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Bitcoin Africa’s 2018 Cryptocurrency Outlook

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2018 Cryptocurrency Outlook

2017 has been an incredible year for cryptocurrencies. In 2017, we witnessed the price of bitcoin rallying from $1,000 to over $20,000 as the digital currency has finally gone mainstream as an investment. We also witnessed a massive boom in initial coin offerings, which have raised billions of dollars for new blockchain projects. In the past twelve months, we have also witnessed a massive jump in bitcoin adoption across Africa fuelled by increased global and local media coverage of the digital currency and the desire to make money with cryptocurrencies.

In this 2018 Cryptocurrency Outlook, we will discuss what the future will likely bring for digital currencies and blockchain technology in Africa in the coming year.

More Altcoin Investing

Bitcoin investing has boomed on the continent as LocalBitcoins trading volumes for countries such as Kenya, Nigeria, and South Africa show. WhatsApp and Telegram groups have also become popular means of facilitating local bitcoin trade in countries where local exchanges are lacking. More and more Africans have been investing in bitcoin in the hope you generate a strong investment income and those who invested earlier this year were rewarded.

In 2018, there will likely be an increase in altcoin trading as bitcoin investors are now looking to diversify their portfolio and to invest in coins that have the potential to become the next bitcoin.

Leading African exchanges such ICE3X, Luno, and Golix have added altcoins such as litecoin and ether to meet the newfound demand for bitcoin alternatives. This trend will very likely continue in the coming year.

African ICOs

In 2017, hundreds of initial coin offerings were launched globally. However, only a small handful was launched in Africa and none of them managed to receive much attention nor raise a substantial amount of funds.

In 2018, we will see more local blockchain projects venture down the route of launching a token sale to fund their operations. Local entrepreneurs will have learned from the successes and failures of ICOs in the past year to launch successful token sales, which could result in the successful funding of truly value-adding African blockchain projects.

More Public Sector Blockchain Projects

In Kenya, there are already several public sector blockchain projects underway. From government bond issuance and electronic motor vehicle identification to healthcare data management, there are several blockchain trials happening in the East African nation while in Sierra Leone, there is a blockchain-powered ‘smart country’ project underway.

In 2018, we will likely see more blockchain adoption in the public sector across Africa. Areas such as land ownership, identity management, academic record keeping, and the electoral process are ripe for disruption by bitcoin’s underlying technology.

Tax Authorities Will Want Their Piece of the Bitcoin Pie

In light of the incredible increase in the value of cryptocurrencies, the tax authorities around the world have now woken up to the fact that they can be collecting capital gains tax on cryptocurrency investment income. This will also become the case in African countries with larger bitcoin communities.

In South Africa, the SARS has already announced that it plans to track digital currency trades to ensure that South Africans are appropriately taxing their crypto assets investment income. Tax authorities in other countries will likely follow suit in the coming year.

More Conferences and Meetups

2017 has seen an unprecedented amount of bitcoin meetups and blockchain conferences on African soil. Large conferences were held in South Africa, Ghana, and Nigeria and regular meetups have occurred across the continent to encourage people to learn more about bitcoin and blockchain technology. Blockchain technology and its potential for Africa have even been discussed at a UN conference in Ethiopia.

In 2018, there will likely be more conferences and meetups as Africa’s interest in digital currencies, as well as blockchain technology, is growing.

Innovative Blockchain Solutions for Local Challenges

The year 2018 will likely also see more innovative blockchain solutions from local startups that address local challenges. From more local bitcoin exchanges that enable users to buy and sell cryptocurrencies using local currency to bespoke blockchain solutions such as the ChamaPesa app, more local startups are expected to develop value-adding blockchain-based solutions for Africa.

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Kenya’s Financial Institutions Want Blockchain-Based Financial Products Approved

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blockchain-based financial products

Dr. Patrick Njoroge, the Governor of the Central Bank of Kenya (CBK) revealed that the central bank is receiving several applications from financial institutions in Kenya soliciting the approval and licensing of blockchain-based products and services.

His statement comes at a time when most financial institutions in the country are busy trying to find ways of addressing the disruption caused by blockchain technology. As it stands, both market regulators and key industry players in the financial sector are considering regulations and guidelines for the blockchain, virtual currencies, and online forex trading.

Speaking during a gathering of investment professionals, Dr. Njoroge said: “A number of banks are currently working on products (and services) hinged on blockchain technology and we think that they offer a lot of promise. We are not anti-innovation or anti-cryptocurrency. We support innovation but are concerned about the impact on financial instability and the inherent risks. CBK is working with central banks all over the world to identify the risks and find ways to mitigate them. The weakest link is where problems in our financial system will start.”

The blockchain was initially designed as an underlying technology for cryptocurrencies such as bitcoin but has over the years been utilised to help streamline the delivery of products and services in different sectors by governments and corporates.

Alternative Investment Schemes

The move by financial institutions in Kenya to solicit for the approval of blockchain comes two months after Joe Mucheru, Kenya’s Cabinet Secretary for ICT announced a blockchain taskforce that was formed to give recommendations on how the government can leverage the blockchain.

Dr. Njoroge went on to say that most online forex trading transactions tend to happen outside the central bank of Kenya’s jurisdiction. Last year saw Kenya’s Capital Markets Authority issue new regulations meant to curb risks that are linked to online forex and cryptocurrency trading. So far, there only exists one firm in the country that has an online foreign exchange license.

The National Treasury’s Director General, Public Investment and Portfolio Management, Esther Koimett, said there is a special interest by the national treasury on issues that affect the financial sector in Kenya and that alternative investment opportunities are progressively becoming crucial in resource mobilisation. She went on to add: “Last year the government launched the M-Akiba Bond as an alternative way for Kenyans to invest in Government Securities. Such alternatives need to be encouraged.”

A speech read on behalf of Bernard Ndung’u, the chairman of the Public Sector Accounting Board (PSAB) by Lazarus Kimang, stated: “Due to the ever-changing investment environment, there is a need to improve and continuously enhance the skills of financial analysts employed within government institutions. This will ensure that public sector entities are provided with sound advice on investment alternatives and strategies that derive them maximum returns.”

The PSAB chairman went on to share his concerns about other investment schemes that would make people vulnerable to fraud cases as well as the difficulty that financial market players would encounter in assessing different investment opportunities such as bitcoin.

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UNICEF Invests in Blockchain-based Early Child Development Startup Amply

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UNICEF Invests in Amply

The UNICEF Innovation Fund has announced its first investment into a South African startup called Amply, which leverages blockchain technology to better manage early childhood development services.

Founded on the IXO blockchain protocol, Amply is a UNICEF-backed application that is creating a universal shared ledger for impact data. Early child development (ECD) centers can record and validate pre-school attendance claims. The government of South Africa is then able to exchange these claims with subsidies, which create accountability and makes the funding process more transparent.

Based in Switzerland, the IXO blockchain is a project that is building the needed technology for the impact investment space. Its technology is meant to scale impact measurement as well as allow for the invention of digital assets known as Impact Tokens that are supported by verified impact data.

The Amply Platform

The Amply system enables every child to have a mobile digital identity that verifies their existence, records the history of their education and enables them to receive the benefits that they deserve. Known as the digital identity protocol, the system is already changing the way pre-school children are registered in South Africa.

AmplyThe system has been built in such a way that it stores the digital identity and personal details of each individual child privately allowing only for the child or their parent to have control. Since the pilot was launched in 2016, about 85 ECD centers have recorded over 61,000 digital attendance, especially in the Western Cape region. Pre-school teachers, through a verifiable claim format, are now able to collect data on attendance through the mobile application developed by Amply, as part of a pilot project. The verifiable claim format is a systematised template that allows for the exchange and use of information across datastores, which helps break down information silos between various stakeholders. The validated attendance claim is then tokenised as a digital asset that a given ECD center can exchange for subsidy grant funding from the government.

According to TechBullion, the digital data captured by Amply has metadata – location, date and time of collection – that has a mathematical proof marking that proves the claim comes from a given origin. This way, the data has a built-in error checking that makes it possible for an external authority to validate the entry without the need to know what is contained in the data. The mathematical proof tied to the metadata is free from any tampering.

In most ECD centers today, teachers are forced to use a paper-based system that cannot be verified. As such, the centers are forced to submit lengthy attendance reports whenever they need to claim subsidies for the services rendered to the Department of Social Development. The government is, therefore, forced to spend a massive amount of time in auditing the attendance reports which makes it a long and expensive process. Besides, stakeholders such as NGOs, ECD centers, the government and other institutions are unable to utilise the information available in the analog reports to come up with comprehensive analytics and program optimisations.

However, with the availability of the global data ledger by Amply, all stakeholders can now have access to crucial information such as where and how the services are being delivered which will help them to plan better and allocate resources. Besides, the data ledger has brought about increased trust in the funding ecosystem which has resulted in increased funding for needy children while saving the administration money and time.

While education is the main focus for Amply at the moment, there is excitement for potential applications that will tackle access to government subsidies, healthcare, food and other goods and services sector. Data collected via Amply has the potential to help improve the consistency and quality of services that South Africans receive. And for Amply, it is just the beginning as they are looking to expand to more schools in the country to help the more than 3.5 million children that are currently not receiving pre-school education.

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BlockCerts Targets Africa Through New Blockchain Strategic Alliance in Mauritius

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Blockcerts Blockchain Strategic Alliance Mauritius

BlockCerts has announced the formation of a Blockchain Strategic Alliance in Mauritius to target the African market.

BlockCerts, a private blockchain platform developed by Seattle-based Finaeos, will be promoting blockchain initiatives in Africa in partnership with Rogers Capital, the fintech arm of the Mauritius-based Rogers Group.

Timothy Vasko, founder and chief architect of BlockCerts, said in a press release: “This is an exciting step for BlockCerts. Through our operations in Mauritius and working with the team of Rogers Capital, we will be bringing new blockchain innovation and infrastructure functions, to generate new opportunities for growth, inclusion, and advantage to the African population businesses, and governments as blockchain evolves to serve the combined population 1.3 billion people.”

According to the World Bank, Mauritius is the easiest place to do business in Africa while the African Development Bank has rated the Island as the most competitive on the continent. The country is also aiming to become the new Singapore by becoming an investment and trade hub for global investors wishing to set up their operations in Africa.

Mauritius also showed its determination in becoming a trade hub when it joined 43 other African nations in signing the African Continental Free Trade Area (AfCFTA) signed in March 2018.

“We are excited to begin operations with Rogers Capital, as the market potential for building blockchain infrastructure is massive when considering the 2.5 billion people who are seeking new inclusion and opportunity in [the] supply chain, payments, and fintech, which can all be served on the BlockCerts blockchain,” Vasko stated.

Vasko also said BlockCerts’ sister companies have been incorporated and operating successfully in India as technology providers for five years. The company has now expanded to Africa where it will provide the continent with technology platforms from its operations in Mauritius.

“This area is committed to becoming a world force, improving the lives of millions, and enhancing trade and transparency through blockchain. We couldn’t [be] more excited to bring BlockCerts forward with our partners from Mauritius,” he added.

“We are very pleased to have the involvement of BlockCerts with Rogers Capital in bringing blockchain to our Corporate, Technology and Financial services – while we continue on the path to pursue new opportunities. […] Blockchain is the next big wave that will propel the world stage forward. We are committed at Rogers Capital, to be a leader at the head of the surf with BlockCerts to power our blockchain initiatives,” said Rogers Capital CEO Kabir Ruhee.

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