(Kitco News) - As the cryptocurrency ecosystem continues to navigate one of the worst bear market stretches in its history, the continent of Africa remains one of the best avenues for adoption and practical use as blockchain offers the promise of creating a widely available banking and payments infrastructure.
Strike – a digital payments platform built on Bitcoin’s Lightning Network – is the latest company to tap into the promise of Africa with the launch of its “Send Globally” feature, which enables instant, low-cost payments to Africa.
The Lightning Network is a layer 2 payment protocol built on top of Bitcoin that enables faster and cheaper transactions between participating nodes through the use of off-chain transactions.
To help facilitate the launch of Send Globally, Strike partnered with the African payments platform Bitnob to enable instant payments to Africa. The platform, which officially went live on Tuesday, allows Strike users to send money to Nigeria, Ghana and Kenya instantly with no transaction fees.
Funds that are sent are automatically converted to the local currency and deposited directly into a recipient’s bank, mobile money, or Bitnob account. The service is especially helpful in countries that have few options for cross-border money transfers.
“High fees, slow settlement, and lack of innovation in cross-border payments have negatively impacted the developing world,” said Jack Mallers, Founder and CEO of Strike. “With exorbitant fees to transfer funds in and out of Africa and incumbent providers halting services, payments companies are struggling to operate in Africa and people cannot send money home to their family members. Strike offers an opportunity for people to transfer their US dollars easily and instantly across borders.”
One of the main goals of the new service is to help increase access to inexpensive banking services on a continent that has historically been excluded from the global financial system.
“The current financial system isn't set up in a way that ensures equal access for people and institutions from Africa,” said Bernard Parah, Founder and CEO of Bitnob. “What we have built reduces the pressure on our financial institutions in sourcing USD liquidity. People can now easily exchange value from the US to people in Africa in the cheapest way possible. We can now save people sending money back home to Africa billions of USD in transfer fees.”
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| IMF says Africa's burgeoning crypto market poses risks, needs regulation |
Moving forward, Strike intends to continue its expansion into Africa by developing additional partnerships, including a collaboration with Chipper Cash, one of Africa’s largest peer-to-peer and cross-border payment service providers.
According to data from Chainalysis, Africa is one of the fastest-growing crypto markets in the world but remains the smallest active market, with crypto transactions peaking at $20 billion per month in mid-2021.
As a result of the fast-paced growth, the IMF has called for increased regulation of the region's crypto market, citing the ability of cryptocurrencies to “be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows.” The IMF also warned that the “widespread use of crypto could undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.”
