With each passing day, more and more Africans are discovering cryptocurrencies. As a result, bitcoin and other cryptocurrencies are finding real use cases in African countries.African countries, such as Nigeria, have been reported to have among the highest search rates for the keyword “Bitcoin.” A significant reason behind this increasing interest in cryptocurrency is the rise of African-focused crypto companies. Companies, such as Luno, have been at the forefront of cryptocurrency adoption in major African economies, including Nigeria and South Africa. According to Owenize Odia, the country manager in Nigeria for Luno, the company makes it safer and easier to buy, sell, store and learn about cryptocurrencies like bitcoin, bitcoin cash and ether. “We aim to upgrade the world to a better financial system, and we have more than 3 million users across 40 countries in emerging and developed markets,” Odia said.Recently, Bitcoin Magazine had a chance to speak with Odia about the current and future use cases of cryptocurrencies in Africa. Cultivating Bitcoin Adoption in AfricaBitcoin Magazine: Luno has managed to achieve a dedicated following globally and in the African continent. How was this cultivated?Odia: Like in any other market, cultivating a successful business in Africa depends on understanding the nuances of the market and building solutions that address specific needs. For example, we were the first cryptocurrency exchange with a mobile app, which placed us in a unique position to take advantage of the mobile revolution on the continent. We also make it easy for consumers to trade in their local currencies.There are not a lot of companies that offer these kinds of services in Africa and across the rest of the world — and certainly not in a very mass-market, user-friendly way, and particularly with a really good mobile product coupled with good customer service.BM: According to the Luno’s “Future of Money” report, cryptocurrencies are likely to experience the most adoption in emerging markets. Why do you think this is the case?Odia: The African continent is full of financially savvy people who understand and need the benefits that different financial systems can offer. For example, when asked why money was essential to them, 60 percent of Nigerian respondents said it was to secure their family’s well-being. Twenty-five percent said it was to pay for their education, compared to just 8 percent of respondents who said that in the U.K. One of the conclusions we drew from this is that, if money is not simply a “nice to have” but is vital for your future, then you spend more time understanding it, managing it, preserving it and, to an extent, being creative with how you maximize the use of it. Therefore, if cryptocurrencies can provide a more secure and cheaper means of exchanging value than the existing system, it will be used.Bitcoin Use Cases, Perception in AfricaBM: From your personal experience, what do you think are some of the most prominent use cases of cryptocurrencies in Africa?Odia: As the African Continental Free Trade Agreement (AfCFTA) comes into play, cryptocurrencies could be useful for reducing the cost of intra-African trade. The cost of cross-border trading can be a big sticking point for trade on the continent given that there’s no common currency. Cryptocurrencies offer a welcomed alternative, with much lower transaction costs and a decentralized structure, meaning they’re open and more affordable for anyone to use wherever they are.Cryptocurrencies like stablecoins can also mitigate the risk of currency fluctuations. One of the biggest criticisms of cryptocurrencies is that they can be quite volatile, but stablecoins are pegged to traditional fiat currencies and other established stores of value which eliminates any volatility. As such, these stablecoins do not only provide a secure and predictable tool for exchanging goods and services; they also bring with them the benefits of both fiat and cryptocurrencies.BM: In Africa, bitcoin scams have resulted in people distrusting cryptocurrencies. How has Luno helped to fight this misconception that is negatively affecting adoption levels?Odia: Negative perceptions of cryptocurrencies are mostly based on emotions and not rational facts. The data shows that cryptocurrencies are less of a risk, both in absolute and relative terms, to the existing fiat currency system. It doesn’t mean there is no risk; it just means the risk is small, and like all other financial systems, the risk cannot be eliminated but should be mitigated.We do a lot of work around education, providing clarity on a lot of commonly held views that don’t accurately reflect cryptocurrencies. In Nigeria, for example, we’ve had several university events across different regions to build understanding about cryptocurrencies among students. It’s about ensuring this happens across the board for consumers, the media and broader stakeholders. Libra, Cryptocurrency Regulation in AfricaBM: The Facebook libra coin is set to be launched in 2020, with the social media giant planning to market it heavily in emerging markets. What do you think will be the impact of Libra on crypto adoption in the African continent?Odia: In the long-run, Libra will have a positive effect on Africa’s cryptocurrency adoption. Trust issues around cryptocurrencies are well documented, but on Facebook, you have not only a globally-recognized company but also an affiliation of well-respected financial players such as Visa and Mastercard, who provide further assurances.The inclusion of these companies also addresses distribution issues by instilling broader acceptance by a wider range of partners, essentially solving the bigger “chicken and egg” problem — which merchant or company would not want to add a new cryptocurrency that will be available to billions of people all over the world already using all these social networks? While many crypto initiatives focus on building the product first and hoping the market will come to it, Libra essentially flips that around and tries to solve the harder problem of distribution before finalizing the product, and this is where their global partner strategy strengthens the case for adoption.BM: Different African countries have different policies when it comes to cryptocurrencies. Will the cryptocurrency industry thrive or is some uniformity needed to promote mass use of cryptocurrencies?Odia: Cryptocurrency companies should take an open approach to working with banks and governments to find common ground on issues such as regulation. This might look different across the continent, but with improved regulation bringing clarity and protection to businesses and consumers, this will go a long way in driving mainstream adoption.However, we know the regulatory space doesn’t always move at the same speed as startups, but that’s where self-regulation comes in, so crypto firms can inspire trust among key stakeholders. For example, we apply stringent KYC (know your customer), and AML (anti-money laundering) processes as it’s something that’s deeply ingrained in our culture.Bitcoin Price and Next StepsBM: Has the recent bitcoin bull market affected the progress rate of cryptocurrencies in Africa?Odia: There is a relationship between cryptocurrencies and other asset classes, but it will be something of an overstatement to ascribe too much significance to that relationship.Some people may be using bitcoin as a safe haven when the markets aren’t performing too well, but that is a small fraction compared to those that take the same approach with gold and other traditional stores of value. But as an alternative investment, when you look at the correlation and potential upside, it does make sense to put some money into cryptocurrencies. Yes, it’s high-risk, but the returns could be astronomical.BM: What’s next for Luno in Africa?Odia: We are working to increase awareness of the many benefits of cryptocurrencies across the continent and create an environment that can bring about the development these economies need. When you consider that the global financial system that underpins the global economy was created 75 years ago and has seen little change, there’s a case to be made for taking another look at the system.Our research indicates that people from emerging markets are seeking a change to the way global money exchange and banking operates. Individuals in these markets cannot afford to and should no longer need to pay extortionate exchange rates, accept national devaluation, or lose out when they simply transfer money between individuals or entities. Access to a more inclusive financial system will enable people everywhere to think of new and better ways of exchanging value, and we are hoping to play a crucial part here.

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