South Africa's Ice3X crypto exchange

Africa and Crypto: Leapfrogging into a Decentralized Future

Africa could become the scene for the most widespread adoption of cryptocurrency and blockchain technologies. Just as much of the continent skipped wired telephones for mobile, crypto could fill the gaps in Africa’s financial systems.

This overview of Africa and crypto will give you a snapshot of some of these exciting developments.

Blockchain Trends in Africa

A recent United Nations report on blockchain technology in Africa, describes the many obstacles to integrating cryptocurrencies and distributed ledger technologies in Africa’s economies. Despite the proliferation of mobile phones, household internet penetration is still only 23%. Low electrification rates and high costs inhibit energy-intensive proof-of-work activity. Regulatory uncertainty exists everywhere. The 54 countries in Africa, however, are not coordinating the kinds of change needed to foster blockchain continent wide.

Despite these obstacles efforts to deploy decentralized technologies are underway all over Africa. Forward-looking government officials are supporting entrepreneurs and local tech companies while also considering solutions from crypto companies around the world. By bringing more people into the formal economy, blockchain technologies could unleash new drivers of growth across Africa.

Engaging the unbanked

Africa leads the world when it comes to mobile payment systems, but that success was driven by necessity. Banks, for example, have not reached most of the African population. Consultancy McKinsey recently estimated that less than a third of Africans have bank accounts and retail banking only amounts to 38% of Africa’s GDP. Even though Africa’s banking sector is the fastest-growing in the world, it may take five years for banking to reach even half of the continent’s population.

At the same time, mobile adoption in Africa is rising with more than 420 million unique mobile subscribers  — that’s 30% more people that the entire US population. The adoption of mobile technology has also placed Africa at the forefront of mobile finance innovation. The most famous of Africa’s mobile payment services is M-Pesa. Developed by Kenyan wireless service Safaricom, M-Pesa now processes billions of electronic payments and remittances every year.

Rwanda’s blockchain payment system

Rwanda will be the first site of a blockchain-based alternative to M-Pesa. Norwegian fintech company Blockbonds developed a mobile payment system called SPENN. It uses blockchain technology to support free peer-to-peer money transfers and retail point-of-sale services.

“We are going to markets to enable people to easily transfer money from one another as well as pay for bills,” Blockbonds CEO Jens Glaso told The New Times at the official launch in Rwanda. Future rollouts will target Botswana, Kenya, Mauritius, Namibia and Tanzania.

However, the SPENN system isn’t a replacement for banking. I&M Bank Rwanda is a key partner in the effort. “I think we are one of the first banks in Rwanda and Africa to use technology like this, to replace physical currency with digital currency,” I&M managing director Robin Bairstow said at the press conference.

The potential to bring new customers into the banking system drives I&M’s interest in blockchain-based services. The app promises to make payments easier and more affordable than the bank’s traditional products.

Establishing credit

Twiga blockchain credit scores
Source: Twiga

Closely tied to the low participation in the banking system is the lack of well-documented personal and business credit histories. This prevents respectable businesses from getting the loans they need to expand and hire more people. Individuals struggle to get loans for cars and houses that could improve their lives.

A pilot project underway in Kenya uses a blockchain-based service to build trusted, verifiable credit histories for retail merchants.

Kenyan startup Twiga Foods distributes fresh food from wholesalers to retailers in a country where many shopkeepers still go to the market themselves. Twiga’s challenge is providing the retailers the credit they need to make purchases.

Twiga connected with IBM to solve this problem using blockchain technology. When retailers enter an order through Twiga’s mobile app, the blockchain app instantly evaluates the retailer’s creditworthiness. “Once the credit score is determined,” IBM researcher Isaac Markus explained, “we used a blockchain, based on the Hyperledger Fabric, to manage the entire lending process from application to receiving offers to accepting the terms to repayment.”

The 8-week pilot project’s average loan was 3,000 Kenyan shillings, or about $30. But those small loans let retailers order 30% more product and increased the shopkeepers’ profits by 6%.

“If you put the whole transaction history on the blockchain,then you have something that doesn’t change forever and you are forming the history,”  IBM Research Kenya executive Solomon Assefa told Bloomberg. “This information allows the banks to expand their reach, the shopkeeper to access credit and the farmer to access the market.”

Land reform and property lending

Another impediment to economic growth in Africa is an unreliable record of land ownership. Traditional communal ownership, the legacy of colonialism and a rocky history of corruption makes property records unreliable. People can’t always prove that they own the land where they built their home or business years ago. Without documented proof, mortgages and business loans become more difficult for banks to award.

Rwanda plans to change that by moving its entire paper-based land registry onto a blockchain-based platform. The Swiss cybersecurity company developing this system, WiseKey, says the decentralized registry will be a more “open, transparent and publicly verifiable system.”

A similar project is underway in Ghana where the American company Bitland is piloting a land registry on the Bitshares blockchain. “We can together make use of arable lands in developing countries and potentially unlock millions of dollars making Africa a healthier economy,” Bitland CEO Narigamba Mwinsuubo explained to Modern Ghana last year.

More recently, Mwinsuubo explained to Reuters that most land ownership in Ghana is handled through oral agreements. “We’re looking to map the whole of Ghana,” Mwinsuubo said adding that “once we’re able to register these … banks will grant loans and mortgages to families.”    

African-borne Blockchain Projects

Chamapesa social financing
Source: Chamapesa

A few of the African crypto exchanges we’ll look at in the next section have issued tokens as part of their fundraising. Relatively few blockchain-based applications, however, have appeared on Africa’s crypto scene.


In East African culture, a chama is an informal savings and investment group. Usually organized by women, the chama serves a similar function to banks in a region where banks are scarce. The chama model is similar to the informal savings clubs you’ll find all over the world.

Chamapesa is a blockchain-based app designed to serve the one million chamas in Kenya. “Creating a digital record of transactions makes bookkeeping more transparent,” the Chamapesa website explains, “which reduces error, fraud and theft.”

A report in Bitcoin Kenya cited Chamapesa’s co-founder, Michael Kimani, who said the company is on track to release the app in late 2019.

TMX Global Coin

TMX Global Coin is a blockchain-based logistics project that hopes to simplify Africa’s import/export systems. TMX’s pre-ICO runs through October. The development of its Ethereum-based distributed app has already begun with a planned launch next spring after the public ICO.

“We are using Blockchain technology to enhance Cargo logistics business to have more open, transparent and democratic process,” TMX Global Coin CEO Anthony Njoroge told Kenya’s Daily Nation.

Crypto Exchanges and Remittance Services in Africa

Chankura exchange - Africa and crypto
Source: Chankura

Africans can access global crypto exchanges. They can also do business with local Bitcoin traders selling through peer-to-peer marketplaces like Paxful and LocalBitcoin. But Africa has an expanding ecosystem of homegrown businesses that provide crypto-based financial services.


Kenya-based BitPesa is a remittance firm that makes international transfers easier and cheaper. Founded in 2013 in Nairobi, BitPesa has attracted funding from Pantera Capital, Draper Associates and other prominent crypto investors.

The world’s system for international money transfers is cumbersome and expensive. The money has to move through a fragmented series of correspondent banks and intermediary banks. Each step adds time and cost to the transfer. African companies may have to wait 2 weeks for their funds to transfer and often pay fees as high as 10%.

When Africans deposit their money in a BitPesa account and request a transfer to another country, BitPesa converts the fiat into crypto. BitPesa’s office in the other country converts the crypto into the local currency and deposits it into the customer’s foreign account. The transaction can take as little as an hour and costs only 10% of what most remittance services currently charge today.

Thanks to BitPesa’s relationships with banks throughout Africa, the Americas, Asia and Europe, BitPesa’s customers can quickly and affordably transfer money anywhere in the world. BitPesa serves customers in the Democratic Republic of the Congo, Ghana, Kenya, Morocco, Nigeria, Senegal, Tanzania and Uganda.


Golix was Zimbabwe’s largest crypto trading platform. Founded in 2015 by Tawanda Kembo, media reports estimate the exchange grew to support more than 50,000 Zimbabweans.

This changed in May when Zimbabwe’s central reserve bank banned all of the country’s banks from processing crypto transactions. The central bank also tried to shutdown Golix, but Zimbabwean courts overturned the decision.

With crypto trading at home severely restricted, Golix expanded to Kenya, South Africa and Uganda. A successful initial coin offering raised $32 million, which the exchange plans to use for further expansion across Africa.

“Since the onset, our main agenda is to provide financial autonomy in Africa,” Golix special projects lead William Chui told Bitcoin.com, “The GLX token is going to be used to facilitate and realize this agenda.”


The newest entry among Africa’s cryptocurrency exchanges is KuBitX. The company is still going through its initial coin offering. A public beta of the KuBitX trading platform is underway ahead of a late 2018 launch and the public crowdsale. The exchange will roll out in Nigeria first, followed quickly by Angola, Botswana, Ghana, Kenya, South Africa, Uganda and Zimbabwe.

KubitX’s goal is to “bridge the gap between banked and unbanked in Africa” by engaging communities directly and educating them about cryptocurrency’s benefits. This is similar to the community-based approach that made mPesa so successful.

The exchange’s co-founders are themselves founders of other African exchanges. CEO Eric Annan founded Digitalkudri, and exchange that serves Nigeria and Ghana. Amadeu Alexandre, the head of IT Operations, co-founded Angolan trading platform AngoBit.

The rest of KuBitX’s leadership is a pan-African team with extensive experience at Fortune 500 technology companies and consulting firms.


South Africa’s iceCubedX is an exchange for trading bitcoin, ethereum and litecoin with the South African rand and the Nigerian naira.

Trading fees on iceCubedX for low-volume traders range from 0.5% to 1.0%. While that may seem steep compared to global exchanges, the large crypto players that accept fiat transfers only do so in dollars or euros. iceCubedX lets South Africans and Nigerians avoid the costs of converting to the dollars or euros. High volume traders can see their trading fees fall as low as 0%.

iceCubedX voluntarily complies with South Africa’s know-your-customer (KYC) and anti-money-laundering (AML) regulations, so requires its customers to go through a verification process.


Another South African exchange, Chankura, supports more than 40 cryptocurrencies with flat 0.1% trading fees. Although the exchange has customers all over Africa, residents of South Africa are able to deposit rands directly into their accounts.

One feature that differentiates Chankura from other African exchanges is its support for new ICO listings for tokens based on the Bitcoin or Ethereum blockchains.

Final Thoughts

This is only a small taste of what is happening in Africa’s crypto scene, but it shows that Africa has the potential to become a leading site for blockchain adoption.

Regulators in America and Europe are dragging their feet when it comes to crypto. Well-established financial institutions are also taking their time. For them, blockchain technologies don’t offer a clear benefit over their well-established systems.

Africa’s inefficient financial infrastructure, however, makes blockchain-based alternatives much more appealing. Mobile technology let Africa quickly replace the old telephone system. Now, blockchain technology could let Africa quickly create an entirely new decentralized financial system.


Christopher Casper

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