Cryptocurrencies and non-fungible tokens are being used across African nations to fund welfare and development projects.
These projects are concerned with improving local livelihoods and focus on education, electricity, healthcare, and housing, according to a Reuters report.
Since the coronavirus pandemic and ensuing economic struggles have dried up more traditional channels of funding, some have been replaced by cryptocurrencies, according to Kenya Blockchain Association researcher Roselyne Wanjiru.
“Crypto reduces barriers of entry, and is a fast way of raising funds for social causes because it is easier to navigate than traditional financial systems,” said Wanjiru. “We are seeing more companies and individuals use it to offer solutions to communities.”
After raising funds by selling NFTs, artist and activist Benjamin Von Wong built a 30-foot (9-meter) tall sculpture from garbage collected in Nairobi’s Kibera slum. Along with activist Casson Trenor and the anti-plastic NFT community Degenerate Trash Pandas, Von Wong raised about $110,000 for the installation.
“Raising funds through cryptocurrency was something new for us,” said Byrones Khainga, director of technical services at Human Needs Project, based in Kibera. “But it is now going to inform how we implement our social welfare activities because we have seen how fast we can move on fundraising.”
Earlier this year, the Celo Foundation and Mercy Corps Ventures launched a microwork pilot, also in Kenya. The platform gave hundreds of youth access to jobs that consisted of large projects broken down into manageable tasks. For their labor, the youth are rewarded in Celo dollars, a stablecoin tracking the value of the U.S. dollar, which is sent directly to their digital wallet, avoiding the hassle of any cross-border payment system.
Driving financial inclusion
According to Scott Onder, senior managing director at Mercy Corps Ventures, cryptocurrencies can help to drive financial inclusion by creating new digital employment opportunities, as well as reducing the cost of cross-border payments. “Cryptocurrency removes this costly barrier and has the potential to create new ways for young people to earn, spend, save and send money,” he said in a statement.
According to the United Nations trade agency UNCTAD, some of the highest share of crypto ownership throughout the world can be found in Africa, including South Africa, Nigeria, and Kenya. Payments and remittances have shown to be rising in each of the three countries. In Kenya alone, some 8.5% of its 56 million people own cryptocurrency, according to UNCTAD data. Meanwhile, the Central African Republic adopted Bitcoin as legal tender in April.
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