podcasts
Collection
Collection for podcasts • 511 items • Updated • 2
speaker stringclasses 5
values | text stringlengths 4 4.71k |
|---|---|
A | Welcome to Bankless, where we explore the frontier of Internet money and Internet finance. And today, on this episode of our Zuzalu series, we are exploring some new frontiers. New frontiers and new technologies, all of which are poised to completely revolutionize the world and change everything about the operating sys... |
B | Bangladesh nation. I'm here with Yosef Ayela. Yeah. |
C | Yes. |
B | Beautiful. |
C | You got it. |
B | And we're going to talk about crypto in Africa and why there's such a large opportunity for the web three industry. The crypto industry in Africa. Yosef, welcome to Bankless. |
C | Thanks so much for having me. |
B | First off, how has your Zalo experience been? |
C | It's been amazing. Amazing humans, great connections. I thought I came here to do work, but then spent a lot of time just building really good relationships and having a good time. |
B | What did you come to Zuzalu to do? |
C | To meet folks who are interested in the african continent. I came here for Edcon as well, so I give a talk there, share my thesis on the continent, and also to be part of some of the network state discussions and really understand where people are thinking about. |
B | You said the word thesis, which means I'm interested. You have a thesis on a continent? Yes. What does it mean to have a thesis on a continent? |
C | Just a framework and a way for the rest of the world to connect with the african continent. I feel like there's a lot of crypto activities happening in the african ecosystems, but most of the Ethereum community, as well as just the broader crypto communities, just don't understand what's happening there. Many people ha... |
B | Yeah. There's, I'm assuming, just a very large divide between Africa, crypto, and the rest of the crypto industry. I think there's also a very large divide between east and west in crypto. Yes. But even that divide commingles a lot. Like the Chinese, which is part of crypto, which is very large, does mingle. There's be... |
D | Between east and west? |
C | Way more cut off. |
B | Way more cut off. |
C | Way more cut off. Because the biggest barrier for a lot of african builders is that it's hard for them to travel to where global crypto communities are and where main events are. So the number one issue is just visas. The west and many eastern countries just don't give Africans visas. I was organizing a whole site even... |
B | Yeah. So the cross pollination of just the. It just doesn't happen. |
C | Exactly. |
B | So I think there's going to be two parts of this conversation. It's what can crypto do for Africa? And then maybe we'll talk about what Africa can do for crypto. Yes, I will talk about the cross pollination here. |
C | Awesome. |
B | But let's start with that. Let's start with why does Africa need crypto so much? Like, why is Africa primed to be a crypto continent? |
C | Because centralized entities have failed us. That's the main point. Centralized government, centralized banks, institutions are either not effective or non existent. So that's where I think decentralization makes the most sense, is it acts as the layer of trust on which so many economic, social, political and financial... |
B | Would you say that another way of saying that is institutions have not just provided structure in Africa, and that's what you mean by centralization, is there's not trusted, centralized places of organization that has provided social scaffolding for the african continent. |
C | Let me give you just a few examples. So there are 14 african countries that were colonized by France. When the French were kind of leaving in the 1960s, they instituted this currency called the CFA. It stands for colonies of Africa, french colonies of Africa. And that spec to you was pegged to the franc and now spec to... |
B | Is it fair to say that that was a tool of colon, of, like, maintaining colonialization? |
C | Exactly. |
B | Even though, like, France, like, wanted to get out of the continent physically. But they were like, we'll leave our currency and maintain value attraction that way. |
C | Correct. And also, they don't, like the french government created some boundaries of your interest rates and how much money you can print and all of that. So those governments, you can say that they don't control their own currency, their own monetary policy. So here in the western world, we talk about sovereignty from... |
B | So the idea is like, okay, if we're going to use somebody else's money, perhaps we should use one that is based on the Internet and not benefiting some particular power elsewhere. And let's just use the, the one that's found on the Internet. Well, you will, you will use bitcoin because its monetary policy is going to b... |
C | Exactly. |
B | And so, like, it's, it's a. Maybe they still don't, the african countries don't have control over the monetary policy, but at least it's not the French, it's bitcoin. And bitcoin has all the properties of bitcoin that we enjoy. |
C | Now, that's not to say that that's the ultimate goal and answer. I think some level of sovereignty is amazing. Right. But it's kind of an example of where some of those countries, it's just 14 countries out of 54, are basically struggling to get sovereignty over themselves. Another sort of macro example is that there a... |
B | They charge a service for access to the printing press, of course. So they get inflation and they get to charge fees. Yes, I can see why there's demand for something else. |
C | Yeah. And even at a very practical, very. Those are like examples at a macro level, just at a human level, like the Internet has been a big game changer for many people. When I was growing up in Ethiopia. The Internet opened the world to me. I learned most of my English online. It opened up a lot of access to informati... |
B | So what you're saying is that the Internet is a massively democratizing force that has benefited the world as a whole, including Africa. But then there's this more that as the Internet matured, it evolved and adapted, became what you're calling permissioned, as in like, parts of the Internet are paywalled by whatever y... |
C | Yes. |
B | You're saying that that was not available to most of Africa, because most of Africans can't. They're not connected on the payment rails. |
C | And today is still the case. So you might even have the level of connectivity. But for example, in Nigeria, banks have a limit of $20 a month that you can spend internationally with your bank card. So even though you have the connectivity, the lack of foreign currency creates these really low ceilings for people to act... |
B | So as much as great as the Internet is, it simply just means less for Africa. |
C | And that's because, again, it goes back to centralized institutions. Even in tech, centralized technology institutions are still gated. And some of it is just structural, right? So how those countries economies are structured, or the relationship between that economy and global economies, we pay five to $10 billion a y... |
B | Interesting. So a bank transfer in Africa that goes to a different african country route through, like, Europe banking rails. |
C | Yes. |
B | And a bunch of middlemen up there charge a bunch of fees and then down to a different african country that's very, very proximate to the originator, but it just goes through Europe first. |
C | And most transactions are low in numbers. So the percentage. |
B | Low and low in numbers. |
C | High in volumes. High, low numbers. So the percentage that you pay for the transaction cost. |
B | Flat fee. |
C | Yeah, it's so high as a result of it. |
B | Okay, so these are all money and fee and banking system use cases, which makes total sense to me. Does it end there or where does this go next? |
C | So Africa has 1.4 billion people. 500 million don't even have any form of id. Okay, so that's. That's a big friction point to participate in anything in the world. So that trust, identity, reputation, those are really critical areas where I believe blockchain technologies can have a real impact. And that's actually whe... |
B | I would imagine some of these problems are symbiotic with each other. It's weird to call problems symbiotic, but in the negative direction, as in perhaps it's harder to produce a financial system in banking rails in Africa because there's no identity. And then also it's harder to produce identity when such a core part ... |
C | Well, I wouldn't say nothing exists. |
B | Right? There's less. |
C | It's just there's a lot less of it. It's not sophisticated. It's not fully developed. Right. So, for example, when you look at payments, some african countries have way more advanced payment systems than the US. You go to Kenya, for example. We have M pesa there, which is a mobile money company. It works so well everyw... |
B | Right. Okay, so I have so many more questions, but I first want to make sure that does it end there or. So we have banking and money, we have identity. Are there other use cases that we need to talk about? About what's. Okay. Oh, boy. It keeps on going. |
C | Yeah. No, I mean. So the other area is actually the art creative spaces. So there's like, african art. And african culture is all over the world. You see it in music, you see it in art, you see it in food. The world is consuming african creatives, but very little value is captured by the people who are creating that. R... |
B | Okay, so I think the picture that you're painting is that there are no good monies. There are a few good monies in Africa. And the crypto monies that we've invented, as troublesome and chaotic as they are still present very valid options for Africans. Yes. Not only that, but stablecoins, I'm sure, are very, very releva... |
C | They're massive. It's easier to access stable coins in so many countries than accessing fiat dollars, especially us dollar. Stable coins. To give you an example, where I come from, Ethiopia, there's the bank rate, and then there's unofficial rate, of course. |
B | Yeah. |
C | There's 100% premium. 100% premium on bank rate twice. Call it the corruption rate or the free market rate. That's what I call it. So there's the controlled bank rate, and that's because. And there's a lot more money being transacted outside the bank rate than, you know, outside of it, than within the system. Right, ri... |
B | Right. Okay, so the money conversation is a double whammy because it's not just a better money or stronger money alternatives, it's also the lower fees. |
C | Yes. |
B | Right. And so, like, that makes it a very competitive banking system. |
C | And access. |
B | And access. Yes. |
C | Global access. |
B | Yeah, global interactive. Permissionless access. |
C | Permissionless access, yes. |
B | And then there's, I'm sure as soon as you have like established bank account on Ethereum with your wallet and your money, then, like, you can start engaging in more sophisticated financial tools that we call defi. Yes, I'm sure that is a much more powerful set of financial tools than what Africans can discover locally.... |
C | The broad area of trust. |
B | Trust. |
C | So basically, wherever you need trust here, there's so many things that we take for granted. You get into a hotel room or you buy a piece of land or you order something online, you know something is going to be delivered. You kind of like assume that's already going to happen, right. In a place where there's not a lot ... |
B | Yeah. If any bankless listeners just had the term settlement assurances come into their head points for you. Settlement insurance is core part of what we believe makes crypto so powerful. Is the thing that you think is yours actually yours? That's like, the beautiful thing about crypto is extremely high settlement assu... |
E | Crypto. |
B | Is like a casino for us, sadly. I mean, it is one of these things that makes these things powerful and proves all the use case. But we have the luxury of using this as a casino. And I'm wondering what is the culture or the disposition of african users who use crypto not as a casino, but because they actually really nee... |
C | So reality is the casino still exists. It's everywhere. You see a lot of that in Africa as well. Now we're in a bear market, which is actually good because there's not a ton of blind speculation that's happening. But the other side, the real use cases, one is us dollar stable coins. So that's something that a lot of pe... |
B | Inflation across Africa is terrible. |
C | It's very high. Yeah. And the other side is also I'm hearing of fintechs, traditional fintech startups, who are actually becoming the key banking infrastructures on the continent. You're fighting startups, providing better financial services than banks do. But that's a separate conversation. They're using crypto at the... |
B | Why won't they admit it? |
C | Because it creates a lot of crypto issues. Crypto, yeah, exactly. You don't want a lot of attention. But when I talk to a number of exchanges, they're telling me that the biggest clients are fintechs, not retail users, which is fascinating. So they're using it for the treasury management. Again, if you cannot access us... |
B | Yeah. The one thing that makes me just so happy and optimistic about this story is that individual Africans are choosing to use crypto tools by their own merits and adapting them and becoming bankless, getting all their bank accounts. I actually think that that part of the story is also very cool and optimistic, too. F... |
C | Exactly, exactly. And I expect to see a lot more of that. Another area that I'm seeing some action in, and I'm super excited about is the credit space. Now, for you and I and many people here, you know, if you've got salary or whatever, it's easy for you to access some level of credit. Even if you have crypto, you can ... |
B | Yeah, higher than 20%. |
C | Keep going. |
B | 40%. |
C | Okay, so in Kenya and Nigeria, for example, a bunch of fintechs, they are charging ten to 30% a month. |
B | A month? |
C | A month. |
B | Oh, my numbers were in a year? No, ten to 30%. A month. |
C | A month. |
B | Because the risk is so high. |
C | Well, yes. |
B | Or perceived risk. |
C | Perceived risk as well. Some actual risk. Some perceived risk. So some fintechs that I've talked to where the default rate is less than 10%, they're still charging super high because that's the current going market rate. |
B | Is it just, why is that the going market rate? Is it just a very inefficient market with no liquidity? |
C | Liquidity is a big part of it, but the main issue is also just how to price risk. How to price risk. And also as a borrower, I can borrow x amount of money from you and then if I cannot pay it, then I go to someone else, borrow that money and then pay you back. You get into these cycles. |
B | So one person can cause 100 people's worth of destruction. |
C | Exactly. So one interesting area of application that I'm seeing is there's some fintechs that are getting access of user data from mobile money, for example, which huge mass adoption there, and putting that on chain and helping you build on chain credit reporting, which helps you access on chain liquidity. So it's actu... |
End of preview. Expand in Data Studio
README.md exists but content is empty.
- Downloads last month
- 5