Binance Uganda, a country where almost 75 percent of the population is unbanked, has announced they have signed up 40,000 users during their first week.
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“For Africa as a whole, this is just step one for Binance to serve Africa,” said Binance’s chief financial officer Wei Zhou.
Currently, only bitcoin (BTC) and Ether (ETH) are available for purchase on the emerging Binance Uganda platform.
According to a Stanford University study recently published in the American Economic Journal, 74 percent of Uganda citizens are unbanked.
“They [customers] just have to have money within the mobile payment system. They don’t have to have bank accounts,” said Zhou.
Unlike the traditional Binance platform, Binance Uganda has partnered with a mobile payment provider which converts fiat to BTC or ETH. Due to safety concerns, the local payment provider has chosen to remain anonymous.
“One of the major issues in the region, in the continent, right now is liquidity and Binance will bring us liquidity,” said Marvin Coleby an entrepreneur in nearby Kenya, co-trustee of the African Digital Asset Framework.
“These digital assets can move, borderless, around the continent.”
The firm is still experiencing large onboarding processes, including verifying government-issued IDs.
Before Binance Uganda, citizens who were interested in acquiring cryptocurrency relied on LocalBitcoins.com, a peer-to-peer exchange.
Now that Binance Uganda has blazed a new trail, several other global exchanges have contacted regulators in the region, according to Kwame Rugunda, chairman of the Uganda Blockchain Association and co-founder of the Ugandan blockchain startup CryptoSavannah.
“We’ve already heard of interest from other players that are looking at the Ugandan market,” he said.
Other considerations for cryptocurrency implementation in Uganda include agricultural unemployment and the need for imported products.
“There’s a large consumer market for people purchasing cars, for example, because bitcoin is legal tender in Japan,” where the cars are manufactured, Rugunda said.
According to the International Labour Office, approximately 15 percent of working-age Ugandans under 30 are unemployed in 2017.
Roughly 49 percent of those employed only had irregular or temporary work. As such, many are becoming self-employed.
“Unemployment is another real factor,” Rugunda added.
“It forces people to look outside of formal employment structures.”
Zhou agreed stating Uganda is “an up-and-coming African country” with a relatively crypto-friendly and stable political system.