Last week we interviewed Tawanda Kembo, a bitcoin evangelist, a pioneer of the Sub-Saharan cryptocurrency community, and the start up he works at has even attracted the interest of Stanford University. The traditional Blockchain community is dominated by voices from a handful of European, East Asian, and North American countries, and we wanted to find out more about what was happening in a very different market. Tawanda has a Bachelor’s degree in Computer Science from the University of Zimbabwe, the country he calls home.
Humaniq recently succeeded in our initial crowdfunding and we’re working towards offering an ICO in February. One of our key objectives is to provide a solution to some of the challenges outlined by Tawanda. You can find out more about our proposal here.
1) What is the biggest obstacle to using cryptocurrencies in your area?
I would say the biggest one is liquidity. There is not much bitcoin (or other cryptocurrencies) in circulation or that is traded at local exchanges. This in turn pushes the price of bitcoin up. I write more about liquidity and it’s effect in this blog post.
What we’ve seen in African countries where we have bitcoin exchanges is that although the price of bitcoin all over Africa is higher than it is on international exchanges, it tends to be lower in markets where there is more liquidity and higher in markets where there is less liquidity. In South Africa where the volume of bitcoin that’s trade is high, it’s around 5% higher than it is on other international exchanges but in places like Nigeria and Angola, where the volume of bitcoin that’s traded there is low, the price of bitcoin there is gets as much as 100% higher.
I also talk about other challenges to cryptocurrency adoption in this blog post I wrote 2 years ago:
A Bitcoin Payment Gateway
This one is key. If we had a local company that could take away Bitcoin-acceptance risks — volatility and not knowing what to do with the bitcoins when you have them — then more businesses and individuals would be willing to enter the ecosystem.
2) If it was easier to use these currencies, even without having any money to start with, do you think people would use them?
Yes. Right now it’s so hard or difficult to get cryptocurrencies that most people who want to use them just can’t get started.
3) What do you feel are the key features of any new banking app should have that targets people in your area?
- USSD Support. This means that you can use the app on any phone — even a dumb one. It’s one of the key features that made mobile money so successful in Kenya, Tanzania and Zimbabwe
- Merchant adoption and integration — being able to pay for goods and services directly from the app. One of the things mobile money service providers did well.
- Easy cash-in and cash-out — Being able to easily convert local currency into and out of the app. Mobile money did by creating an agent network. In Zimbabwe (and Kenya) there is a mobile money agent at every street corner who will convert your local currency to mobile money and vice versa. Building an agent network or partnering with someone who has one already is a key to success
4) Do you think an app that could directly connect aid organizations with people who need assistance would be beneficial to people in hard to reach areas?
Maybe. Albeit the implementation of that is not easy especially the part where the aid organisations can verify that the person they are sending money is really who they say they are, they really need it and are not some rich kid who is pretending they do and then being able to do a ‘monitoring and evaluation’ afterwards to verify that the money was actually spent on what it was meant for. Monitoring is probably the hardest part and the part that makes it difficult to cut out the middle man.
A faster driver to adoption (and we saw this with mobile money) is local remittances. That is instead of a son in the city sending money to their mother in the rural areas they begin using your app. The goal is to get the sons to tell their mothers to download the app because it’s cheaper and easier for them to send the money using the app. And for the mothers to tell their sons that they prefer receiving money via the app because there are so many agents who can provide a cash-out service and all the merchants/vendors are integrated with the app.
Humaniq would like to think Tawanda for taking the time to give us these insights into the cryptocurrency challenges and opportunities in Africa. You can follow Tawanda on Twitter and reach him directly through the links below.
Lead Developer, BitFinance | Skype: tkembo | Email: tawanda@bitfinance.co.zw | Website: http://bitfinance.co.zw
