Connect with us

Blockchain Technology

The State of the Blockchain in Uganda

Published

on

Blockchain in Uganda

Uganda is home to a growing cryptocurrency community. The capital Kampala was host to the Africa Blockchain Conference in May, which attracted a number of local and international blockchain enterprises and highlighted the country’s ambitions in becoming a blockchain hub. This article will explore the state of the blockchain in Uganda including the regulatory climate, notable startups and what the future may hold for the blockchain in the East African country.

The Potential for the Blockchain in Uganda

The blockchain is a decentralised, immutable and public digital ledger that records transactions across a distributed network of computers, which makes it de facto impossible to alter any records without altering all subsequent blocks or getting consensus from the network. Blockchain technology has gained global attention as it aims to build trust into systems used for transfer of value and any kind of data.

Digital currency adoption in Uganda has been on the rise with a number of investors, freelancers, and entrepreneurs in the space. In addition, the Blockchain Association of Uganda organises regular meetups and events where cryptocurrency enthusiasts can discuss opportunities and address challenges.

Regulatory Stance Concerning Blockchain Technology

Blockchain in UgandaDespite a growing cryptocurrency presence in the country, local regulators have not warmed up to the use of digital currencies. The Bank of Uganda has in the past warned against the use of cryptocurrencies like bitcoin citing the lack of consumer protections and a proper regulatory framework to govern their use. The central bank also warned investors about investing in MLM schemes like OneCoin, which are quite pervasive in Uganda.

However, things seem to be changing with policymakers and leaders looking to embrace blockchain technology and reap its benefits.

During the Africa blockchain Conference held in May the President of Uganda, Yoweri K. Museveni urged the Bank of Uganda to be more receptive about cryptocurrencies and to research on its potential benefits. He publicly endorsed blockchain technology explaining it would be useful for critical areas of the economy such as food production, service industry, manufacturing just to name a few.

Also, the Ugandan ICT minister announced at the conference the setting up of a Blockchain Taskforce to review the opportunities presented by blockchain, challenges, and advise the government on how best to utilize the technology. The setting up of the taskforce shows regulators in Uganda are becoming more receptive towards blockchain technology and its many applications.

Blockchain Startups in Uganda

There are a number of local and international startups that are harnessing blockchain technology to solve local problems in Uganda. While the Bank of Uganda’s position on cryptocurrencies remains unchanged, the regulator has given cryptocurrency trading platforms some leeway to operate.

This has given local entrepreneurs an opportunity to open cryptocurrency exchanges to serve the growing retail market. One such exchange is known as CoinPesa. Founded in 2018, CoinPesa is a cryptocurrency exchange and wallet that was formed to serve the needs of the global market while also providing access for the African user. The Kampala-based startup seeks to solve problems African users face when using international exchanges such as high fees and need for bank accounts. The company improves the user experience by integrating with familiar local payment methods such as mobile money and agency networks. CoinPesa also plans to release a utility token to be used on the exchange through an ICO slated for Q3/2018.

Apart from local exchanges, Ugandans will soon be able to trade cryptocurrencies on the leading global digital currency exchange Binance. The platform has launched a new cryptocurrency exchange in Uganda that enables crypto-fiat trading in local currency. The move comes nearly two months after Binance formed a partnership with CryptoSavannah, Made in Africa initiative, and Msingi East Africa to promote development in Uganda.

Wala, a blockchain powered platform that intends to offer barrier-free banking solutions to the unbanked in emerging markets, launched its money transfer app in Uganda. The zero fee app provides users with access to remittance services, credit and savings solutions on the platform. The services are enabled by the Dala token, which facilitates near instant micropayments at no fees. The company partnered with Spire to pre-install Wala in over 30 million smartphones across its markets. In addition, Wala partnered with Block Commodities, FinComEco, and the Dala Foundation to lend $10 million worth of Dala tokens to small-scale farmers in Uganda.

CryptoSavannah is another blockchain organisation in Uganda that is at the forefront of spearheading initiatives that promote blockchain technology in Africa. The organisation is forming strategic partnerships with the government, private sector, and international sponsors to develop the local blockchain space and thus create jobs and opportunities.

The Future of Blockchain in Uganda

Warnings from regulators against the use of cryptocurrencies have not slowed down Ugandans’ appetite for acquiring digital assets. With high unemployment rates witnessed among the youth in the country, many Ugandans are turning to digital currencies like bitcoin for investment and trading.

Furthermore, the Ugandan Government is looking to leverage blockchain technology to improve efficiency in public service delivery and provide easier access to critical public services.

In light of the success of the recent Blockchain African Conference in Kampala, combined with Binance’s arrival in the country and the launch of several new local blockchain initiatives, it would not be surprising to see more local blockchain startups emerge as well as international blockchain startups entering this market. This, in turn, would help to boost digital currency adoption and the development of value-adding blockchain solutions for Ugandans.

Blockchain Technology

Temasek Partners with SGX to Launch Singapore’s First Security Token Offerings Platform

Published

on

Bitcoin Remain dominant

Temasek Holdings, recently partnered with the Singapore Stock Exchange (SGX) to launch iSTOX, a security token offerings (STO) platform. This move marks the first of such services in a country and is yet another example of the rising stock of security tokens within the general cryptocurrency ecosystem.

Raising Capital Via STOs

According to finews.asia, SGX, and Temasek recently invested in iSTOX, the country’s first STO platform. Reports indicate that iSTOX will function as a capital market, allowing entrepreneurs to raise business capital through the sale of security tokens.

Commenting on the development, Danny Toe, CEO of ICHX – the operators of iSTOX, said:

The demands of the next generation of investors and issuers will be different, and this calls for a shift in how we should approach the process of capital funding. Utilising blockchain technology, iSTOX is able to offer STOs and address needs of both investors and issuers which are not adequately met today.

STOs differ from ICOs in that the latter involves the sale of tokenized securities. Many experts believe that STOs will provide the necessary regulatory compliance needed for blockchain-based crowdfunding.

Fiat Deals Only

The iSTOX platform will deal only in fiat transactions for the sale of tokenized securities. Despite being a blockchain-based platform with associated smart contract protocols, iSTOX is technically not a cryptocurrency exchange. Thus, the platform will not list ICO tokens or popular cryptocurrencies like Bitcoin, Ether, XRP, etc.

According to available reports, ICHX is currently pursuing licensing from the country’s Monetary Authority. Once granted, iSTOX will begin offering the issuance and trading of STOs. Also, the platform plans to provide access to liquidity in the form of a secondary trading service. Fiat currencies will be used to facilitate all the transactions on the platform.

The Emergence of Security Tokens in the Cryptocurrency Narrative

Bitwise 10 Crypto Index TokenSTO platforms are fast becoming a common feature of the evolving cryptocurrency ecosystem. While ICOs undoubtedly captured the imagination in 2017, stricter regulations in many countries coupled with numerous incidences of fraud seem to be dampening the ICO craze.

In its place, STOs present a more regulatory compliant form of blockchain-based fundraising. In places like the United States, for example, regulators say that most ICOs are selling securities in the guise of utility tokens. However, STOs, being securities, must comply with laid down rules and regulations.

In 2018, numerous STO platforms have emerged. The growing consensus is that security tokens could upstage utility tokens providing a more assured entry point for mainstream investors to come into the cryptocurrency space.

Continue Reading

Blockchain Technology

Mauritius Gets First Blockchain Securities Exchange And Will Award Digital Custodian Licences

Published

on

Blockchain Securities Exchange

Mauritius will soon start issuing custodian licenses to companies holding digital assets on behalf of their clients because the current licensing regime is not suited for that purpose. Moreover, Mauritius is about to receive its first blockchain securities exchange.

Digital Asset Custodian Licenses

The Financial Services Commission (FSC) of the Republic of Mauritius released the draft framework intended for the fintech companies. They define “digital assets” as electronic tokens representing the holder’s access rights to a service or ownership of an asset. The FSC is currently accepting feedback on the proposal from industry representatives, stakeholders and the public. With the discussions and consultations going on till the end of November.

The FSC considers them a digital representation of value which can be a medium of exchange, the unit of account and store of value. The tokens can also represent assets such as debt or equity in the promoter or “provide access to a blockchain-based application, service or product.”

Mauritius FlagCurrently, the two kinds of licenses for traditional financial services the FSC provides do not support the specifics of safekeeping cryptographic assets. The proposed license is, therefore, specific to address this difference and comply with the current relevant regulations and laws.

One requirement includes an obligation to “have and maintain a minimum stated unimpaired capital of not less than 500,000 Mauritian rupees ($14,409.64).” Businesses wanting to apply for the license will need to have offices set up in Mauritius and also have permanent representatives to deal with the FSC as well as maintain records of the custodian. The boards of directors will need three members and up, “at least one of whom shall be resident in Mauritius.”

Additionally, those providing the custodian service providers will be required to have insurance protection for the assets that are kept in custody. They are subject to providing evidence of such arrangements to the FSC. They must also have systems in place that ensure compliance with all reporting requirements under Mauritian law.

Mauritius Receives a Blockchain Securities Exchange

As a result of Mauritius’ openness to digital assets, Mindex, GMEX Group and Hybrid Stock Exchange Corporation Limited (HYBSE) have partnered to create Mauritius’ first blockchain securities exchange. The joint venture – called HYBSE International Marketplace – plans to “integrate blockchain solutions and technology with traditional financial industries providing a complete and governed ecosystem that digitalises assets onto the blockchain.”

“As we embark on a journey to pave a previous uncharted way forward, this will inevitably create an ideal prospect to move the evolution of all financial systems, light-years ahead. We must also maintain a conscious belief of the power of this evolutionary step, as not to disrupt current global markets, but to rather bolster a new way of thinking that encompasses a decentralised and truly free market entity,” HYBSE’s operations manager, Daniel Liu, said.

The firms claim SMEs will be able to use the marketplace for an initial blockshare offering (IBO), such as block-shares, from businesses registered on the marketplace at “special discounted rates”. IBO is a time-limited offer to purchase cryptonised equities and other cryptonised instruments.

Asset classes that will be facilitated for trade will include cryptonised shares, cryptonised currencies, commodities, indices, forex, ETCs (exchange-traded commodities), ETFs (exchange-traded funds), and CETFs (crypto exchange-traded funds).

Continue Reading

Blockchain Technology

Microsoft Partners with Interswitch to Launch New Blockchain-Powered Supply Chain Financing Platform in Nigeria

Published

on

Interswitch

Pan-African payments and commerce company, Interswitch Group, partnered with Microsoft to launch a new blockchain-backed supply chain financing service in Nigeria.

Seamless Supply Chain Financing

This new blockchain initiative will bring together different stakeholders – such as banks and corporations – on a single platform that will provide end-to-end visibility, ensuring fast, seamless trade financing in supply chain operations.

Interswitch Blockchain Service is said to be built and hosted using the Microsoft Azure blockchain solution, which provides proven security, compliance and also a scalable cloud platform that accelerates and supports next generation blockchain applications. 

Interswitch“In our 15 years of operation, we have experienced the bottlenecks associated with the existing corporate-based financing infrastructure in Nigeria.” Mitchell Elegbe, Group Managing Director and Chief Executive Officer at Interswitch, said.

“This is why we are happy to partner with Microsoft, by leveraging the advanced technology of the Microsoft Azure Blockchain, to prove the possibility of building a distributed ledger that is practical, viable and has the propensity to solve some of Nigeria’s most difficult financial and logistic problems,” he added.

Launching the Interswitch Blockchain Service (Supply Chain Finance Module) allows small and medium-sized enterprises (SMEs) access to more funding in a shorter time of up to three weeks. The participating banks include United Bank for Africa Plc, Guaranty Trust Bank Plc, and Zenith Bank Plc.

SMEs will also be able to enjoy increased sales cycles from participating corporations such as the Dangote Group.

Transaction Enquiries and Verifications

The Interswitch Blockchain Service does not deploy the use of cryptocurrency in its application. Instead, transaction inquiries and verifications will be authorised by officials from participating entities without the incentives of a cryptocurrency.

Principal Program Manager, Microsoft Azure Blockchain at Microsoft Corporation, Michael Glaros, expressed excitement about the partnership with Interswitch. Glaros said: “The blockchain technology is still in its infancy in Nigeria and we are happy to pioneer its deployment in partnership with Interswitch, an innovative and forward-thinking company which has evolved its business around financial technology.”

“This will be the first enterprise-grade blockchain service in Nigeria, and one of only a handful of production blockchain applications in use by banks and corporates globally,” Glaros added.

The Interswitch Blockchain Service, allows Nigerian lenders and suppliers to identify and build relationships with high performing entrepreneurs. Therefore, according to Mitchell, the platform allows anyone to build blockchain-based solutions easily and more cost-effectively.

Continue Reading

Popular Posts