362.6K and marked a new low for 2022. Transactions came in at 1,461 for the week ended 20 November, which represented a 12% decline on the previous week’s count of 1,656 and marked a new low for 2022.

Regulatory – Kenya

On Monday, Kenya’s Business Daily reported that a bill seeking to introduce the taxation of cryptocurrencies had been introduced in Kenya’s National Assembly. The proposed taxes are aimed at crypto exchanges and digital wallets. The regime would tax crypto profits as income or capital gains, with profits being treated as income if the digital assets are held for less than a year, and capital gains if they are held for longer. There would also be an excise duty on all crypto transaction fees, similar to the 20% currently paid by Kenyan banks on all commissions and fees. Business Daily reports that this would be the first step by Kenya’s government towards directly regulating crypto. In a TV appearance, MP Bernard Kitur explained that the rationale behind the law is to expand Kenya’s tax base given how many Kenyans are getting involved with crypto. Also appearing in the same segment was Economist Dr XN Iraki, who stated that if the Kenyan government wants to tax crypto, it should also put measures in place for consumer protection.

Hiring – Binance

Staying with Kenya, this week, Binance announced the appointment of Nadeem Anjarwalla as Director for East Africa. Business Daily reports that Anjarwalla will lead Binance’s operations across twelve markets in the eastern region of Africa. Previously, Anjarwalla was a Partner at VC firm Global Founders Capital and also worked as a General Manager at Uber Eats prior to that. He holds a BA from the University of Oxford and an MA from Stanford.

Expansion – VALR

Last Friday, the South African exchange VALR announced the expansion of its services into Zambia. Users can now connect their Zambian bank accounts to their VALR accounts, allowing them to deposit and withdraw Zambian Kwacha from the platform. VALR also announced that users are now able to trade Bitcoin and the USDC stablecoin directly against the Kwacha. The announcement highlighted that since launch, VALR has seen $10 billion in volume for pairs that trade against the South African rand.

Launch – DoshFX

On Thursday, DIFX and eZaga announced the launch of a new Africa-focused crypto exchange, DoshFX. DIFX already operates as an exchange and allows users to trade a variety of financial assets, of which crypto is one. According to CoinMarketCap, DIFX’s crypto exchange business is ranked 67^th in the world and as of writing, the exchange saw $68.2 million in spot trading volume in the past 24 hours. eZaga is a South African digital banking platform and an authorised financial services provider in the country. The new exchange – DoshFX – is a joint initiative between DIFX and eZaga. DoshFX will utilise the crypto and banking solutions of its parent entities to deliver its services.

Partnership – Lirium & Mara

Last month, Mara announced the launch of its crypto wallet service, the Mara Wallet. This week, we got some additional technical background as to how the crypto wallet comes together. The Mara Wallet is powered by a solution provided by Lirium, a crypto infrastructure company based in Liechtenstein. Lirium provides a “plug and play” solution for digital wallet providers, allowing them to offer wallet users access to crypto without having to deal with regulatory or other operational concerns. In a press release, Lirium founder Federico Murrone shared his excitement to be working with Mara, which is his company’s first client in Africa. To date, Lirium has been focused on growing its presence in Latin America, where it boasts customers from eight countries in the region.

Layoffs – Quidax

On Thursday, Nigerian crypto exchange Quidax announced that it is laying off 20 members out if its staff of 100. TechCabal reports that the startup confirmed that that these layoffs are unrelated to the FTX fallout and are instead driven my macroeconomic conditions.

Annie Njanja | Google Clamps Down on Illegal Loan Apps in Kenya, Nigeria (TechCrunch)

Shodipo Ayomide | Understanding the Modular Blockchain Infrastructure (Blog)

IMF Blog | Africa’s Growing Crypto Market Needs Better Regulations (IMF)

Johannesburg, South Africa | Tezos South Africa Meetup, 26 November, 3pm (Quicket)

Lomé, Togo | Binance Apéro Crypto | 26 November, 5pm (Twitter)

Accra, Ghana | Africa Bitcoin Conference | 5 December (Afrobitcoin)

The post ACR Weekly: SA Takes Top Spot (#34) first appeared on AfricanCrypto.com.

MFS Africa recently signed on to use Ripple’s On-Demand Liquidity (ODL) solution for cross border transfers. ODL has seen explosive growth and the service now boasts 40 payout markets. But what is it?

On Tuesday 15 November, MFS Africa and Ripple announced a partnership that will see MFS Africa begin leveraging Ripple’s On-Demand Liquidity (ODL) solution for cross-border mobile money payments across Africa.

There’s a lot to unpack here, so let’s walk through one piece at a time.

What Is MFS Africa?

MFS Africa is a digital payments company that enables cross-border payments for remittance companies, financial service providers and global merchants. As of March 2021, MFS Africa was connected to over 320 million mobile money wallets in Africa, which at the time represented roughly 60% of all such wallets on the continent.

According to the company website, MFS Africa aims to establish a borderless payments system in Africa. To achieve this, MFS Africa has been integrating national digital payment schemes, including mobile money, to create a continental digital payment network.

Founded in 2009 by Dare Okoudjou, MFS Africa has its headquarters in Johannesburg, South Africa. Okoudjou previously worked for MTN and is originally from the West African nation of Benin. While working for the telco giant, Okoudjou led the development of MTN’s mobile payment strategy across 21 countries.

What Is Ripple?

Ripple is the company that developed the XRP Ledger, a public blockchain which has XRP as its native cryptocurrency. With a market capitalisation of $18.9 billion (as of writing), XRP is the seventh highest ranked cryptocurrency by market capitalisation, based on data from CoinMarketCap.

Ripple was founded in 2012 by David Schwartz, Jed McCaleb, Arthur Britto and Chris Larsen. Today, the company has a focus on delivering enterprise blockchain and crypto solutions, which include cross-border payments, crypto liquidity and central bank digital currencies (CBDCs).

What is On-Demand Liquidity?

ODL is a payment solution that uses the XRP cryptocurrency for international transfers. The steps described by Ripple for a transfer using ODL are as follows:

• A sending institution requests a fiat-to-fiat quote on pricing and foreign exchange from the receiving institution.

• The receiving institution sends back a quote with pre-negotiated foreign exchange margin.

• The sending institution withdraws XRP from a wallet funded by Ripple and transfers the XRP to the receiving institution via the XRP ledger.

• Upon receiving the XRP a few seconds later, the receiving institution immediately pays out fiat currency to the end-beneficiary of the transfer and in-parallel converts the XRP it received to fiat currency.

• The sending institution is invoiced at the beginning of the following week.

According to Ripple, one advantage of this approach is that speed of settlement is reduced to seconds, whereas settlement can take days in the traditional financial system.

Another advertised advantage of ODL is that it frees up working capital, since there is no need for sending institutions to leave funds sitting around in relevant accounts in other countries in anticipation of transfers (prefunding).

In 2021, total sales of XRP by Ripple in connection with ODL were $1.8 billion, a figure that was eclipsed in the first four months of 2022. At the end of Q3 2020, ODL was available in three markets, and as of Q3 2022, it now has 40 payout markets around the world.

Final Remarks

Crypto bear markets are characterised by depressed trading volumes. And yet this year, ODL has already tripled its 2021 volume before the results from Q4 2022 are in. Clearly, something is going right with this product, and so you have to wonder what sort of fireworks we could see when it’s combined with the giant footprint of MFS Africa.

An open question in all of this is how ODL fits in with stablecoins, which have also been doing well in Africa. If XRP is being used for international transfers, then clearly, XRP is in direct competition with stablecoins for that specific use case.

Yet, in a past interview, a senior executive at Ripple stated that Ripple is not looking to compete with stablecoins and CBDCs, and that XRP should be considered a “bridge asset.” Indeed, a number of stablecoin and CBDC projects are being developed for the XRP Ledger in partnership with Ripple.

In the ODL announcement, MFS Africa’s founder stated that this tie up with Ripple is just the first step in the company’s crypto strategy. If this is what the first step looks like, it’s safe to assume that MFS Africa has big ambitions for the African crypto space.

As crypto winter drags on, we will no doubt see replays of the usual “crypto has no utility” proclamations. Yet, for those paying attention, it’s apparent that the industry is marching on and the technology continues to gain adoption.

Updated 08:50, 23/11/2022.

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The post MFS Africa x Ripple: What’s On-Demand Liquidity? first appeared on AfricanCrypto.com.

Welcome back to the African Crypto Weekly. As the stream of news around FTX continues, we are learning a lot of new information about how the crypto industry is structured globally.

We’ll turn to the emerging African dimensions of the FTX fallout soon, but first, let’s take a look at how different P2P markets on LocalBitcoins responded to last week’s developments. 

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Africa Combined

For the week ended 13 November, Africa Combined volume on LocalBitcoins was $1.23 million, which represented a 21% decline on the previous week’s volume of $1.55 million and marked a new low for 2022. Transactions came in at 4,517 for the week ended 13 November, which represented a 9% decline on the previous week’s count of 4,946 and also marked a new low for 2022. While we saw new lows for both trading volume and transactions, the decline in trading activity wasn’t as sharp as one might expect given the price volatility we saw last week. The previous Africa weekly low for volume in 2022 was $1.27 million in the week ended 16 October; for transactions it was 4,662 in the week ended 23 October.

Nigeria

Nigeria’s volume for the week ended 13 November was $349.7K, which represented a 27% decline on the previous week’s volume of $478.3K and marked a new low for 2022. Transactions came in at 1,253 for the week ended 13 November, which represented an 16% decline on the previous week’s count of 1,496 and also marked a new low for 2022.

South Africa

SA’s volume for the week ended 13 November was $409.2K, which represented a 36% decline on the previous week’s volume of $642.4K and marked a new low for 2022. Transactions came in at 988 for the week ended 13 November, which represented a 21% decline on the previous week’s count of 1,252 and also marked a new low for 2022. The gap between Nigeria and SA for the top spot in YTD volume terms now sits at $197.5K as of the week ended 13 November, down from $257.1K in the previous week.

Kenya

Kenya bucked the trend in the Big Three, coming in with a volume of $362.6K for the week ended 13 November, which represented a 26% improvement on the previous week’s volume of $288.6K. The week ended 13 November is only the second time this year on LocalBitcoins that Kenya has posted a higher weekly volume than Nigeria. Transactions came in at 1,656 for the week ended 13 November, which represented a 12% improvement on the previous week’s count of 1,482.  

FTX – Nestcoin

Last Friday’s newsletter touched on FTX’s significant presence in Africa and how it was feasible that we would see knock-on effects on the continent. We didn’t have to wait long, as on Monday, Nestcoin – a prominent Web3 project from Nigeria – revealed that a large portion of its funds had been stored on FTX when the exchange filed for bankruptcy.

Additionally, Nestcoin shared that the company would be reducing its headcount in order to reposition the company. The Financial Times later confirmed that Nestcoin held roughly the remaining $4 million out of the $6.45 million it raised earlier this year on FTX.

FTX – AZA Finance

When FTX filed for bankruptcy last Friday, a list of 134 corporate entities from around the world were named as part of FTX Group. To the surprise of those familiar with payments in Africa, the list contained 23 entities belonging to African payments company AZA Finance (formerly BitPesa). AZA Finance CEO, Elizabeth Rossiello, was quick to release a statement that AZA Finance is entirely independent of FTX and that she was “shocked and disappointed” that AZA Finance entities were named as part of the FTX Group.

Rossiello also shared that AZA Finance would be correcting the court filings. We don’t yet have clarity as to how a separate company was mixed up as part of FTX, but recent reports of poor record keeping practices, including incomplete lists of bank accounts and employees, may offer an explanation. In March of this year, FTX and AZA Finance had announced a commercial partnership where FTX would leverage AZA Finance’s infrastructure for payments in Africa.

FTX – Ovex

On Wednesday, Ovex, a leading South African prime broker and market maker for crypto, revealed that it had terminated its relationship with FTX. According to MyBroadband, FTX was able to offer its margin trading products in South Africa by effectively piggy-backing on Ovex’s Financial Service Provider license. Some may recall that Binance stopped offering margin trading services in South Africa in October 2021 due to requests from regulators.

FTX was able to continue with such services because it was appointed as a “juristic representative” of Ovex. MyBroadband reports that Binance was only able to relaunch margin trading in South Africa in September 2022 following a similar arrangement with Fivewest OTC Desk. On the Moneyweb podcast which aired earlier this week, Ovex CEO Jonathan Ovadia shared that FTX owns 8% of Ovex, which Ovex aims to buy back. Ovadia also confirmed that no Ovex customer assets were held on FTX but roughly 5% of Ovex’s company funds were held on FTX when it declared bankruptcy.

Launch – Modus

On Wednesday, Modus, which is described by TechCrunch as a “New York-based venture platform,” announced the launch of Modus Africa, a $75 million VC fund primarily targeting seed-stage AI and blockchain start-ups in sub-Saharan Africa. An eye-catching statistic in Modus’ announcement is the prediction that Africa has the potential to exceed 200 million new blockchain users over the next four years. Earlier this year, Singapore-based crypto payments firm Triple-A estimated that there are currently 53 million crypto users in Africa.

Launch – Ripple

In what would otherwise be the top crypto story on the continent in most weeks, Ripple announced its expansion into Africa on Tuesday. Ripple is partnering with MFS Africa, which is described on its website as a digital network that connects “over 320 million mobile money wallets [in Africa] to enable cross-border payments for remittance companies, financial service providers, and global merchants.”

According to the announcement, MFS Africa will leverage Ripple’s On-Demand Liquidity solution (which uses the XRP cryptocurrency for transfers), to facilitate real-time mobile money payments across borders. MFS Africa CEO, Dare Okoudjou, described the partnership with Ripple as the “first step for our crypto strategy to leverage blockchain technologies to amplify our impact on consumers and businesses on the continent.” Launched in 2012, Ripple belongs to the older generation of crypto companies. It is the company behind the XRP ledger, which has XRP as its native cryptocurrency. As of writing, XRP is the 7^th largest cryptocurrency by market capitalisation ($19.3 billion).

Hilary Allen | Beware the proposed US crypto regulation — it may be a Trojan horse (Financial Times)

Will Canny | BofA: Don’t Tarnish Blockchain Technology With Speculative Crypto Trading (Coindesk)

Kodzilla | Kenya’s Data Protection Office to Investigate Public Data Abuse Complaints Against 54% of Digital Lenders (BitKE)

Nairobi, Kenya | Cardano Blockchain Founders Hangout | 23 November, 3pm (Twitter)

Lomé, Togo | Binance Apéro Crypto | 26 November, 5pm (Twitter)

Accra, Ghana | Africa Bitcoin Conference | 5 December (Afrobitcoin)

The post ACR Weekly: The Saga Continues (#33) first appeared on AfricanCrypto.com.

A weekly round-up of P2P Bitcoin trading activity across the top 10 African markets on LocalBitcoins. Charts showing long term trends can be found here.

Africa Combined: For the week ended 13 November, Africa Combined* volume on LocalBitcoins was $1.23 million, which represented a 21% decline on the previous week’s volume of $1.55 million and created a new low for 2022. Transactions came in at 4,517 for the week ended 13 November, which represented a 9% decline on the previous week’s count of 4,946 and created a new low for 2022.

Nigeria: Nigeria’s volume for the week ended 13 November was $349.7K, which represented a 27% decline on the previous week’s volume of $478.3K. Transactions came in at 1,253 for the week ended 13 November, which represented an 16% decline on the previous week’s count of 1,496.

South Africa: SA’s volume for the week ended 13 November was $409.2K, which represented a 36% decline on the previous week’s volume of $642.4K. Transactions came in at 988 for the week ended 13 November, which represented a 21% decline on the previous week’s count of 1,252. The gap between Nigeria and SA for the top spot in YTD volume terms now sits at $197.5K as of the week ended 13 November, down from $257.1K in the previous week.

Kenya: Kenya’s volume for the week ended 13 November was $362.6K, which represented a 26% improvement on the previous week’s volume of $288.6K. Transactions came in at 1,656 for the week ended 13 November, which represented a 12% improvement on the previous week’s count of 1,482.

Morocco: Morocco’s volume for the week ended 13 November was $11.1K, which represented a 60% decline on the previous week’s volume of $28.1K. Transactions came in at 45 for the week ended 13 November, representing a 13% improvement on the previous week’s count of 40.

Tanzania: TZ’s volume for the week ended 13 November was $31.9K, which represented a 20% decline on the previous week’s volume of $40.1K. Transactions came in at 163 for the week ended 13 November, which represented a 10% decline on the previous week’s count of 182.

Egypt: Egypt’s volume for the week ended 13 November was $14.8K, which represented a 16% decline on the previous week’s volume of $17.7K. Transactions came in at 89 for the week ended 13 November, which represented a 2% decline on the previous week’s count of 91.

Botswana: Botswana’s volume for the week ended 13 November was $14.8K, which represented a 36% decline on the previous week’s volume of $23.0K. Transactions came in at 150 for the week ended 13 November, which represented a 31% decline on the previous week’s count of 218.

Zambia: Zambia’s volume for the week ended 13 November was $7.1K, which represented a 25% decline on the previous week’s volume of $9.5K. Transactions came in at 46 for the week ended 13 November, which represented a 30% decline on the previous week’s count of 66.

Angola: Angola’s volume for the week ended 13 November was $1.3K, which represented a 27% decline on the previous week’s volume of $1.8K. Transactions came in at 14 for the week ended 13 November, which represented no change against the previous week’s count of 14.

Ghana: Ghana’s volume for the week ended 13 November was $1.6K, which represented a 172% improvement on the previous week’s volume of $596. Transactions came in at 16 for the week ended 13 November, which represented an 81% improvement on the previous week’s count of 29.

* Africa Combined is the aggregate of 20 African markets on LocalBitcoins that we currently aggregate data on. USD volumes are USD equivalent, meaning they are converted from local currency volumes.  

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The post This Week in P2P #46 first appeared on AfricanCrypto.com.

In addition to the damage caused by the alleged mismanagement of user funds, FTX will leave behind a gap in the African crypto ecosystem.

The events we witnessed over the past week in the crypto space were nothing short of stunning. Last Friday, FTX exchange filed for bankruptcy. A key question is how one of the world’s largest crypto exchanges ended up in this situation.

The facts are evolving rapidly, but the emerging consensus is that FTX lent up to $10 billion in customer assets to its affiliated trading arm, Alameda Research. As to what Alameda did with these funds, one explanation provided in a New York Times article published on Monday is that the funds were used to repay loans that Alameda took to make “venture capital investments.”

Some commentators have questioned this explanation, arguing that Alameda’s VC investments were not large enough to account for all the missing funds.  

Nigeria’s Nestcoin Comes Forward

After FTX filed for bankruptcy and it became clear that users will face a long process to recover any remaining funds held by the exchange, speculation was rife as to what the resulting fallout will be for the crypto industry.

The African ecosystem didn’t have to wait long to find out, as on Monday 14 November, Nigeria’s Nestcoin revealed that a large portion of its funds were stored on FTX. Additionally, Nestcoin confirmed that the company would have to reduce its staff in order to reposition the company. The Financial Times later reported that Nestcoin held the remaining $4 million out of the $6.45 million it raised earlier this year on FTX.

Given FTX’s strong presence in Africa, Nestcoin is unlikely to be the only entity that will be impacted by the developments at FTX. Up and down the continent, individuals from different walks of life will face adverse consequences due to decisions made at FTX’s HQ in the Bahamas. This is the first blow delivered on users in Africa by the fall of FTX.

The Loss of a Key Player

The second blow that the collapse of FTX delivers is the exit of a key player in the African ecosystem. FTX faces serious allegations, which should be dealt with in accordance with the law. Yet, it can’t be denied that the brand was active at the grassroots of African crypto in a way that few crypto brands of its stature are. As one observer put it, “FTX had a good ground-game in Africa.”

Here, much credit can be given to FTX’s former PR & Marketing Manager, Harri Obi, who earnestly spearheaded slick campaigns that won the hearts and minds of users across Africa.

As the saying goes, crypto moves fast, and so we can imagine that other players will move in to fill the gap and provide options to users who seek an alternative to Binance. However, you have to wonder how long it will be before another player matching FTX’s ground-game will show up.

If you enjoyed this article, consider subscribing to our weekly newsletter, where you can find more analysis on developments in the African crypto space.

The post FTX’s Collapse Marks a Double Blow for Users in Africa first appeared on AfricanCrypto.com.

A look at how five mining-related projects in Africa are integrating crypto into their business models.

Mining is a key industry in Africa, and as blockchain adoption spreads on the continent, it’s no surprise that projects are emerging at the intersection of mining and crypto. This article looks at four approaches to tokenisation used by five mining-related projects on the continent.

Namibia: Uranium-Backed NFTs

In early October, a Canadian company called Madison Metals announced it had entered into an arrangement to tokenise up to 20 million pounds (~9,070t) of uranium from its mining interests in Namibia. The arrangement was carried out via a forward sales contract between Madison Metals and Lux Partners. The latter operates Lux Network, which is described as a “a decentralized network of blockchains providing institutional-grade, regulatory-compliant access to digital money and real world assets.”

Since 15 October, the Uranium-backed NFTs have been available for purchase on Lux Network and are currently trading at a discount to the market spot price of uranium. If all 20 million pounds are sold at the current price of $45/lb of uranium, that would total $900 million.

Once they purchase the NFTs, Lux users are able to borrow against them via a Lux-issued credit card. Alternatively, users can sell the NFTs on any NFT marketplace or hold them until the uranium is mined and the NFTs are converted into Lux’s upcoming uranium tokens.

South Africa: Zambesi Gold

Zambesi Gold is a company that was founded in 2021. In January 2022, the company carried out an initial token offering of “ZGD” on Binance Smart Chain. Following the token offering, Zambesi Gold acquired Middelvlei mine, which is located 38km west of Johannesburg and expected to begin gold production this December.

Per the business model, 25% of the “profit gold” from Zambesi’s mining operations is deposited with a custodian while the other 75% is re-invested into the acquisition of new mines. The gold held by the custodian is what backs the ZGD token. At any time, holders of ZGD can redeem their proportional share of the gold held by the custodian, following which, their tokens are destroyed. Additional gold added to the vault after this will accrue to the remaining token holders.

Central African Republic: Project Sango

The Central African Republic (CAR) made headlines earlier this year when it announced that it would tokenise its natural resources as part of Project Sango. Since then, Sango has run into some legal issues with CAR’s top court challenging the constitutionality of the plans to sell citizenship. In an email update on 2 October, the Sango team communicated that discussions are ongoing between relevant stakeholders to find the best path forward.

The email update also highlighted how the legal framework for the tokenisation of natural resources was close to completion. Based on the Sango website and whitepaper, what we know so far is that CAR’s approach to resource tokenisation will involve proposals by the government to Sango app users with respect to investment in specific mining projects. From there, users who wish to invest in these projects can lock up specific amounts of Sango coin as collateral in the app “in order to participate in the tokenisation process.” Dividends from the mining projects are paid back to users through the app and the app will also feature a marketplace for users to trade their interests in projects.

Keeping It in the Ground

A set of projects pursuing a novel approach in this already cutting-edge space are those that seek to tokenise natural resources in order to prevent their extraction. Examples of such projects include Qommodity in Sierra Leone and Element United, which has tokenised interests in Tanzania.

Such approaches seek to monetise the preservation of in-ground deposits via tokenisation. Many resources are simply mined in order to be stored in a vault. As such, an argument can be made that it’s better to spare the environment and leave those resources in the ground while we trade their digital representations that are based on geological disclosures.

On one hand, it may be hard to escape the feeling that one is trading nothing as compared to when we know there is a physical asset in a vault somewhere ready to be liquidated. On the other hand, the spirit of sustainability behind these projects means they should at least get the benefit of the doubt and be left to market forces to determine their viability.

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The post Emerging Models of Tokenising Natural Resources first appeared on AfricanCrypto.com.