The recent FTX investment into Chipper Cash is one of the ways that the FTX crypto exchange is looking to enter the African continent by having an on and off-ramp for African users.
Chipper Cash provides fee-free peer-to-peer cash transfers in several Sub-Saharan African countries, including Nigeria, Ghana, Tanzania, and South Africa. The company has also begun to expand its services to Europe in order to facilitate remittances from African expatriates living abroad.
As part of the agreement, FTX users in Africa will be able to use Chipper Cash on the FTX trading platform in the near future. This collaboration, according to FTX CEO Sam Bankman-Fried, is a “compelling use case” for both companies because it expands the fintech firm’s network API integration.
In essence, Africans who use FTX will have the option to “Pay with Chipper Cash” on the crypto trading platform.
According to FTX CEO, Bankman-Fried stated:
“That’s going to be a compelling use case for both of our companies as we keep scaling and as FTX keeps scaling their geographical coverage.
They do some of the most innovative work in the crypto space, so working with them is going to be quite exciting.”
– CEO, FTX
Given its recent pilot test of digital currency peer-to-peer transfers in South Africa and Uganda, the partnership could also help the company’s pivot to cryptocurrency payments.
“Despite recent growth in Africa, money transfer across the continent remains slow and costly. Unsurprisingly, it is the fastest-growing market in terms of grassroots cryptocurrency adoption.”
– CEO, FTX
As per a Chainalysis report published in September 2021, Africa’s crypto market increased by more than $105 billion between June 2020 and July 2021 with cryptocurrencies appearing to offer a viable channel for improving remittance flows.
Crypto adoption has also increased in tandem with the continent’s general expansion of fintech services, which typically aims to improve access to financial services for the unbanked demographic.
A ‘Pay with Chipper Cash’ option on FTX will be a huge step forward to the exchange on a continent where on and off-ramping for centralized exchanges remains a big challenge due to a lack of clear regulatory frameworks.