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
Despite 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.
Zippie Rolls Out Blockchain-Based Mobile Solution for Africa
Blockchain startup Zippie has rolled out a blockchain-based mobile solution for Africa in collaboration with Zambia’s AfriDelivery, Musanga, and Tigmoo. The three online companies will use the Zippie mobile blockchain platform to reward their customers for making purchases, giving referrals, and using delivery services.
Rewarding Customers via Zippie
AfriDelivery, Musanga, and Tigmoo will start rewarding customers with airtime using the Zippie blockchain-based mobile platform enabling them to have more customers and to maintain the most loyal ones.
The rewards wallet is accessible on the companies’ websites or apps allowing customers to receive airtime in their blockchain wallets. Customers can also send this airtime to other people by sharing a payment link through chatting apps like WhatsApp and Facebook Messenger.
“We are focusing our efforts on the continent where even the smallest earning opportunity can make the biggest impact. The rapidly growing smartphone adoption and online commerce, the young entrepreneurial population of which most work in the informal sector, and the leadership in taking mobile money into use offer a fertile ground for Zippie to take off on the continent,” said Pasi Rusila, COO and co-founder of Zippie.
Zippie is a white label super app whose goal is to democratise opportunity for everyone by enabling online businesses to reward their users.
Scaling Zippie’s Adoption in the African Market
According to Rusila, the first three partnerships will help Zippie to sell its blockchain solution to other online businesses.
“The market entry provides us the opportunity to get the Zippie platform to the hands of thousands of end-users within months. This enables us to gather the always-so-critical user feedback and steer the product development in the right direction, fulfilling genuine market needs,” he stated.
The company is confident that Zippie will have a positive impact on the lives of Africans by seamlessly transferring value between businesses and people.
“We are pleased to say that there are numerous other partnerships in the pipeline in several countries ready to start rewarding their users with mobile airtime and other valuable items,” Rusila added.
With Zippie, users are guaranteed security, the elimination of middlemen, and free sharing of rewards. On the hand, the process of integrating Zippie with a product is easy. Businesses are, therefore, assured of a seamless integration process.
According to UNCTAD, e-commerce in Africa is still lagging behind compared to the rest of the world. Zippie could be a solution that pushes more Africans to shop online.
Medici Land Governance Signs MoU with Liberia’s Ministry of Finance to Digitise Government Services
Medici Land Governance (MLG) has signed a memorandum of understanding with the Ministry of Finance and Development Planning in Liberia. The aim of the agreement is to explore the potential for the digitisation of current government services and the creation of e-government platforms.
The Pilot Project
The pro bono pilot project will support the Pro-poor Agenda for Prosperity and Development (PAPD) and the Pillar II (Economy and Jobs) in the PAPD agenda. This is agenda is a Liberian government initiative.
Additionally, the pilot project will investigate how to shift Liberia to a digital and blockchain-focused economy and how to enable interoperability among government services.
MLG will also train Liberians through knowledge transfer as well as create jobs during the initial phase of gathering data and after the implementation stage where trained personnel will be needed to maintain the system.
Through the pilot project, Liberia joins countries like Rwanda and Zambia who are undertaking blockchain projects in partnership with MLG.
Ali El Husseini, the CEO of MLG, said: “Medici Land Governance’s work is a major component of Medici Ventures’ goal to create ‘a blockchain tech stack for civilization. Liberia is well-positioned to explore implementing a blockchain backbone for e-government, which connects the various government ministries as their services are digitised and brought online. This pilot project is an excellent opportunity for Medici Land Governance to demonstrate how we can tailor our products and services to the needs of Liberia’s government and economy.”
MLG is a blockchain subsidiary of Overstock Inc., a Utah-based online retailer and technology company.
Digitising Liberia’s Economy
According to the Minister of Finance and Development Planning, Samuel Tweah, the agreement with MLG is a sign that Liberia is ready to digitise its economy and move government services to a digital platform.
“We believe that the free pilot project when implemented, will showcase Liberia’s readiness to digitise the economy and migrate to an e-government platform that will facilitate full interoperability of the Government of Liberia services and systems,” he said in a press release.
Medici Ventures aims to introduce blockchain technology to existing markets in order to “eliminate middlemen, democratise capital, and re-humanise commerce.”
Patrick M. Byrne, Chairman of MLG and founder and CEO of Overstock, observed: “In 2019, I have been pleased and honoured to see African nations growing enthusiastic about the possibility of using blockchain to accelerate their development. Liberia now becomes the third African country to agree to give [our suite of blockchain-based land governance products] a try.”
South African Reserve Bank to Conduct Central Bank Digital Currency Feasibility Study
The South African Reserve Bank (SARB) is set to conduct a central bank digital currency (CBDC) feasibility study according to an expression of interest (EOI) issued on April 29, 2019. Through the EOI, SARB is looking for solution providers to offer technological infrastructure and skills to the project.
The CBDC Feasibility Project Charter
Developed in May 2018, the CBDC Feasibility Project Charter aims “to investigate the feasibility and desirability of central bank issued digital currency to be used as electronic legal tender, complimentary to cash.”
Additionally, the purpose of the feasibility project will be finding out how issuing a CBDC can support SARB’s vision of leading “in serving the economic well-being of South Africans through price and financial stability.”
The establishment of this project was as a result of a mandate the Currency Management Department of the SARB gave in 2016. The order required the selected team to investigate the case of a CBDC issued and backed by SARB.
According to the expression of interest, the CBDC feasibility project will be carried out in a contained innovation lab environment. The innovation lab will comprise of software, technical skills, infrastructure, and business skills. However, SARB makes it clear that the CBDC feasibility project is exploratory in nature and does not constitute any long-term plan or commitment to issue a government-backed digital currency.
The study only focuses on issuing the CBDC as an electronic version of cash as opposed to a universally accessible form of central bank reserve money or a central bank issued version of commercial bank account money.
CBDC Project Stages
The feasibility project will be carried out in the innovation lab in two stages. The first stage will be internally conducted and will entail testing principles, validating the feasibility of recommended technical solutions, and increasing the body of knowledge.
The second stage will extend participation to external banks and mobile network operators and potentially to payment service and niche technology providers. In addition, the set of use cases will be increased to incorporate the full value chain so as to establish the possibility of the solution to satisfy SARB’s objectives.
In the EOI, SARB makes it clear that there is no preference of basing the project on a distributed ledger technology platform, the blockchain, or existing traditional technology.
“It is envisaged that a solution could be based on any one or a combination of technologies,” SARB explains.
Some of the policies that will guide CBDC include:
- Only SARB must issue the CBDC as legal tender
- Commercial banks must issue the CBDC under SARB’s regulatory oversight
- Must enable the issuance and distribution of CBDC to commercial banks or licensed service providers
- CBDC must be issued on a one-on-one parity with the rand
- CBDC transactions must be free or low-cost to consumers
- CBDC must provide an incentive to increase its use
- CBDC must be accepted as a means of payment by all businesses and the government
- Consumers must be able to make transactions with CBDC without the need for a bank account
- CBDC must not be easily counterfeited
- CBDC must be scalable
- It should be possible to cancel a CBDC serial number that is proven to be a counterfeit
The CBDC feasibility project comes after the successful trial of SARB’s blockchain-based Project Khokha. Once the project is complete, SARB will decide on the next steps to take based on the outcomes.
Applications of the expression of interest will close on June 6, 2019, at 11:30 am.
Bet With Bitcoin
Humaniq Doubles Number of Nations Where it Brings Global Unbanked Better Options
Places in Africa Where You Can Find a Bitcoin ATM
EcoHack Africa 2018 Aims to Build Blockchain-Based Green Economy Platform for Africa
Kenya’s RideSafe to Receive $140,000 in Funding from Aeternity Starfleet Incubator
Humaniq Wins Online Vote for Blockchain Economic Impact, Beating Competition from Hundreds of Startups
Bitcoin Loophole – Another Crypto Scam to Avoid
5 Ways to Earn Free Bitcoin Cash (BCH)
Top 5 Best Bitcoin Apps That Enable You To Earn Cryptocurrency
“Bitcoin Gold Wants to Bring Mining Back to the People as per Satoshi’s Original Vision” – An Interview with BTG’s Community Manager for Africa
What is Particl and Why Should You Know About It? – An Interview with “Crypto Ramble”
Press Releases9 months ago
Humaniq Doubles Number of Nations Where it Brings Global Unbanked Better Options
Altcoins1 year ago
Humaniq Global Challenge Winners Go To Kenya
Altcoins1 year ago
Humaniq Brings Financial Inclusion to Five More Countries in Africa
Press Releases12 months ago
Humaniq wants YOU for Hack.Summit (Blockchain)
Bitcoin1 year ago
Kenyans Are Among Highest Bitcoin Holders Per Capita According to Citi Report
Bitcoin1 year ago
Meet Africa’s Youngest Blockchain Entrepreneur: Token Media’s Elisha Owusu Akyaw
Altcoins1 year ago
5 Ways to Earn Passive Income with Cryptocurrencies
Blockchain Technology1 year ago
Nigerian Blockchain Startup SureRemit Raises $7 Million in Biggest African ICO To Date