Blockchain can provide infrastructure for financial inclusion in Africa – Standard Bank

Given Africa’s rapid commercial growth and globalization over the past decade, innovation in financial technology (fintech), and in particular blockchain technology, can drive the improvement of financial infrastructure.

The need for more inclusive financial services has been identified. To meet the unique challenge of providing the vast majority of the African population who remain without a bank with more accessible tools for financial management and inclusion, Standard Bank and others have researched and developed transformative fintech and blockchain products, says Standard Bank- head of blockchain. Ian Putter.

“The real potential for exponential leaps in financial inclusion lies in the blockchain infrastructure that underpins cryptocurrencies, rather than in the currencies themselves. One of the most powerful aspects of blockchain is the ability to create programmable money, which can help eliminate fraud and human error. in transactions, and promote transparency in financial records.

“This aspect of the blockchain can enable the establishment of corruption-resistant and robust welfare systems, and ensure social welfare efforts when the intended recipients and fulfill priorities such as ensuring that those who need it are helped and treated with dignity,” he says.

For example, blockchains that enable smart contracts, which are a computer program that requires conditions to be met before a transaction is executed, can be used to verify a person’s eligibility to receive a grant, and then pay the recipient directly into a digital wallet on their smartphone. .

Among the uses for fintech in Africa are peer-to-peer payments, which are widely used to enable informal and small businesses in the beating heart of many African economies, as well as ease the logistics and costs of money transfers.

“The continued globalization of African markets has resulted in a need for more efficient and less costly cross – border payments to facilitate African businesses trading abroad.

“Countries such as South Africa, Kenya, Nigeria and Ghana have seen the rapid adoption of cryptocurrencies as a means of accessing more efficient payment rails provided by blockchain networks, and providing returns on assets with assets such as Bitcoin or stable coins linked to the value of dollars, “says Putter.

Furthermore, blockchains can also provide mechanisms for fair and transparent microfinance and increased purchasing power, to support the creation and growth of small businesses that serve local communities.

Transparent social coordination tools offered by blockchain-based organizational units, such as decentralized autonomous organizations, can give small business collectives the opportunity to gain competitive advantage as a bargaining power to match larger companies.

“The shift in African markets is taking place as a grassroots and collaborative transformation. Building financial competence, education and awareness at the societal level and providing tools to help societies strengthen themselves is a priority for us.

“Standard Bank is still at the forefront of research and development of blockchain and distributed ledger technology in the African context, committed to exploring efficient digital payment rails and financial services that enable African trade to flourish. This includes ongoing collaboration with major blockchain companies , as Algorand and Hedera.

“Improving the inclusion of subordinates is a core value of Standard Bank, and blockchain technology will undoubtedly provide an opportunity for a major impact on African markets in the coming years,” says Putter.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *