Cryptocurrency and Blockchain technology are frequently cited as the next FinTech revolution given their promise of fast, secure and affordable transfers of capital. While mobile money services have been around for over a decade now, their importance hasn’t yet diminished – The Economist, a news service, reported that during the coronavirus (COVID-19) lockdown in Q1 and Q2 2020 the value and number of mobile money transactions in Rwanda increased five-fold. In June 2020, the Central Bank of Kenya reported that mobile money transactions reached KSh 450.98 billion, reflecting a 15% increase from the previous month.
So if mobile-money and the rise of digital-banks continue to meet the needs of consumers so effectively, then where do cryptocurrency and blockchain start-ups fit in this picture? To unpick this we first need to understand the difference between the two technologies. A cryptocurrency is a digital asset secured by cryptography, transactions are then denominated in terms of a virtual token. A blockchain is a component of the transaction effectively acting as a digital ledger used to record the transactions between parties. Because blockchain technology offers a single, immutable reference for any transaction it’s use case extends beyond financial transactions including contract law, voting and governance..
Blockchain across Africa
Our analyst’s found technology start-ups across industry vertical’s leveraging cryptocurrency and blockchain technology. As expected the vast majority of start-up activity was focussed around cryptocurrency exchanges; such as South Africa’s Luno, or remittance payments, such as B2B financing tool BitPesa.
However, our analysts also reported more specialist use cases in Agriculture, Healthcare, Transport and Logistics and even for recording Real Estate transactions such as Nigerian PropTech HouseAfrica.