Amidst the crypto turmoil, Africa’s Crypto Exchanges are thriving
By Vakindu Philliam on The Capital
At the end of 2014, BitPesa, a service that allows users to send money to any mobile wallet in Kenya, launched a new feature that allowed its customers in the country to buy bitcoins on the platform.
According to their website, BitPesa, founded in 2013 by Elizabeth Rosiello, is a digital foreign exchange and payment platform that leverages blockchain settlement to significantly reduce the cost and increase the speed of business payments to and from frontier markets.
It turns out sending money in bitcoins is the quickest and cheapest way to handle and transact cross-border payments. While senders may lose money to traditional services like Western Union in FX exchange conversions, coin platforms like BitPesa can cut down on many of these costs. The difficulty and costs of transferring funds across borders have made cryptocurrency an attractive means of exchange for many tech-savvy Africans.
In 2017, BitPesa raised $10 million in Series A funding led by Greycroft Partners.
Two years later (in 2019), the company rebranded to AZA Group and secured another $15 million in debt finance.
A similar success story is playing out in South Africa, where SA’s first cryptocurrency marketplace Luno has clocked 3.5 million users and has raised $9 million to drive the expansion of its bitcoin wallet services to new territories, including into Europe.
The company has processed US$5 Billion worth of transactions since September 2013 when its platform went live and is operating in 40 other countries. Luno is especially prevalent in Zimbabwe.
The hyperinflation and unstable nature of Zimbabwe’s economy have left many citizens looking for an alternative and more reliable means of storing their liquid assets. This has led thousands of Africans to explore with Bitcoin and other crypto investments.
Conclusion:
In the words of Elizabeth Rosiello (founder of BitPesa) on the crypto-exchange industry, “The product is ‘recession-proof’ in that it helps companies lower their costs, find treasury solutions in low-liquidity markets and streamline operations. [The industry] has grown rapidly, even during times of economic problems — its services have arguably proved even more useful during times of stress.”
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