Binance’s New Hub
Binance is the world’s leading trader of cryptocurrencies. Binance is seeking to open a new hub that will provide jobs to Cameroonians and educate locals on cryptocurrencies. Cryptocurrencies are internet-based currencies without one controlling authority to maintain them. Many seek them out in Africa because they explore economic possibilities many Africans are not privy to due to lacking credit history. Binance’s new hub has the chance to offer jobs in an economically bountiful field.

Cryptocurrency in Africa

Cryptocurrency has been gaining traction in Africa as a potential way to improve nations’ economic standings, but they are not new to Africa. In Africa, the Central Republic of Africa adopted cryptocurrency as its main currency in April 2022. Other African nations have their forms of cryptocurrency, such as Kenya’s M-Pesa (mobile pesa) or Nigeria’s eNaira, a digital version of its currency. The Nigerian President, Muhammadu Buhari, publicly stated his hopes and expectations that adopting the eNaira will boost Nigeria’s Gross Domestic Product by $29 billion.

It is not an unrealistic expectation because the African cryptocurrency market earned an additional $109 billion by the end of 2021. Cryptocurrency requires a significant alteration to the current infrastructure, which Africa has struggled to build due to its long history of colonialism and civil wars. The lack of infrastructure has left many without banking services. However, cryptocurrencies do not require a direct line to one regional bank. Cryptocurrencies are an international phenomenon that people can connect to with their smartphones. Internet and communications connectivity have been growing in Africa, and the hard work of developing the tech infrastructure in Africa has paid off. Jobs are emerging in the tech sector every day, and cryptocurrency use in Africa will provide another economic boost. Binance’s new hub will be a leader in the development and creation of tech and connecting urban and rural Cameroonians.

Poverty in Cameroon

Poverty is an overwhelming factor in everyday life for Cameroonians. About 55% of Cameroon’s population lives in poverty. There are many factors, one of which is that the country has a rather undiversified economic portfolio. Cameroon’s income and Gross Domestic Product (GDP) rely on the agriculture sector. Agriculture accounts for 15% of the GDP and 62% of the workforce.

The lack of infrastructure that has been a lingering problem for significant portions of Africa is still a concern in Cameroon. Cameroon struggles with infrastructure because they do not have the funding to solve its infrastructure issues. Infrastructure in Cameroon is an expensive endeavor. To make matters worse, the Cameroon government, which many sources cite as weak, does not have the proper funding to fully develop the nation’s infrastructure. Infrastructure costs Cameroon $930 million annually. Unfortunately, Cameroon loses $586 million of its infrastructural costs due to infrastructural inefficiencies.

Despite what the numbers might say on the surface, Cameroon’s economy has strengthened, and the thought of escaping poverty is a little more real. One of the Cameroon sectors that has found footing and increased its annual earnings is the gas and oil industry. The gas and oil industry earned $465,293,665 at the end of April 2022. This sector has become more reliant and has proven valuable to residents as the income generates economic flow and will decrease regional poverty. The strengthening economy and potentially improving infrastructure are what have convinced international Bitcoin/cryptocurrency operator Binance to move operations into Cameroon. Binance’s new hub will provide diversification to Cameroon’s economic needs. It will help modernize them to make the country more attractive to international investors.

Technology and Introducing Cryptocurrency in Cameroon

Binance’s new hub comes after the company looked at  Cameroon and saw the unlocked potential of Cameroon’s tech world. The new hub will be in Yaoundé, to be a hub for Cameroon businesses. The tech world of Cameroon is still in its developmental stages. Technology is an up-and-coming sector for Cameroon’s businesses. It is one of the more sought-after fields to lift Cameroon’s GDP and boost the economy. Many of the users and developers of the new tech sector are without proper funding to create the promising economic future economists see if Cameroon’s tech world can boom.

One of the best ways for Cameroon to create the tech sector is by starting with cryptocurrency. Unfortunately, Cameroon does not regulate cryptocurrency yet and remains an illegal currency. The economic benefits of spreading cryptocurrency in Cameroon, though, are numerous. Introducing any legalized cryptocurrency in Cameroon will create connectivity among regions, one of the causes of poverty in Cameroon. Digital money should provide new opportunities for the government to settle its debts too. Cryptocurrency will force new policy initiatives to regulate the cryptocurrency sector of the economy. Cryptocurrency’s introduction into Cameroon will provide further benefits as cryptocurrency’s spread will require jobs for people to act as traders, internet connectivity engineers, brokers and more.

Looking Ahead

Binance’s new hub will educate Cameroonians on cryptocurrency. It will help them develop their economic portfolios with hands-on experienced cryptocurrency brokers. Binance wants Cameroonians to see the benefits and all the available resources cryptocurrency can create. The goal is for Binance’s new hub to become a cultural center that unites Cameroonians and improves how foreign investors look at Cameroon. Overall, the economic benefits of cryptocurrency and Binance’s new hub are countless. With cryptocurrency, Cameroon will see economic growth, decreasing poverty rates, increased foreign investments and the feasibility of finding income with Binance’s new hub.

– Clara Mulvihill
Photo: Flickr

Bitcoin in Honduras
Honduras has one of Central America’s most robust and fastest-growing economies. Still, there is no doubt that the nation has had its fair share of economic strife. In April 2022, a heavily tourist-populated region nicknamed “Honduras Prospera” legalized the use of Bitcoin and other forms of cryptocurrency. Honduras Prospera will serve as a trial for Bitcoin usage in Honduras, with expectations for future growth.

Economic Struggles in Honduras

Honduras’ economy has certainly had its struggles. Hopefully, by introducing Bitcoin in Honduras, the country’s economic struggles will diminish. In the pre-COVID-19 pandemic age, in 2018, at least 16.5% of Hondurans lived on less than $1.90 a day. Since 2019, two significant hurricanes and natural disasters have impacted the nation and exacerbated the number of people in poverty due to the pandemic and its effects. In 2021, the poverty rate reached 73% with the extreme poverty rate reaching 53%. That marks the highest poverty and extreme poverty rates in Honduras since 2005.

One of the primary reasons Honduras’ economy has struggled is its dependence on agriculture and trade with the United States. If either of these sectors struggles, the entire economy struggles. Honduras’ agriculture accounted for slightly less than 30% of the country’s workforce in 2019 and is responsible for at least 12% of Honduras’ Gross Domestic Product (GDP).

Honduras’s trade with the United States accounts for about 41% of all Honduran trade annually. At the end of 2020, the bilateral trade earnings were more than $9 billion with a surplus that unfortunately only favored the U.S. Despite the immense difficulties the country has experienced since 2019, Honduras’s economic projections have been optimistic, with expected annual economic growth of 4.5%. The acceptance of Bitcoin and cryptocurrencies in Honduras will allow that figure to increase by the end of the next fiscal year.

Benefits of Accepting Cryptocurrency for Honduras

Introducing Bitcoin in Honduras has many benefits for the Prospera region before the rest of Honduras follows suit. The usage of Bitcoin in Honduras aims to entice foreign investors and make tourist spending easier to facilitate. It is a move following the introduction of Bitcoin in El Salvador, one of Honduras’s neighboring countries. Bitcoin in Honduras and El Salvador, while likely to face technical challenges in the early stages, intend to bring new business opportunities across borders and in international markets.

Cryptocurrency and Bitcoin have significant potential for economic security and allow for lower transaction fees. The decreased costs will encourage foreign investors and encourage locals to make use of Bitcoin as well. The lowered fees will prove beneficial to those living in poverty as they work to avoid extra costs and fees. One of the greatest challenges to implementing Bitcoin and cryptocurrencies anywhere is the technological barriers many places face. These include setting up a digital wallet. However, as Honduras Prospera is a tourist destination and is prepared for technological changes, it is a perfect location for a test run of cryptocurrency use.

Having Bitcoin in Honduras will open the door for new employment opportunities and can diversify the financial foundation of Honduras’s economy. The diversification of Honduras’ economy will allow for future safety should its agricultural foundation falter or trade with the U.S. become too difficult.

Honduras’s Economic Future

People do not widely accept the idea of Bitcoin in Honduras, as the first rollout of Bitcoin and cryptocurrencies are only taking place in one region of the country. Hondurans are skeptical of the economic advantages of Bitcoin after seeing the difficulties El Salvador has faced in its first weeks of using the cryptocurrencies.

One of the best ways to bring about economic growth in Honduras is to increase economic competition in all regions of the country, especially in the rural areas. The rural areas of Honduras are the most likely to experience poverty. Plus, with the benefits of Bitcoin in Honduras, including the lower transaction costs, Bitcoin should be able to easily spread to the country’s corners. Bitcoin also allows for merchant protection. Given Honduras’ heavy reliance on trade and the international economies and markets, the success in the piloting of Bitcoin will create even more support for introducing Bitcoin to the area.

Honduras’ estimated economic growth has stalled at about 4% since 2020. Honduras is still struggling to rebuild its infrastructure and economy since the COVID-19 pandemic and natural disasters hit, making any efforts to fix the problems invaluable. With the benefits of Bitcoin in Honduras, many already are finding popular Bitcoins for use, and with the need for any economic recovery, expanding Bitcoin’s availability for use will likely receive significant support. There are many websites already helping Hondurans find the best Bitcoin or cryptocurrency to use and the first Bitcoin ATM opened in August 2021. The expansion of Bitcoin will lead to economic growth in Honduras. It might allow Honduras’s economy to exceed expectations for its annual economic growth, thus amplifying the impacts of cryptocurrencies.

Clara Mulvihill
Photo: Flickr

Remittances to Venezuela
The International Monetary Fund (IMF) defines remittances as “money transfers from citizens working abroad” as a contribution to the household income of their families in their home countries. The IMF sees remittances as a “lifeline for development,” especially in impoverished countries such as Venezuela. In Venezuela, the influx of remittances is growing rapidly and represents a large source of foreign income for Venezuelans. While remittances typically take the form of cash transfers, crypto remittances to Venezuela are playing a larger role in facilitating international transactions and becoming a vital source of income for Venezuelans, especially during the COVID-19 pandemic while the country faces hyperinflation and U.S. economic sanctions.

The Role of Remittances in Global Poverty Reduction

Remittances directly bolster the income of households that receive these payments and provide essential resources for the impoverished. The value of remittances lies in the fact that governance issues often linked to “official aid” do not impact remittances. Instead, remittances are able to circumvent “red tape” because the money goes directly into the pockets of the impoverished. According to the World Bank, “a 10% increase in per capita official remittances may lead to a 3.5% decline in the share of [impoverished] people,” further showing that remittances play a key role in poverty reduction. Harnessing technology and non-traditional approaches for remittances allow Venezuelans the opportunity to send and access this funding in a faster and more efficient way.

The Resiliency of Remittances

Experts expected remittances to decrease due to job insecurity abroad as a result of the pandemic. However, the flow of remittances remained resilient. According to the World Bank, remittances to developing countries only dropped 1.6% in 2020. Digitization of payments allows for a steady flow of remittances to countries like Venezuela —  according to a report by Global System for Mobile Communications, “international remittances processed via mobile money increased by 65% in 2020.” In 2018, United Nations member states adopted the Global Compact on Safe, Orderly and Regular Migration, which recognizes the importance of remittances in the development of poverty-stricken countries such as Venezuela.

Cryptocurrency in the Context of Hyperinflation

As the bolivar continues to depreciate in Venezuela, cryptocurrency functions in a way that circumvents hyperinflation. Cryptocurrency is a decentralized form of currency, where its value does not stem from fiat currency or natural resources, but instead, derives from user demand. In 2021, the Venezuelan government introduced the 1-million-bolivar bill, which is equivalent to about $0.52, in an attempt to remedy the impacts of hyperinflation and economic sanctions. Venezuela has experienced hyperinflation due to falling oil prices, resulting in the government printing vast quantities of currency as a potential solution, but this only further devalued the bolivar. Increasingly, residents are turning to digital forms of payments. For example, street vendors in the Venezuelan capital of Caracas are accepting digital coins as a form of payment.

5 Benefits of Crypto Remittances to Venezuela

  1. Stability: Cryptocurrency remains steady compared to fiat currency, especially during times of inflation.
  2. Lower Fees: Commission fees for crypto remittances are lower in comparison to international transfer fees from companies like Western Union.
  3. Money and Time-Saving Costs: Research shows that crypto remittances “produce a 1% saving of income” because of the reduction of travel and wait time when sending remittances.
  4. Safety: Because Venezuela stands as “one of the most insecure [nations] in Latin America,” residents face the risk of theft when traveling with cash. Digital currency offers a degree of security and protection for people as their funds are stored on their devices.
  5. Continuing the Flow of Remittances: As the Maduro regime takes steps to further regulate remittances while rejecting foreign humanitarian aid, decentralized currencies could allow residents to continue receiving essential monetary flows.

Remittances to Venezuela’s Unbanked Population

According to the Global Findex Database, in 2017, close to 73% of Venezuelans had bank accounts and digital forms of receiving money are increasing each year as inflation devalues fiat currency and hyperinflation threatens the affordability of basic needs. More than 50% of transactions in the country use the U.S. dollar, and in 2020, experts projected that annual remittances would climb to $4 billion. The viability and sustainability of digital remittances, specifically cryptocurrency forms, are becoming more popular.

GiveCrypto Uses Cryptocurrency to Provide Aid to Venezuelans

As Venezuela continues to experience a financial crisis, cryptocurrency, such as Bitcoin, offers a degree of stability as an inflation-proof asset. Many nonprofits implement cryptocurrency in their strategies to bring aid to Venezuelans. In 2019, U.S.-based charity, GiveCrypto, “provided temporary assistance to hundreds of vulnerable families in Venezuela through weekly crypto deposits worth around $7,” which is equivalent “to the monthly minimum wage” in the country. This aid helped families purchase food and other essential goods.

In addition to aid, the organization provides resources that educate people about crypto apps to ensure that people have complete control of their digital currency. Efrain Pineda, the program manager, says, “We want to show that people who are not techies or investors can also benefit from this technology. Anyone can use crypto to protect themselves from inflation and make their daily life easier.”

Cryptocurrency Offers Hope for Venezuelans

With little end in sight for hyperinflation, Bitcoin is gaining traction as an alternative as traditional payment methods become regulated and overloaded. Venezuela ranks fourth globally for Bitcoin trade, and as more people flee Venezuela, digital forms of remittances continue to be an invaluable source of income for residents who remain.

– Jennifer Hendricks
Photo: Flickr

Destabilize Authoritarian Regimes
Development experts claim that freedom is a necessity in the fight to end poverty, yet more than 2.5 billion people around the globe live under authoritarian rule. As the world becomes increasingly digital, powerful autocrats gain access to virtual tools capable of stifling dissent and quashing liberty. Nowhere is this more evident than in China, where the government has taken steps to replace paper cash with a digital currency that central banks back. The transition would allow state officials to monitor the purchases and activities of every Chinese citizen, as well as enable the central banks to freeze an individual’s assets should they threaten party doctrines. However, blockchain could help destabilize authoritarian regimes.

How Blockchain Works to Destabilize Authoritarian Regimes

The blockchain, which Satoshi Nakamoto created in 2008, is an encrypted digital network that records information in a decentralized database. Nakamoto’s invention has paved the way for cryptocurrencies such as Bitcoin, Litecoin and Cardano to revolutionize the financial sector. The nature of cryptocurrency is such that governments cannot manipulate them nor monitor them; they are secure, private and resistant to authoritarian fiscal policy. Cryptocurrency “takes control of people’s monetary futures away from governments and places it in the hands of individuals,” said Ross Gerber, the CEO of Kawasaki Wealth and Investment Management. Nicolas Maduro cannot print crypto coins like the Venezuelan bolivar. Miguel Diaz-Canel and the Cuban government cannot intercept remittances that go to one’s crypto-wallet. Vladimir Putin cannot surveil transactions on encrypted trading platforms. Additionally, Xi Jinping cannot freeze crypto-accounts. Cryptocurrencies are actively destabilizing authoritarian regimes.

Laws Against Peer-to-Peer Exchanges

It should come as no surprise, then, that Algeria, Bolivia, Egypt, Iran and Russia have passed laws restricting peer-to-peer exchanges. Perhaps none have cracked down harder than China’s President, who enacted a comprehensive ban in September 2021. However, such legislation is more symbolic than practical, as cryptocurrency usage persists in each of the aforementioned nations. Alexei Navalny, a notorious Putin-critic and opposition leader, raised more than $300,000 with Bitcoin after the administration jailed him. Something similar happened in Nigeria; the government froze the assets of activists protesting a violent police force but they received supplementation through an infusion of cryptocurrency from supporters. “The only way to ‘shut down’ cryptocurrency is to disconnect the internet,” said David Yermack, a professor at NYU, adding that a government might just as well attempt to ban the sun from rising.

How Blockchains Can Revolutionize Information

The utility of Nakamoto’s blockchain with regard to destabilizing authoritarian regimes is more than fiscal. In the same way that Bitcoin revolutionized the financial world, so too will blockchain search engines revolutionize information. Such innovations offer trustworthy alternatives to state-run propaganda machines that specialize in misinformation. Readers will have “access to unbiased information online, as well as more ownership of their personal data and real digital privacy,” said Colin Pape, the founder of a decentralized search engine. With the groundbreaking technology, civilians living under authoritarian rule can circumvent these information blockades by logging into an encrypted web browser, verified by users around the globe in much the way that crypto miners authenticate Bitcoin exchanges, that tracks for credibility and accuracy.

The technologies that can destabilize authoritarian regimes are at the world’s disposal. It is essential to encourage their adoption and use in countries that lack freedom. Thanks in part to Nakamoto’s invention, authoritarianism could someday be a relic of the past, and poverty with it.

– Thomas Willhoite
Photo: Flickr

AkoinYoung entrepreneurs in Africa face unique obstacles when starting their own businesses, which prolongs Africa’s development. Akon, the multi-platinum-selling singer and recording artist, is originally from Senegal in Africa. Therefore, he has a deep understanding of the economic strife facing Africa due to inflation and financial instability. On top of this, about 350 million adults in sub-Saharan Africa remain unbanked, equivalent to 17% of the world’s total unbanked. Akon aims to change this by introducing the Akoin cryptocurrency.

Why Akoin?

Akon is using blockchain technology to help African entrepreneurs. He seeks to provide them with the tools necessary to overcome the difficulty of working between more than 40 currencies across 54 African countries by uniting currencies. With the Akoin cryptocurrency, seamless transfers within and across borders could be possible.

In the early months of 2021, the youth of Senegal took to the streets to protest the economic instability and unemployment facing their generation, highlighting the need for a new economic recovery plan. Although the economy in Senegal has grown in recent years, the growth has not always meant growth in jobs for young adults.

Akon is aggressively seeking to reach his goal of implementing Akoin in Africa because “[i]t brings the power back to the people and brings the security back into the currency system.” The singer-turned-social rights advocate seeks to implement Akoin as a form of payment to provide users access to a suite of business tools. Additionally, the construction of Akon City has been approved by the Senegalese government. Construction will take an estimated 10 years with the cost of this futuristic city being an estimated $6 billion, supported by Akon and other investors.

How it Works

Akoin, the African cryptocurrency token, is part of a decentralized exchange ecosystem that allows users to trade tokens and other cryptocurrencies between each other or major exchanges. After making this technology accessible to emerging entrepreneurs and helping them with the extensive paperwork required by banks when starting a new business, Akon could strengthen the African economy with a stronger infrastructure for startups.

Unlike other cryptocurrencies, Akoin is specific to Africa and seeks to provide optimal support as a transaction medium in otherwise hard-to-reach areas. One major obstacle to the African adoption of cryptocurrency as tender is government uneasiness. Signs show that the wariness of another legal tender remains, potentially due to a lack of public knowledge and the possible insecurity that comes with blockchain technology’s anonymity.

Looking Foward

With Africa awaiting a crypto boom, Akon makes the clarification that Akoin does not necessarily need to be deemed legal tender, only an “alternative financial solutio[n].” According to Chainalysis, a blockchain analytics firm, South Africa, Kenya and Nigeria are ranked among world leaders in peer-to-peer crypto transactions. Mwale Technological and Medical City have beta-tested the transaction platform. More than 2,000 merchants utilized the technology as the “sole currency and payment processor.

Hope remains for the Senegalese government’s adoption of Akoin. Leaders of the African cryptocurrency scene are hopeful for more African countries to adopt and primarily benefit from the plethora of crypto applications.

– Melanie Goldsmith
Photo: Flickr

Cryptocurrency in NigeriaNigeria has the highest GDP out of all the African countries, but 40% of its population lives in poverty. The country’s struggling economy primarily relies upon oil exports, accounting for more than half of government revenue. Lacking transport and energy infrastructure as well as neglecting to diversify the economy results in a disadvantaged population of impoverished people. The use of cryptocurrency in Nigeria is proving to be a beneficial solution to help lift people out of poverty.

Boosting Supplemental Income

The 2016 recession caused a significant strain on Nigeria’s economy and the country is still struggling to recover. In the second quarter of 2020, the country reported a 27.1% growth in unemployment. Average incomes have been declining for six years straight and experts predict there will be less than a 2% rise in income during 2021. The value of the country’s national currency, the naira, fell by 24% in 2020. This economic downturn caused some Nigerians to seek supplemental income.

A 2020 survey indicates that 32% of Nigerians participate in buying and trading cryptocurrency. In 2020, Nigeria accounted for $400 million worth of cryptocurrency transactions, ranking it third globally in trading volume. Cryptocurrency in Nigeria has so far positively enriched the lives of impoverished citizens. For example, a Nigerian cryptocurrency investor, Tola Fadugbagbe, credits cryptocurrency for lifting him out of poverty. Initially struggling to survive on minimum wage odd jobs, Fadugbagbe now earns enough money from cryptocurrency trading to build his own house and purchase a farm.

Ease of Banking

Approximately 60 million Nigerians do not possess a bank account. People who do have bank accounts can only withdraw less than the equivalent of $100 due to local bank restrictions. The hurdles have led to a shift toward mobile banking and cryptocurrency investments. In 2017, reports showed that 71% of Nigerians use mobile phones for communication and internet access. Mobile platforms, including Xend Finance, allow Nigerians to transform their funds into cryptocurrencies. One cryptocurrency that has become popular is stablecoin, which has minimal transaction fees. Stablecoins provide the added benefit of protecting funds from devaluation.

Providing Educational Opportunities

Cryptocurrency in Nigeria is also bringing about educational opportunities. In September 2020, the #BuiltWithBitcoin campaign, led by the bitcoin marketplace Paxful, began construction of a new school in the Nigerian area of Sanga. Paxful is a cryptocurrency exchange platform that operates on a peer-to-peer basis. Nigerians use the platform to make nearly 1.1 million monthly blockchain transactions.

The new school expects to serve 100 to 120 children from ages 3-6. During the evenings, it will function as an adult education facility. Additionally, features of the school will include a water well and solar power. The water from the well can also be sold to the community at a low cost. Paxful will cover all costs needed to run the school such as school uniforms, educational resources and salaries.

The upsurge in cryptocurrency transactions has had a profound effect on many Nigerians seeking a way out of poverty. Nigerians are capitalizing on the educational opportunities and supplemental income cryptocurrency brings. The unexpected benefits of cryptocurrency in Nigeria bring hope to citizens living in poverty.

Tiara Tyson
Photo: Flickr

cryptocurrency in AfricaCryptocurrency in Africa has become increasingly popular over the last couple of years, as many people become more interested in the possible economic benefits that can come from the new technology. Cryptocurrency is entirely digital money that uses a decentralized system. As a result, there is not one entity with complete authority over the process. The whole system works over the internet allowing transactions to happen anywhere in the world with no government regulation. Bitcoin, created in 2009, is the leading cryptocurrency company in Africa. There are a variety of users, from individuals to small businesses, that use the technology for investments, banking and payment transfers across borders.

Why Cryptocurrency is So Popular in Africa

In April 2019, Google Trends data showed that Nigeria had the world’s most searches for Bitcoin. Also in 2019, South Africa has the highest volume of cryptocurrency ownership compared to internet users. It was found that 10.7% of internet users in South Africa owned Bitcoin compared to the worldwide average of 5.5%.

In 2020, despite the global economic uncertainties, COVID-19 brought by businesses closing and people not working, Bitcoin trading has continued to increase in Africa. In May 2020, Nigeria had the highest trading volume in one week at $7.2 million, its third-best P2P trading week. Kenya was second with another record week by trading $1.6 million. South Africa came in third exchanging $1.1 million in a week.

Cryptocurrency in Africa mainly gained wide popularity because of high inflation rates across the continent. In 2018, South Sudan saw rates of 83.5% compared to the previous year. Other countries like Nigeria, Ghana and Zimbabwe, who printed $100 trillion notes worth only $40 in 2015, also experienced double-digit inflation rates. These hyperinflation rates had many citizens doubting the economic services of their central banks and governments.

Benefits of Cryptocurrency

In an effort to protect their money from the economic turmoil in their country, Africans started transitioning to Bitcoin. Since companies like Bitcoin have no single domain, the money inside the company is not affected by a single country’s inflation rate, which allows the citizens of African countries to protect their money from a failing economy. As a result, trust for these cryptocurrency companies builds.

Cryptocurrency in African also gives its people the ability to make cross-border payments. Some African countries have a history of fraud which had caused problems with international money transfers. In Nigeria, PayPal banned citizens from receiving money from other nations because of the country’s problems with fraud. However, cryptocurrency allows these citizens to transfer and receive money from anywhere around the world without the high fees that other money transfer companies usually have.

Cryptocurrency companies are blockchain technology that stores public records in a decentralized system. This also makes it impossible to alter transactions and assets. Many African countries use this new technology, through companies like Bitcoin, to elevate their status. They also use this technology to continue pushing their economy up to a level playing field with other nations. In 2019, Kenya and Nigeria announced plans to work more closely with these companies. These countries hope that by regulating cryptocurrency companies and their technology, the governments can begin bringing its people out of immense poverty and start becoming a greater global power.

– George Hashemi 
Photo: Flickr

Cryptocurrency in Bulgaria

In the years following the fall of the Eastern Bloc, Bulgaria still struggles in comparison with the rest of Europe. As of 2016, the government of Bulgaria reported that an estimated 23.4 percent of its population lived below the poverty line, while as of 2017 the unemployed constituted around 6.2 percent of the population. Bulgaria also happens to have the lowest annual salary, minimum wage and average pension amount in Europe, while also suffering high rates of outmigration, governmental corruption and overall mortality. Though these problems may appear overwhelming, the use of cryptocurrency in Bulgaria provides a means by which steps may be taken to mitigate these issues.

Fundamentals of Cryptocurrency

As a medium of exchange, cryptocurrency by its very nature expedites humanitarian aid to distressed regions. This is because it sidesteps the need for a financial institution as an intermediary between grantor and recipient, thus providing a means of direct payment for potentially large amounts. The realities of governmental and organizational corruption and incompetence that hinder international aid may be entirely evaded, resulting in more effective and efficient aid conveyance even to the most turbulent locations.

Furthermore, an estimated 40 percent of adults, mostly residing in the developing world, face impediments to the formation of a financial identity that may appear nearly insurmountable. However, cryptocurrency provides an alternative means by which people without easy access to financial institutions or who lack sufficient capital to open a bank account may establish a financial identity and improve their chances of escaping poverty. Moreover, despite the market volatility of cryptocurrency in Bulgaria and throughout the world, it provides a fairly stable alternative compared to entrusting one’s assets in banks and other financial institutions. Savings stored as cryptocurrency are less likely to be subject to the vicissitudes of inflation, corrupt governments and asset appropriation.

How an NGO Uses Cryptocurrency in Bulgaria

The BitHope Foundation, an NGO established by Vladislav Dramaliev, provides a global crowdfunding platform for humanitarian initiatives. As the first charitable platform of its kind established on the basis of cryptocurrency in Bulgaria, it seeks to facilitate NGOs and individuals alike in their fundraising efforts. This organization hopes to incentivize businesses that accept cryptocurrency to invest in these causes, which will further bolster the public impression and acceptance of cryptocurrency as a legitimate medium of exchange.

Many crowdfunding campaigns hosted through the BitHope Foundation’s website are considered to be humanitarian successes in Bulgaria. For instance, the “Support Burgas Municipality After the Floods” campaign raised €1,749 in cryptocurrency or approximately $1,925, in response to floods that damaged parts of Burgas municipality, a region of Bulgaria on the Black Sea coast. These charitable contributions went toward the purchase of household needs including refrigerators and microwave ovens for those affected by the floods.

Specific Campaigns by BitHope

  • “Every Child Deserves A Holiday” aimed to raise charitable funds for families living below the poverty line, raising €588 or approximately $647, in cryptocurrency.
  • The “Support Positive and Character Education” campaign, which raised the equivalent of €786 (approximately $865), sought funding for programs designed to inspire children and parents to persist with schooling regardless of what predicaments may arise.
  • The “Sports Charity League” campaign enabled the funding of sports competitions for children and adolescents, after raising a cryptocurrency total of €1,522 or $1,674.
  • The 2017 funding campaign “Preeclampsia? I want to know” raised €1,132 ($1,373) for the acquisition of biomedical tests for use in screening pregnant women without charge for the potentially serious medical condition preeclampsia.
  • Also in 2017, a campaign called “Hope for Mental Health” accrued €358 ($434) in funds to assist mentally disabled children and adults in obtaining health care.

BitHope in the Present

These successes emerged in spite of numerous impediments standing in the way of using cryptocurrency in Bulgaria. Besides a global decline in the total market cap of cryptocurrency from $604 billion to $131 billion in 2018, the Bulgarian government persists throughout 2019 in its refusal to allow cryptocurrency-based organizations to open a bank account for the storage of cryptocurrency. Although this complicates the withdrawal of funds, the cryptocurrency conversion process, accounting, tax payments and payments to internet service providers, such difficulties have made the BitHope Foundation more resilient in its fight to address humanitarian issues in Bulgaria.

– Philip Daniel Glass
Photo: Flickr

Cryptocurrency and Poverty Reduction
An increasing number of nonprofit organizations are looking to cryptocurrency to help reduce global poverty. The immediacy, inclusivity and stability that cryptocurrency promotes could be invaluable for those who are in crisis, lack access to a bank or struggle due to hyperinflation. Here are four examples of how cryptocurrency and poverty reduction are coming together:

GiveCrypto

GiveCrypto is a nonprofit organization that links cryptocurrency and global poverty reduction. Since founding members currently cover operating fees, 100 percent of the funds GiveCrypto accumulates goes to the recipients. While Bitcoin is the most recognized cryptocurrency GiveCrypto uses, this nonprofit also transfers money through Bitcoin Cash, Litecoin, Ethereum, XRP and Zcash. GiveCrypto emerged on June 20, 2018, and has raised $4 million so far. The founders hope that GiveCrypto will improve the well-being of individual people struggling in their communities. However, they also intend for GiveCrypto to build up the economies of these communities. For this reason, the ultimate goal of the organization is “to help spark economic growth by giving access to property rights and financial services on an open network.”

CareBit

The founders of CareBit specifically designed the CARE coin for charity purposes. Unlike GiveCrypto which is merely a platform to distribute several different types of cryptocurrency to those living in poverty or financial crisis, CareBit is its own cryptocurrency. The purpose of creating the CARE coin is to link cryptocurrency and poverty reduction more directly. Currently, CareBit is the only independent charity on blockchain, a technology that documents and decentralizes transactions. By directly implementing a charity model into blockchain, CareBit is able to trace transactions to ensure that 100 percent of each donation reaches its intended recipient. The ultimate goal for CareBit is to increase transparency and to decrease fees, corruption and fraud in any given transaction.

BitGive

BitGive emerged in 2013 and is Bitcoin’s first nonprofit charity. BitGive partners with international relief organizations and local charities such as The Water Project, Medic Mobile and Save the Children. Just like CareBit, BitGive implements its charity directly into blockchain in order to effectively track donations and increase its efficiency. Additionally, BitGive uses the blockchain technology GiveTrack to publicly track financial information and share this information in real-time. With GiveTrack, donors can track funds and ensure donations reach their final destination. The other benefit of BitGive is that processing fees are considerably less. On average, 3.61 percent of donations go towards processing fees for the average nonprofit. On the other hand, BitGive spends less than one percent of donations on fees.

Binance Charity Foundation

The Binance Charity Foundation (BCF) is the philanthropic extension of Binance Exchange. BCF uses Binance Coin to integrate cryptocurrency and poverty reduction. In contrast to the nonprofits mentioned above which focus on financial poverty reduction, BCF specifically focuses on improving the overall health of women in developing countries. For instance, BCF has recently partnered with 46 other organizations to provide a one-year supply of sanitary products to approximately one million women. Women will receive these sanitary products by using the Pink Care Token (PCAT), a redemption-only token on the Binance blockchain.

Uniting cryptocurrency and poverty reduction initiatives demonstrates the increasing demand for improved donating systems in response to a lack of trust in how charities spend their funds. Thus, the increased transparency that cryptocurrency offers through blockchain’s traceability feature could potentially reassure donors and encourage them to donate. Whether or not cryptocurrencies will become influential enough to directly strengthen the economies of the developing world, however, is still unclear.

– Ariana Howard
Photo: Unsplash

Venezuela's Oil-Backed CryptocurrencyVenezuela is a region rich in oil and minerals, yet it suffers from poverty and political turmoil. Venezuelan president Nicolas Maduro is launching a new blockchain currency called Petro, an oil-backed cryptocurrency. The U.S. believes this to be an attempt to circumvent sanctions against the Venezuelan government and is cracking down on Venezuela’s oil-backed cryptocurrency.

Venezuela suffers from the “resource curse,” a phenomenon whereby its large reserves of oil negatively impact its economic growth and stability. Rather than a blessing, these energy reserves lead to fraud, corruption, wasteful spending, military adventurism and the authoritarianism of the Maduro regime. This curse exacerbates global poverty through the destabilization of the oil industry, dulling the effect of foreign assistance and creating a breeding ground for terrorism and instability.

Although the country has a vast supply of oil money, instead of going to Venezuela’s poor, the money ends up in the pockets of the rich. U.S. Senator Marco Rubio tweeted on February 9, 2018, regarding the Maduro regime, “Soldiers eat out of garbage cans & their families go hungry in #Venezuela while Maduro & friends live like kings & block humanitarian aid.”

Venezuelans are deprived of human rights guarantees and press freedoms, facing political persecution and public corruption by the Maduro regime. The U.S. regards the Maduro regime as a dictatorship, whose power has overridden the democratic will of Venezuelans. The nation’s population is greatly subjected to sex trafficking and forced labor, sexual exploitation and domestic servitude. People from other nations are trafficked for sex and labor in Venezuela. Cuba trafficks thousands of Cuban citizens and doctors into forced labor in Venezuelan social programs, in exchange for the provision of resources to the Cuban government.

The most recent U.S. sanctions were imposed in August 2017 against Venezuela’s dictatorship, blocking U.S. citizens from buying new debt, bonds, dividends or other distributions or profits from Venezuelan government-controlled entities and its state oil company, Petroleos de Venezuela (PDVSA). This followed December 2014 sanctions imposed by the U.S., aimed at preventing U.S. entry by persons involved in the erosion of human rights guarantees, political persecution and public corruption. These sanctions do not target the people or the economy of Venezuela; they are aimed at protecting the will of Venezuelans and preventing U.S. involvement with the corruption of the Maduro regime.

Maduro responded to these sanctions by implementing strategies to free the oil-centered economy from the U.S. dollar, despite its universality in global trade. In September 2017, Maduro ceased publishing Venezuelan crude oil market prices in U.S. dollars, instead publishing prices in Chinese yuan. His December 2017 announcement to implement the oil-backed cryptocurrency was in direct response to the August 2017 sanctions, stating that Petro could “help defeat the financial blockade.”

Cryptocurrency is decentralized, uncontrolled by banks or governments. It can benefit those living in politically unstable regions, because the government can neither control its value nor transfer it from state to state. In Venezuela’s case, the cryptocurrency will be backed by oil, an industry largely controlled by dictators. Because Petro is a cryptocurrency, it is difficult for the U.S. government to regulate, threatening the U.S. sanctions that prohibit investing in PDVSA.

Petro is one of many foreign exchange (FX) mechanisms introduced by Venezuela. Most of the FX failed to meet market demand for dollars, resulting in Venezuela’s robust black market. Although FX is prohibited on the black market, it is the driving force of hyperinflation. Continuously on the rise, one U.S. dollar is now equivalent to 9.9875 Venezuelan bolívar.

The U.S. addressed Venezuela’s oil-backed cryptocurrency in a letter by senators Marco Rubio and Bob Menendez to the U.S. Department of the Treasury, stating “we are concerned that a cryptocurrency could provide Maduro a mechanism by which to make payments to foreign lenders and bondholders in the United States, actions that would clearly thwart the intent of U.S.-imposed sanctions.”

In early February 2018, U.S. Secretary of State Rex Tillerson toured Latin America and the Caribbean. Afterward, Tillerson alluded to U.S. considerations of restricting oil sales from Venezuela due to its worsening political situation. Developments in trade sanctions are imminent as the U.S. cracks down on Venezuela’s oil-backed cryptocurrency.

In opposition to the Maduro regime, the Venezuelan Parliament stated that Petro’s creation only serves to “evade financial sanctions, [and is] openly violating the Constitution and legitimizing illicit transactions.”

As the U.S. cracks down on Venezuela’s oil-backed cryptocurrency, the government aims to combat the use of Petro to circumvent U.S. sanctions, prohibiting investors on U.S. soil from profiting or investing in the PDVSA, the driving source of Venezuela’s poverty and humanity crisis. These policies and sanctions will be heavily enforced in the face of Petro’s introduction to the market and will serve to reject the political corruption and economic failure to its people of the Maduro regime.

– Alex Galante

Photo: Flickr