As African leaders kicked off the operational phase of the African Continental Free Trade Area – AfCFTA, an expert believes cryptocurrencies will offer an effective way for businesses across the continent to transact in the absence of a continent-wide currency.
At the 12th Extraordinary Session of the Assembly of African Union Heads of State and Government, Africa leaders listed digital payments system and four others as operational instruments.
Most African nations are still understudying the complexities of Blockchain and Cryptocurrency as new technologies.
In this interview, Marcus Swanepoel, Co-Founder, and CEO, Luno, talks to Business Insider SSA on the opportunities cryptocurrency will create as a means of cross-border payments and safe financial transactions on the continent.
Swanepoel also shares insight into the biggest challenges Luno is facing in Nigeria and the coming of Libra, a digital currency to be backed by the universality of Facebook.
Business Insider SSA (BISSA): The AfCFTA operation kicked off a few weeks ago, how would Blockchain technology and Cryptocurrency help African leaders in achieving the landmark trade deal?
Marcus Swanepoel: The AfCFTA is excellent news for trade in Africa. The new agreement opens new trade routes and opportunities and presents an excellent opportunity for businesses to expand across the continent.
In the absence of a continent-wide currency, cryptocurrencies offer an effective way for businesses across the continent to trade goods without having to shoulder the costs associated with cross-border trading. Cross-border payments with traditional banks can be slow and expensive. In many cases, it can be much easier to take physical cash on an airplane and give it to the recipient than to make a bank transfer. Cryptocurrencies provide a secure, instant and nearly free option for cross-border financial transactions that will make it easier for businesses to take advantage of the new business landscape.
BISSA: What’s Luno up to recently and what are the achievements so far?
Marcus Swanepoel: We are in the process of adding more cryptocurrencies to our exchange and have just announced that customers will soon be able to buy, sell and store currencies like Bitcoin Cash on our platform. These new additions are happening after extensive consultation with customers and the wider community, and we plan to add other new cryptocurrencies in the coming months.
As a company that aims to educate and excite about the wonderful world of cryptocurrencies, we are pleased with the series of educational meetups we’ve been able to roll out across the world. These gatherings provide a platform for existing cryptocurrency traders, buyers and intending users to learn and share ideas on the evolving trends in the market.
As early pioneers in this industry, we feel we must share our knowledge and excitement with the world as best we can.
In terms of growth we are also ramping up hiring across all our offices including London, Cape Town, and Malaysia – we estimate we will be almost 300 people by the end of this year! More details can be found on our careers page.
BISSA: Tell us about any challenges Luno is facing in Nigeria compared to other African countries
Marcus Swanepoel: One of the biggest challenges we face in Nigeria is the lack of clear guidance, from a regulatory point of view. However, this is not peculiar to Nigeria and it is the same position most governments around the world have adopted.
Cryptocurrency is a new technology which is somewhat complex and most governments are still trying to understand how it works and how to use it. The good news is that the Nigerian government is interested in the space and has set up a committee to understudy it. We expect them to come up with a position very soon. We are also working with other players in the cryptocurrency ecosystem to put the right structures in place that will work well for everyone and guide every player in the market.
BISSA: What are your thoughts on Facebook’s Libra and the future of Cryptocurrency in the world?
Marcus Swanepoel: A lot has been said about Libra, it’s potential to unlock enormous amounts of value to customers across the world, especially in developing economies, and what it means for the future of money.
When you consider that the global financial system was created 75 years ago and hasn’t changed, there’s a good reason to believe that a shakeup is long overdue. The increase in population and changes to the distribution and inequality of wealth, at a time when tremendous steps forward in technology are being taken, means that the current financial systems need to be brought in line with the realities of the present age. A new digital currency backed by the universality of Facebook and the credibility of the other players involved provides an excellent opportunity to make this a reality and bring the benefits of the digital economy to more people than ever before.
There seems to be an appetite for this change as well. We recently surveyed more than 7,000 people from across Africa, Europe, and South-East Asia, and found that Africans are more open to adopting cryptocurrencies than people from other continents. When asked the question “Do you think a single global currency would make the current financial system better or worse?” almost three times as many respondents from Nigeria and South Africa said it would make it better compared to the UK.
The research also gives some insights into why FB Libra will find a very open and expanding market within Africa. Where traditional ways of exchanging value are very expensive, prohibited or subject to fraud, savvy people will love the distribution and the access that a FB coin provides. With this in mind, African markets may well be quicker to adopt the coin than developed markets