The Bitcoin Lightning Network will be used in fiat transfers between the EU and Africa

by · December 12, 2022

The ongoing crypto winter is not stopping the industry from pushing for global adoption and availability. A new partnership between CoinCorner and Bitnob opens up a way for users across continents to conduct cross-border transactions involving multiple fiat currencies.

Typically, transferring funds between Europe and Africa requires a third-party facilitator such as Western Union, which relies on centralized entities. These transactions often have multi-party processing times before approval and are known for their expensive cuts. The World Bank estimates that remittances to sub-Saharan Africa topped $40 billion annually as of 2020 – with Nigeria receiving almost half of that alone.

Now users can transfer money via the Bitcoin (BTC) Lightning Network from the UK and Europe to selected countries in Africa. The Send Globally application allows British Pounds (GBP) or Euros (EUR) to be transferred to the local currencies of Nigeria (NGN), Kenya (KES) and Ghana (GHS).

Through the Lightning Network, the funds are automatically converted to BTC, then immediately converted to the local currency and deposited directly into the recipient’s bank account or mobile wallet.

Sending money transfers to Africa, especially from the UK and Europe, is notoriously expensive. Source: IFAD

Danny Scott, CEO of CoinCorner, said the remittance market is a big opportunity to highlight the utility of BTC.

“The borderless nature of Bitcoin has always made it a great tool for sending money around the world, but now with the Lightning Network, sending Bitcoin is instant and very low cost.”

In 2021, data from Statista placed Nigeria in the top 10 countries for remittances. In addition, the World Bank reported that sub-Saharan Africa accounted for 14.1% of global remittances in the past year.

However, almost 80% of African countries limit the type of institutions that are able to provide remittance-related services to local banks. Such exclusivity creates entry barriers, and thus access to financing for those who need it most.

Related: Remittances are driving “uneven but rapid” crypto adoption in Latin America

The proliferation of cryptocurrencies in Africa has been a hot topic in the space, as the continent is full of emerging economies and practical use cases.

In North Africa in particular, the growth of the crypto industry continues to grow. A report by Chainalysis revealed that the Middle East and North Africa (MENA) region is the fastest growing in the world.

In September, the Nigerian government held meetings with Binance to potentially negotiate a special economic zone to support crypto and blockchain-related businesses in the region.

A later report by Chainalysis also highlighted Ghana’s progress in the crypto space. It said the country could potentially catch up with Nigeria and Kenya in terms of crypto adoption.