Cryptocurrencies and non-fungible tokens are being used to fund welfare and development projects in African countries.
According to a Reuters report, these projects are related to improving local livelihoods and focusing on education, electricity, health care and housing.
According to Kenya Blockchain Association researcher Roslyn Wanjiru, some have been replaced by cryptocurrencies as the coronavirus pandemic and ensuing economic conflicts dry up more traditional channels of funding.
“Crypto lowers barriers to entry, and is a faster way to raise funds for social causes because it is easier to navigate than traditional financial systems,” Wanjiru said. “We are seeing more companies and individuals use it to provide solutions to communities.”
crypto projects
After raising funds by selling NFTs, artist and activist Benjamin Von Wong built a 30-foot (9 m) tall statue from waste collected in Nairobi’s Kibera slum. Along with activist Kaison Trainor and the anti-plastic NFT community DeGenerate Trash Pandas, Von Wong raised approximately $110,000 for the establishment.
“Raising funds through cryptocurrency was something new to us,” said Byrons Khinga, director of technical services at the Human Needs Project based in Kibera. “But now that’s going to inform how we implement our social welfare activities because we’ve seen how fast we can move forward on fundraising.”
Earlier this year, the Celo Foundation and Mercy Corps Ventures also launched a microworks pilot in Kenya. The platform gave hundreds of youth access to jobs by breaking down large projects into manageable tasks. For their labor, young people are rewarded in Celo Dollars, a stable currency tracking the value of the US dollar, which is sent directly to their digital wallets, avoiding the hassle of any cross-border payment systems.
promoting financial inclusion
According to Scott Onder, Senior Managing Director at Mercy Corps Ventures, cryptocurrencies can help promote financial inclusion by creating new digital jobs as well as reducing the cost of cross-border payments. “Cryptocurrency removes this costly barrier and has the potential to create new ways for youth to earn, spend, save and send money,” he said in a statement.
According to UN trade agency UNCTAD, some of the highest share of crypto ownership worldwide can be found in Africa, which includes South Africa, Nigeria and Kenya. Payments and remittances have been shown to be increasing in each of the three countries. In Kenya alone, about 8.5% of its 56 million people hold cryptocurrency, according to UNCTAD data. Meanwhile, the Central African Republic adopted bitcoin as legal tender in April.
What did you think of this topic? Write to us and let us know!