Binance founder and CEO Changpeng Zhao, otherwise known as CZ, believes that the African continent holds some unique opportunities for cryptocurrency adoption and development. The Binance leader provided a number of interesting insights during an exclusive “ask me anything” session hosted on Zoom for key members of the African cryptocurrency community, which Cointelegraph participated in.
Binance, which has established itself as the world’s largest cryptocurrency exchange by trade volume, has slowly been opening up satellite trading platforms in a number of African countries. Uganda was the first country to welcome Binance to the continent in 2018.
Binance has since launched trading support in countries such as Nigeria and most recently South Africa, which included the provision of trading pairs and fiat deposits for users using South African rands. The company’s foray into the African continent began in earnest in 2018, as CZ explained during the AMA.
“Even from the first day when Binance launched, we had users from Africa, and they were actually relatively active. So, we’ve always known that Africa is an important market. And so, I think it was early 2018 that I visited Uganda, Togo, Nigeria at the same time — and also Ethiopia. So, I had a little tour around Africa just to learn a little bit more about the market, and soon after that we opened Binance Uganda.”
The past two years have seen Binance branch out into a number of African countries, while its charity arms and incubation services have supported start-ups and made donations to the needy. CZ believes that the continent will become another vital cog in the company’s ever-growing base.
“We view the entire African market as a really key market, and this year we were very lucky to be able to find a good banking partner in South Africa, and we are able to now accept banking deposits directly through bank accounts. […] We will soon be able to launch credit card buying as well. South Africa, and Africa as a whole, is a really important market”
Africa is untapped, but not without challenges
As previously covered during the 2020 Blockchain Africa conference hosted in Johannesburg earlier this year, the continent is ripe for technological innovations that could provide solutions to the huge number of unbanked people. Cointelegraph posed its own question to CZ during the Zoom session, asking if the Binance CEO sees Africa as a relatively untapped market for cryptocurrency exchanges.
Despite the fact that South Africa has a number of local cryptocurrency exchanges that are operating successfully, CZ believes that the rest of the continent could benefit from cryptocurrency exchanges:
“Yes, absolutely. I think that in South Africa there’s a few crypto exchanges — they’re doing quite well. But I believe they are still relatively small. I’m not sure how profitable they are or how sustainable they are. In other parts of Africa, I think the coverage is very weak, is very poor. I don’t think it’s very easy to buy cryptocurrencies in Africa right now overall, so we want to help improve that situation.”
Despite the fact that Binance is rolling out peer-to-peer platforms and its own centralized exchange platforms in certain countries, there is still a lot of room for growth. CZ pointed to the fact that the provision of trading pairs in native fiat currencies is gaining traction in countries such as Nigeria where daily trading volumes have surpassed $1 million per day on Binance.com.
Nevertheless, the sheer number of Africans that are unbanked remains a major barrier to entry, as does basic Know Your Customer processes being carried out due to varying socioeconomic difficulties facing many Africans:
“It is a very much untapped market. There’s a different set of challenges there. I think basically, that’s the reason for it being untapped. Working with banks there is a little bit more difficult. The banking API interfaces are slightly older or nonexistent, and the number of people having bank accounts are quite low. So, even if you have a bank account support, the overall population you can tap into [is] still in the low double digits.”
CZ went on to add that even the most basic things like verifying users have proven to be challenging in some cases: “Many people in Africa do not have Western-style addresses. […] For exchanges that tap into this market, they have to address all of those issues. So, we’re trying to overcome all of those issues.”
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