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Weekly Roundup: Kenyan Digital Service Tax Will Not Affect Crypto Adoption

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Digital Service Tax

In this week’s news roundup, you will learn about the new Digital Service Tax in Kenya and what it could mean to crypto companies. We have also highlighted other top crypto stories from Africa.

Kenyan Digital Service Tax Will Not Affect Crypto Adoption

The Digital Service Tax (DST) in Kenya has been in effect since January 1, 2021. The tax affects anyone that derives income “from services offered in the digital marketplace.” Some of the products that the tax authority is currently targeting are event tickets sold online, e-books, subscription-based media, and movies.

Kenyan bitcoin policyAt the moment, it is unclear whether crypto companies will be part of the 1000 firms the taxman is targeting. Even if they are, however, stakeholders do not think the tax will deter crypto adoption in the country.

Speaking to Cointelegraph, the country representative of the crypto exchange Bitzlato said:

“With regards to it having a negative impact on crypto adoption in Kenya, I do not believe so as there are so many factors that are driving the rapid growth of crypto in East Africa and the youth are on the forefront pushing this.”

Individuals and companies will pay 1.5 percent of the gross transaction value as the Digital Service Tax. According to the Kenya Revenue Authority (KRA), the Digital Service Tax affects both residents and overseas companies.

“For residents and companies with a permanent establishment in Kenya, the Digital Service Tax will be an advance tax that they will offset against the income taxes due in the course of the financial year. For non-residents and companies without a permanent establishment in the country, the Digital Service tax will be a final tax,” KRA stated in a publication.

That said, crypto regulation in Kenya still seems a far way off. Nevertheless, a regulatory sandbox is in existence. It accepts blockchain companies but does not admit companies dealing with cryptocurrencies.

Binance to Hold Blockchain Week in February

Starting February 1, 2021, Binance will hold a virtual conference dubbed “Binance Blockchain Week.” The five-day event will include live panels, keynote speeches, and a hackathon.

Speakers will include Binance CEO Changpeng Zhao, Chainlink Co-Founder Sergey Nazarov, and the Co-Founder of the Acala Network, Bette Chen.

You can register for this event here.

Electroneum’s Expansion Plans Face Barriers

As Electroneum expands electricity and airtime top-up services with crypto to more African countries, it has come across a significant challenge. According to the head of business development Nigel Pooley, mobile network operators and electricity companies are reluctant to embrace crypto.

“There is very little appetite for crypto amongst these two industries. […] They believe the risks have yet to outweigh the benefits,” he told Cointelegraph.

As they pursue direct partnerships with mobile network operators and electricity companies, Electroneum is working with third-party agents in Africa. These agents are crypto-friendly, hence allowing them to facilitate ETN-based airtime subscriptions and bill payments. ETN is the company’s cryptocurrency.

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Weekly Roundup: Bitzlato Adds Lemonade Finance, NFT Initiative AFEN Partners with Quidax

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In this week’s news roundup, we will cover the new partnership between Bitzlato and Lemonade Finance and other top crypto stories.

Bitzlato Adds Lemonade Finance

Bitzlato, a peer-to-peer (P2P) crypto exchange and a new entrant in the African market, has added Lemonade Finance as a payment method. The partnership will enable users to buy and sell crypto on the platform at zero fees.

Furthermore, Nigerian users can now send Naira to MPesa at zero cost. They can also send local currency to users in Ghana and other countries at no cost.

“This partnership will provide a much-needed gateway that enables the markets we serve to seamlessly interact with each other in a borderless and open environment. We seek to break the barriers that presently exist for cross-border transfers and enable our users to generate value through the opportunities that accrue from cryptocurrency trading,” said Mike Lunov, the CEO of Bitzlato.

Lemonade Finance is a payment platform that facilitates borderless payments within and outside Africa.

NFT Initiative AFEN Partners with Quidax

AFEN Partners with QuidaxThe first government-backed NFT initiative in Africa, AFEN, has partnered with crypto exchange Quidax. The collaboration will allow AFEN to list its token on the exchange.

The AFEN initiative wants to use blockchain technology to revolutionise opportunities in Africa with a focus on arts, education, and real estate. AFEN is using Binance Smart Chain (BSC) for its project.

“We will have the exclusive right to mint legacy African arts upon the launch of our NFT marketplace, adding value to Africa’s art. The $Afen token will be used for transactions on the NFT marketplace. We will release a new roadmap that will include the development stages of its NFT platform as well as extensive tokenomics,” the company recently said.

Crypto Demand on PayPal Exceeds Expectations

According to PayPal CEO Dan Schulman, the demand for crypto on the platform has exceeded their expectations. The payment platform announced the buy and sell crypto service in October 2020. The service became available in November 2020.

“Demand on the crypto side has been multiple-fold to what we initially expected. There is a lot of excitement,” he told TIME Magazine.

He also said that in ten years, the use of cash and credit cards will go down because financial transactions will be taking place through smartphones.

“When all of those things start to happen, then central banks need to rethink monetary policy as well because you cannot just issue more paper money into the system because people are not using paper money,” Schulman explained.

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Weekly Roundup: Binance Announces NFT Marketplace Plans, Cryptolocally Launches Crypto Academy

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2021 is the year of non-fungible tokens. The NFT release in memory of Chadwick Boseman and TIME Magazine’s plans to integrate NFTs are some of the recent proofs. This week, Binance announced plans to launch an NFT marketplace. To learn more about this upcoming launch and other top stories, please read on.

Binance Announces Plans to Launch NFT Marketplace

Binance has announced plans to launch an NFT marketplace in June 2021. The company wants the marketplace to become the biggest non-fungible token trading platform, allowing users to mint, buy, and sell NFTs.

Binance wrote: “We aim to create an intuitive digital platform, bringing together artists, creators, and crypto enthusiasts from around the world. Furthermore, Binance NFT will share the same account system as Binance.com.”

Binance will charge a one percent nominal fee, and creators will get a one percent royalty fee for all subsequent sales.

CryptoLocally Acquires Finance Bridge Trading Academy

Finance Bridge Trading AcademyThe world’s first truly decentralised P2P trading platform, CryptoLocally, has recently revealed its acquisition of Finance Bridge Academy, Africa’s fastest-growing online trading school.

With this acquisition, CryptoLocally has launched the CryptoLocally African Academy to enable its African users to learn more about cryptocurrencies and crypto trading.

“Africa is home to millions of tech-savvy youth who are very eager and receptive to technological innovations, especially for innovations that may give them the opportunity to achieve financial freedom and stability. Needing and eager to learn, they are the perfect demographic to introduce this burgeoning asset class that will revolutionize financial services in the near future and step towards a more equitable financial system in the region,” says Hugo Campanella, co-founder of CryptoLocally.

Cardano Deploys Blockchain Project in Ethiopia

Cardano has collaborated with the Ethiopian government to deploy “a blockchain-based student and teacher ID and attainment recording system.” This system will verify grades and monitor performances remotely.

The identity solution, Atala PRISM, will create immutable records across 3,500 schools, five million students, and 750,000 teachers. The system will also reduce grade fraud and enable employers to verify the grades of job candidates.

The collaboration is in line with the government’s 2025 digital transformation strategy. The country is also exploring the application of the PRISM platform in the agriculture supply chain, healthcare, and transport.

In another initiative, Cardano will partner with World Mobile Group to offer sustainable internet connectivity to subscribers in Tanzania and Zanzibar. Thanks to the digital identity solution Atala PRISM, subscribers will have access to digital banking services, healthcare, and education.

Bundle Africa Adds More Tokens

Bundle Africa has recently added ten more tokens: PancakeSwap, Uniswap, Venus, VeChain, BitTorrent, Chiliz, WINK, Holo, Stellar, and SafePal. This brings the total number of digital assets on the platform to 25.

The Binance-backed crypto app has shown tremendous growth, processing transactions worth more than $85 million in 2020.

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PowerTrade Rolls Out Crypto Options Trading App

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On April 15, 2021, PowerTrade rolled out a crypto options app for iOS devices. With the app, retail traders can easily purchase Call and Put options on bitcoin.

Growing Demand for Retail Options Trading

As the bitcoin price increased in Q1/2021, the bitcoin derivatives market was also experiencing growth. For instance, futures hit $2.13 trillion while options reached $28.63 billion in trading volumes in March 2021. Compared to March 2020, this was a ten-fold increase.

PowerTradeAccording to a statement from PowerTrade, institutional traders are currently dominating crypto options trading. 93 percent of the institutional crypto options trading volume takes place on Deribit, a platform with high minimum trade sizes.

Data from messaging platform Paradigm revealed that it facilitated $22.91 billion of the $28.63 billion options trading volume in March. This indicates that the majority of crypto options trading is still taking place on the institutional level.

Interestingly, retail trading dominates the spot and futures markets. For example, the growth of exchanges like Binance and Coinbase that offer spot trading is proof that retail trading is dominating these markets. On the other hand, exchanges that concentrate on institutional trading do not have a significant market share.

Retail users that want to trade crypto options have been neglected. PowerTrade wants to fill this gap by offering easy retail trading of crypto options. According to Google Trends, searches for bitcoin options are on the rise, indicating growing retail interest.

Joey Krug of Pantera Capital said, “Easy to understand options are key to further retail adoption of crypto. It is one of the reasons so many people have adopted Robinhood and I believe PowerTrade can bring a similar user experience to the crypto market.”

Pantera is one of the VCs that have contributed funds to PowerTrade.

The PowerTrade App

PowerTrade

PowerTrade has conducted user research that shows retails users find the present offerings difficult to use. Moreover, these platforms are focused on professional traders. Other challenges that users face are not understanding how these professional-focused tools worked, confusing interfaces, and high minimums. As a result, retail users give up on using these options trading platforms.

To solve these issues, PowerTrade has designed an interface with retail traders in mind. So far, beta users have found the interface appealing.

“We are very excited for the public to finally experience the PowerTrade vision we have been working towards over the past year,” said Mario Gomez Lozada, PowerTrade CEO.

The PowerTrade Platform features the following:

  • Users can buy and sell BTC/USDT options.
  • Zero percent fees. However, network fees apply when users withdraw bitcoin to an external wallet.
  • Low minimums. Users can start trading with as little as $1.
  • Users can currently fund their accounts with USDT. The company plans to add more funding options in the future.
  • Only iOS users can access the platform at the moment. Android users will have a PowerTrade app soon.
  • The platform has a decentralised autonomous organisation (DAO) token called PowerTrade Fuel Token (PTF). Users can stake PTF on the website.
  • Beginners will receive education on how to trade options.

In September 2020, PowerTrade raised $4.7 million via a token sale. The participants of this funding round were Pantera Capital, Framework Ventures, CMS Holdings, QCP Capital, Synthetix founder Kain Warwick, Coingecko founder Bobby Ong, among others.

CMS Holdings said, “We are excited about the tremendous continued growth potential in the emerging crypto options space.  With retail interest in equity options at an all-time high, we think it is only a matter of time until we see a team successfully launch these products for the crypto community.”

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