Binance Labs, a decentralized organization that aims to “incubate, invest, and empower blockchain and cryptocurrency entrepreneurs, projects, and communities,” is betting on Africa’s large young population and the lack of strong established financial systems in its strategy of establishing on the continent.
According to the Director of Binance Labs, Benjamin Rameau, the social fund is committed to Africa, as it sets sights on the vast untapped opportunities on the continent. Rameau notes that emerging technologies of blockchain, cryptocurrencies, and decentralized autonomous organizations (DAOs) have a higher ability to transform Africa than any other continent in the world.
— Bitcoin Kenya (@BitcoinKE) September 11, 2018
“In developed markets, crypto has the potential to disrupt a flawed financial system. That is significant, but not necessarily transformative. In emerging and frontier markets, it has the potential to create a financial system where none existed before. This will form the backbone to a strong economy.” Rameau observes.
According to the World Population Review, 41 per cent of the African population is below 15 years, which means the continent has the youngest population in the world.
In his article, Rameau notes that decentralization will address challenges in the governance and job sectors in Africa. Decentralization will also be important when it comes to scaling operations across the continent.
The dynamic nature of Africa, which has 54 countries and over 2,000 languages, makes scaling operations across borders difficult. “Every time [a company enters] a new market, [it] must register a new bank account, which in turn necessitates company registration, bureaucracy and hiring local staff.” Rameau explains.
However, this problem can be solved using DAOs which have their own tokens and do not need to depend on banks. In a decentralized Africa, industrial parks will also be a thing of the past, thanks to crowdsourcing and decentralized communities.
For example, “a bicycle may have its derailleur designed by a freelancer in Munich, the frame designed in Dakar and the manufacturing done on premise with a 3D printer at Addis Ababa.” Rameau predicts.
Leveraging Cryptocurrencies to Create Wealth
Rameau says that stable cryptocurrencies have the ability to cushion Africans from highly inflationary fiat currencies. This means that people can save and invest more, and therefore, experience increased economic growth.
On the other hand, blockchain technology can utilize the underused labor pool in Africa as well as ensure that property rights are upheld in Rameau’s view.
Recently, crypto exchange Binance launched its services in Uganda after partnering with Crypto Savannah, Made in Africa initiative, and Msingi East Africa to boost economic development in the country.