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The State of Bitcoin in South Africa



State of Bitcoin in South Africa

Also known as the Rainbow Nation, South Africa is not only an economic giant in Africa but also has a thriving bitcoin ecosystem and tops the list of African countries with the highest adoption of bitcoin. This is evidenced by the Google Trends charts that shows South Africa sitting at the top as well as the country’s bitcoin trading volumes and thriving local bitcoin economy.

South Africa has a well-established bitcoin ecosystem that consists of local exchanges, blockchain startups, meetups, educational programmes as well as a bitcoin-friendly regulator.

The country is also home to one of Africa’s largest blockchain technology conference, which is held every year in Johannesburg. Already in its fourth year, the Blockchain Africa Conference has continued to experience an increasing number of attendees since its establishment. The conference attracts speakers from various countries globally to speak on matters affecting the blockchain and cryptocurrencies in Africa and beyond.

Bitcoin Startups in South Africa

South Africa is home to two of the largest bitcoin exchanges in the continent, Luno (formerly known as BitX) and Ice3x. Besides the exchanges, the startup scene in South Africa is booming and has companies that are utilising the blockchain and bitcoin to help solve various societal needs.

The Sun Exchange was founded on the need to electrify remote countries in Africa as well as promote the use of clean energy. The Sun Exchange peer-to-peer marketplace enables investors to purchase solar panels for projects in Africa and pay using bitcoin. They can then lease them out to public bodies such as schools and in return, earn monthly rental income. With this, The Sun Exchange ensures both the investors benefit – by getting their investment back in form of monthly income – and the community gets access to clean energy.

Another startup, Custos Media, making use of blockchain technology to fight piracy. The South Africa-based startup aims to eliminate media piracy by adding bitcoin deposits to digital files. Known as digital bounties, Custos Media can detect and track pirated content using an invisible watermark that is embedded in the digital content. In the event, the watermarked files end up on platforms that they are not supposed to be, the person who found the file receives a bitcoin reward.

Bankymoon, a startup and blockchain consultancy firm, designed a smart energy meter for power and utility bill payments. The smart energy power meter makes it possible for South Africans to pay and top up their power meters using bitcoin and other cryptocurrencies. Well-wishers can also help needy schools pay their utility bills using the smart energy power meters.

GeoPay is another South African startup that has leveraged the blockchain and allows individuals to send and receive money at affordable rates. GeoPay uses the blockchain to process the payments allowing for users to instantly make cross-border remittances with no barriers whatsoever.

Bitcoin Use in South Africa

Startups are not the only companies leveraging the blockchain and cryptocurrencies in South Africa. Traditionally, bitcoin has been used as a form of investment. However, this is beginning to change as more organisations are allowing for various payments of goods and services to be paid using digital currencies. South Africa has more than 30,000 merchants who accept bitcoin payments. This has been made possible by PayFast, a digital payments processing company that integrated bitcoin payments back in 2014.

Additionally, Pick n Pay, a leading South African grocery retailer, is an example of a retail chain that allows shoppers to pay for their grocery shopping using bitcoin. All that customers need to do is scan their QR code using their bitcoin wallet app on their smartphone.

Fines4U, a traffic offence assistance company, has now made it possible for South Africans to pay for their traffic fines using bitcoin. Fines4U makes it possible for individuals to make the payment by calculating all their traffic offence charges and giving them an opportunity to clear all their pending payments using bitcoin for a limited period of time.

OneDayOnly is another e-commerce store that is considering making it possible for customers to pay using bitcoin to provide their clientele with a better user experience. Other notable e-commerce platforms that accept bitcoin payments include and Checkout, among others.

South Africa has also become the first country in the African continent to conduct an equity deal using bitcoin.

South Africa’s Cryptocurrency Regulatory Framework

One of the key drivers of bitcoin adoption in any country, especially in Africa, is having a bitcoin-friendly regulator. This is the case for South Africa. The SARB has recently started testing out a regulatory framework for cryptocurrencies in the country and has so far been very accommodating towards digital currency startups within its jurisdiction. This move comes after they had indicated earlier in February that they would carry out a research about the blockchain viability in the country.It is also worth mentioning that back in 2014, SARB released a position paper stating that they did not regulate or supervise cryptocurrencies and that all risks associated were to be borne by the end users.

On the other hand, the South African Revenue Services (SARS), is researching ways to track cryptocurrencies to ensure all digital currency investment profits are adequately taxed. The SARS is planning to work with the SARB to analyse and link the in and outflow of funds in the country vis-a-vis the movement of goods. This will enable them to have visibility on all information and ensure nothing stays hidden.

The laissez-faire approach of the South African central bank towards bitcoin has been highly beneficial for its local bitcoin economy. This should be seen as an example for other African nations, such as Kenya and Namibia, where regulators have taken an opposing stance towards decentralised cryptocurrencies.


Nigeria Wants Regulatory Framework for Cryptocurrencies



Nigeria Regulatory Framework Cryptocurrencies

With cryptocurrency adoption soaring in Nigeria, it is no surprise that on April 25, 2018, members of the House of Representatives, urged the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Commission (NDIC) to create a legal framework for the regulation of blockchain technology.

The resolve was passed following the adoption of a continuous motion titled ‘Need to regulate blockchain applications and Internet technology’, which was supported by Solomon Adaelu, who emphasised the innovation that the blockchain brings such as the potential to accelerate payments in the country’s financial services industry.

Adaelu said: “Blockchain as a digital and decentralisation ledger technology that records all transactions without the need for financial intermediary bank is new to humanity and can be a core payment facilitator for financial services industry. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography as an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”

The blockchain was invented in 2008 for the cryptocurrency bitcoin. Since its establishment, it has helped solve the issue of double spending on digital currency transaction without the need for a central server or trusted authority.

Adaelu went on to state that the deadline for a unified cryptocurrency regulation had been set for July 2018 following the G20 Finance Ministers’ meeting in March.

He further added: “Countries such as the USA, the UK, Russia, Venezuela, and Kenya have [already] provided [a] framework for the regulations of this emerging technology,” and believes that Nigeria should be next in line to do so.

Other lawmakers supported the motion while acknowledging the warning given by the NDIC to be careful when trading cryptocurrencies, given the complexity and uncertainty surrounding them.

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Binance Partners with Blockchain Innovation Hub in Uganda to Promote Economic Development



Binance in Uganda
Image by Binance

Binance, a global cryptocurrency exchange, has partnered with Crypto Savannah, Made in Africa initiative, and Msingi East Africa to promote economic development and youth employment in Uganda using blockchain technology. The partnership aims to achieve these goals by “creating thousands of jobs and bringing investments to Uganda.”

Made in Africa initiative and Msingi East Africa are organisations that are dedicated to the economic transformation of African countries while Crypto Savannah is a newly created African blockchain innovation hub.

According to Trading Economics’ data, the employment rate in Uganda stood at 47.80 percent in 2012 compared to 88.30 percent in 2009. The broad use cases for blockchain technology have the potential to change these statistics for the better by providing innovation opportunities for young people.

Changpeng Zhao, CEO and founder of Binance, announced these plans on Twitter and hinted at the possibility of Binance getting more involved in African projects.

Binance’s initiative is believed to have peaked at a recent meeting with the Blockchain Association of Uganda (BAU) where Zhao interacted with the local blockchain community and promised to support and train young entrepreneurs leveraging the blockchain. He also advised young entrepreneurs to offer solutions that are going to improve the lives of the society.

“Binance is tailor-making partnerships according to the environment. We want to understand the landscape and grow our understanding of the market.”

Zhao’s meeting with BAU will be followed by the Africa Blockchain Conference 2018 which will be held in Kampala in May.

Blockchain Technology is Gaining Momentum in Africa

The Binance initiative is just one of the several upcoming blockchain-based projects that are taking place in Africa. For instance, the World Food Program recently announced a partnership with Devery to make food delivery to Tunisian school children safe. Furthermore, the World Blockchain Summit held in Nairobi last month has helped to open doors for global blockchain companies to establish themselves in Africa.

In view of the Binance initiative, Africa could attract more global blockchain companies in the future as the technology continues to take root on the continent.

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BitMari Conducts First Test Remittance on the Bitcoin Lightning Network



BitMari Bitcoin Lightening Network

Zimbabwean startup BitMari has managed to successfully conduct its first Bitcoin Lightning Network test transaction with Tanjalo, a bitcoin startup from Lagos, Nigeria. The transaction signals a shift for remittances in Africa as users can soon expect almost instant low-cost bitcoin remittances.

Fast Transactions, Low Fees

BitMari is a Zimbabwe-based bitcoin company that leverages blockchain technology to expand into new remittance markets for the African diaspora. The startup was founded in 2015 by Sinclair Skinner and Christopher Mapondera to address the challenges faced by Zimbabweans when sending money overseas and vice-versa. In 2017, the company made history by becoming the first bitcoin enterprise to receive a money transfer license from the Reserve Bank of Zimbabwe. The company also formed a strategic partnership with Agribank to handle remittances for their customers using bitcoin.

Tim Akinbo, the co-founder and CTO of Tanjalo, was able to transfer $15 from Nigeria to a recipient in Zimbabwe through the BitMari platform using bitcoin. He believes the almost instantaneous money transfer will be instrumental in transferring value and promote cohesion by bridging local communities. The company is excited about the new development especially after successfully setting up the Lightning nodes.

Skinner, who is an ardent supporter of the adoption of bitcoin and blockchain technology in Africa to solve everyday challenges, stated:

“BitMari’s quick adoption of Lightning is active use of Bitcoin and Blockchain technology to solve real World challenges facing Africans on the continent and in the diaspora; such as costly remittance fees.”

The Bitcoin Lightning Network

The Bitcoin Lightning Network (LN) is a system built on top of bitcoin that enables people to send and receive payments instantly, and lower transaction costs by bypassing the blockchain. The Lightning Network’s use of payment channels lets users transact with each other directly without having to broadcast their business to the entire network. Currently, the Lightning Network is growing after being launched a short while ago on main-net by the Lightning Labs team.

BitHub Africa, a Nairobi-based blockchain accelerator of which BitMari is a member, has published a guide on how someone can go about setting up a Bitcoin Lightning Node on a cheap computing device called Raspberry Pi. The device can be used to process transactions by anyone with the resources and skills to host the node.

For now, BitMari is searching for other Lightning nodes to connect to their own. The company is also focusing on improving its user experience to increase adoption of its services and pass on the benefits of fast and affordable remittances to its customers.

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