Fintechs in Africa have been taking advantage of the smartphone’s importance in daily activities of Africans by creating more use cases for mobile airtime. Fonbnk, a decentralized application (dApp) is one of these interesting solutions for how to get fiat currency onto a crypto wallet.
The decentralized market-making dApp lets users convert the value on their existing prepaid mobile SIM cards into cryptocurrency. Another way to understand it is that it lets users turn any prepaid mobile SIM into a virtual debit card using the blockchain.
To achieve this, the dApp enables transacting with a network of airtime liquidity providers or market makers for their respective mobile carriers prepaid airtime credits.
According to Fonbnk, users can convert airtime from more than 1, 000 international phone networks into $MIN tokens, a dollar-pegged cryptocurency that exchanges at 1 MIB = $0.01.
“If a user in Nigeria wants to convert 411 NGN MTN mobile airtime credit into $1.00 USD of ETH, a user can swap their credit for Fonbnk’s ERC20 token, $MIN, which can currently be used to mint USDC and then be traded for ETH on select exchanges.”
In addition, Fonbnk has built a simple bridge to Celo wallets from its dApp enabling Fonbnk dApp users to convert their fiat-based prepaid airtime credits directly into Celo Dollars ($cUSD) from anywhere in the world regardless of their banking status.
Since its inception in 2020, the company has trading activity across all the leading Sub-Saharan African countries, generating:
Over $5 million in Gross Airtime Transactions
Nearly 100k transactions and
Over 50k new wallets
This represents an intriguing solution given that Africa has so far not had many easy solutions to help onboard Africans onto DeFi as they usually may need to use their credit cards to purchase crypto on an exchange first.