Cuy Sheffield, who leads crypto initiatives at Visa, and Tori Samples, the director of product at the Stella Development Foundation (SDF), were recently guests on the crypto@Scale podcast. During the podcast, they discussed the current status of the blockchain industry in Africa and its growing global influence.
Having experienced leading blockchain solutions and engaging with many entrepreneurs and operators in the African space, both guests had much to share about the market and the industry’s future.
Here are six big insights from the conversation.
Visa is investing $1 billion in Africa
Visa pledged at the US-Africa Business Forum in December 2022 to invest $1 billion in Africa over the next five years. The investment will be used to scale Visa’s operations, deploy new innovative technologies, and deepen collaboration with strategic partners in the government, financial services, fintech, and merchant sectors.
According to Visa Chairman and CEO Alfred F. Kelly, Jr., it will also “focus on strengthening the payment ecosystem through innovations and technologies, supporting the digitization of economies, and investing in upskilling, talent development and capacity building.”
Africans are best positioned to know what Africans need.
Samples, who founded and built her African fintech startup — Leaf Global Fintech — before joining SDF to lead humanitarian work and bulk payments, understands financial inclusion in Africa.
In a recent discussion about the kinds of conversations she often has around her work in Africa, she said:
“Well, thankfully, I think we’ve moved beyond the narrative of Africa being a taker or receiver from other parts of the world. Africa is generative and has collectively started to take care of its own in the crypto space. Africans are best positioned to know what Africans need.”
She also added:
“There’s still a huge gap. I talk a lot about the differences between what’s on paper and reality. People in the West don’t have a lot of direct experience with Africa, by and large. And so they rely on what they see, which is usually reports or on websites. And those aren’t always accurate, and things change quickly.”
Blockchain is enabling African talents to build new and innovative financial products.
Speaking on the conversations he has been having with operators and entrepreneurs in the African blockchain space, Sheffield referred to stablecoins in Africa as a new type of banking-as-a-service (BaaS) technology.
“I think one of the most interesting things that we’ve seen is the demand for stablecoins and the type of activity of developers building products around them … I think in many ways, we’ve seen stablecoins become a way to supply this very large global demand for dollars. And it’s pretty difficult to get dollar-based bank accounts in many markets. And some customers don’t trust the local bank.”
Comparing the state of financial technology in Africa to the West, he explained that in contrast to the West, where fintech solutions are often built on top of traditional banking infrastructure, young African entrepreneurs face challenges convincing banks to collaborate.
“Particularly in markets like Nigeria, in areas like Lagos, there’s a ton of developer talent … but they can’t just go and build on top of a bank. And so, they look at blockchain and the APIs that blockchains offer as infrastructure they can build on top of. And so, we think that the barrier to entry to building new financial products is going to get lower and lower.”
Creators are the new small businesses, and blockchain is their key to effective monetization.
According to Sheffield, Visa’s team started following and engaging with blockchain communities because they believe creators are the new small businesses. Many young people today spend a lot of time on the internet creating content, and Visa sees an opportunity to help these creators monetize their work.
“But I think too often, people think about small businesses as brick-and-mortar. We like to think of small businesses as individuals that are just trying to make a living … So, we would like to see the creator economy become more commerce-based, where people can actually sell goods instead of just trying to sell attention,” he said.
Partnerships between startups and traditional institutions would drive large-scale adoption
Samples shared insights on some companies she believes are poised to impact the African crypto industry significantly.
“I think anyone working on micropayments, removing [the] friction that we still see [in] cross-border [payment], tackling merchant acceptance. All [those companies are] poised well. [There is] still a lot of innovation to come that can help people generate and retain wealth lost in moving it,” she said.
She also emphasized the role of partnership in driving such impact. According to her, it will be productive for small companies and startups to collaborate with large companies with underutilized assets that can be applied to new technologies such as blockchain and its related business models.
Samples’ view echoes that of Yellow Card CEO Chris Maurice, who advocates institutional involvement in crypto.
Indeed, 2023 has seen a few collaborations between crypto startups on the continent and global financial powerhouses. A few include:
- Jack Dorsey’s Block partners with African crypto exchange Yellow Card
- Bitmama’s fintech app Changera integrates MoneyGram Access
- Honeycoin taps MoneyGram to expand crypto-to-fiat capabilities
Blockchain abstraction in mainstream products will lead to more adoption
Speaking on the future of crypto in Africa, Sheffield shared that there are many products built for the market, but there are only a few that mainstream users are comfortable using. He attributes this gap to the flawed notion many Africans have about crypto and how conspicuous blockchain products are to users. He believes that for blockchain to be successful in Africa, most people should never have to know what a blockchain is.
“And I think that if you combine large, trusted institutions with distribution, commercializing these technologies but abstracting them away, they could start to power real products and services without people even knowing what they are. And I think that’s a win for crypto.”