Hi to fellow subscribers and new viewers. Welcome to Sobuka. My name is Nick. Today I will be reporting on the country of Kenya from an article by Global Trade Review titled “Bitcoin An Opportunity for African Trade”.
So this article goes into detail on how Bitcoin continues to be the subject of much debate and controversy for many African countries in areas of criminality and black markets. However for businesses and even the small ones in Africa, that is not even a debate. The cryptocurrency itself offers people like this lady I will go into shortly the ability to manage her business seamlessly. And consequently because of that, she is able to flourish.
It’s really strange how over here in the US and the West all these different types of YouTubers and outside personalities are simply speculating on the price of Bitcoin while in these 2nd and 3rd world countries that I cover, there is actually physical uses for Bitcoin. You can compare this analogy to toilet paper. We are simply the buyers of toilet paper in the West and passing it among one another but not using it in any shape or form to improve our quality of life. And yes one can argue that investing in ICOs is a form of improvement to society but as of today, most of these are not generating anything at all. All what Bitcoin is right now in the West is primarily seen as a store of value and as a speculative instrument. All that is to say is that we can survive without Bitcoin in the West without it even causing a drastic dent in our society and way of life. This is not the case in Africa. So this brings me to the whole purpose of my article on how people in Africa are physically using Bitcoin as toilet paper on a regular online bases.
If you ask a 5 year old kid what they can do with toilet paper, the possibilities is endless. But if you ask an adult, they will more than likely come up with one answer. The case is true with the kid as Bitcoin is to Africans. Elizabeth Rossiello is the CEO of BitPesa, a pan-African exchange platform that uses Bitcoin to help businesses make or receive international payments. She’s been interviewed and asked a question with her response being “[start quote..there are companies that are really struggling and when you’re struggling, you look for other solutions.” Elizabeth started BitPesa in Kenya in 2013. It was in Kenya where she found out how African businesses where in search of a real need to transact but boxed into a world of dealing with high transaction cost, waiting days to receive payments, and communicating across borders. The process in the past and in many parts of Africa today that have yet to transact with Bitcoin experience highly manual and inconvenient was to transact as compared to the West. But it’s hard to see these issues when you are inside a box. So I am assuming that since Elizabeth had investment banking experience and dealing with 1st rate clients, it was clear for her to see where Bitcoin could be useful in Kenya and the rest of Africa.
So what I have done is compiled a list of how Bitcoin is used in Kenya and parts of Africa where it's legalized:
[First item on my list..] Folks are making international payments with Bitcoin. For example one can order supplies back and forth from countries far away like China.
[Second item on my list..] Creates the need for local brokers to act as middlemen to manage physical goods, transports and provide temporary liquidity.
[Third item on my list..] Provides as an alternative use outside of the local communities fiat currency where the local currency is deemed unfavorable and/or non transferable in contrast to Bitcoin.
[Fourth item on my list..] Bitcoin is now used and seen as a competitive mode of exchange compared to traditional banking alternatives. This is turn will only force banks to adapt and stay competitive in terms of cost and speed of service. “Where a payment would often take two weeks through a local bank”...exchanges like BitPesa can do it in a few minutes.
[Fifth item on my list..] Fights and tackles currency control and restrictions as Bitcoin is seen as a liquid alternative to the US dollar, the world reserve currency.
[Sixth item on my list..] Used for trade finance and many types of cross-border trading activities.
[Seventh item on my list..] Helps grow the communities into functioning and fluid capitalist, independent communities. With Bitcoin the wealth is spread around. BitPesa boosts in this article that the average transaction size on its platform is $25,000 (USD)/day with larger customers transacting $100,000 (USD)/day. Since the launch of this exchange in 2013, BitPesa has seen exponential growth in users and volume.
[Eighth item on my list..] Uber and Taxi services. No I’m just playing. I am just being funny. But given the creativity coming from the 3rd world, I would not be surprised.
And I will leave off with what Elizabeth says in this article as this basically sums up my toilet paper analogy, “Nearly all our customers grow with us. They all start small and grow. A lot of them enter new markets with us. They may have thought they could never enter this adjacent market but now that it's easy to make payments, or collect payments, or hedge the risk, because you can do instant payments, they start to enter these new markets.”
You can find more information to this article by doing a search for GTR and looking up the title “Bitcoin - an opportunity for African trade?”
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