From cointelegraph by Victoria Li
“When people look at Africa, they tend to lump it all together into one entity, which really diminishes the complexity and color that exists on the continent. But there are over 50 countries with many currencies, borders, cultures, tribes, and languages,“ noted Farzam Ehsani, CEO and co-founder of VALR, during Cointelegraph’s recent X Spaces.
His colleague, VALR’s Head of Growth Blake Player, agreed: “Africa is definitely not like Europe or the US with one big homogeneous trading environment. There are different markets with very different rules, regulations and levels of sophistication.“
Ehsani, Player and VALR’s chief marketing officer Ben Caselin, gathered for a live discussion to discuss the nuances of the African crypto scene and strategies for crypto exchanges to thrive in these circumstances.
“No choice“ for Africa but crypto
Speakers noted the specificities of the African financial landscape, such as the phenomenon of mobile money, depreciating currencies, high interest rates and high remittance volumes. “Remittances are very expensive, highly intermediated and there’s a severe lack of liquidity for most African local currencies,“ added Player.
Cryptocurrencies and stablecoins appear to offer a potential solution. “Crypto holds a lot of promise as a hedge to store value in this context for those who can actually hold it for the long term, while stablecoins offer a way to preserve value and transfer it more cheaply and quickly across the continent and internationally. We can actually see this demand for stablecoins on VALR,“ said Ehsani.
He also noted the historical challenges with property rights and identity in Africa: “We’ve had a lot of challenges proving that somebody is associated with a particular address or a particular piece of land that they own that they can use as collateral to borrow money. And that really is a huge drag on an economy. Whereas with crypto, they can literally have a mobile phone and an internet connection and then have access to a wallet. I think that will be transformative for the continent. It already has been.“
Large institutions also appear to be getting into the crypto game, as Ehsani explained: “It’s happening slowly, but we’re starting to see banks, asset managers and larger financial institutions understanding that this is a very powerful space. Previously, they tried to stay out of crypto because blockchain promised to reduce costs for their client base and they benefited from the higher fees. But in the last few years, they’ve realized that they don’t really have a choice anymore, especially with the rise of ETFs in the US. Large financial institutions and central banks in Africa have yet to fully embrace crypto, but that time is coming relatively soon.“
