📌 Emerging Onchain This Week #20
This week of EOTW for brings us news from Egypt, Nigeria, Ethiopia and Spain!
Happy Lunar New Year crypto friend, may the newness bring bountiful progress!
Know others who are looking to know more about the African crypto space? Well…
- Egypt Reportedly Working towards ePound
According to Egyptian Press, Egypt’s Central Bank is said to be progressing with its Central Bank Digital Currency (CBDC) project, aiming to launch the e-pound by 2030. The initiative is part of Egypt's digitalisation program for financial services to boost national currency competitiveness and thus enhance monetary policy efficiency. The 2024 economic strategy includes increasing e-wallets to ±80 million by 2030.
The digital pound will serve as the electronic counterpart of the traditional currency, and will be transacted through electronic payment systems. While Nigeria has pioneered CBDC adoption in Africa with the eNaira, its broader adoption has been slow due to various issues. Egypt's move towards CBDCs reflects a growing interest in digital currencies across the continent.
- Ethiopia’s Mega Dam has attracted ~21 Bitcoin Miners
Ethiopia's Grand Ethiopian Renaissance Dam (GERD) is seeing multiple Bitcoin mining companies capitalising on the dam’s increased electricity capacity. A total of 21 firms, 19 of which are Chinese, have secured power supply agreements in the country. Ethiopia's government permits bitcoin mining operations due to the foreign currency payments made by miners for electricity consumption.
While regulatory frameworks are still in nascent stages, Marketing and Business Development Director Hiwot Eshetu shared with Bloomberg that the Ethiopian Electric Power charges miners a fixed rate of 3.14 US cents per kilowatt-hour. Ethiopia, facing a pressing need for foreign currency inflows, is also currently in negotiations with the IMF for a bailout after defaulting on payments.
- Nigerian Banks and Payment Providers Partner for Naira Stablecoin Solution
An unconfirmed group of Nigerian banks and payment providers have formed the Africa Stablecoin Consortium (ASC) to launch a Naira stablecoin, cNGN. The partnership is alleged to include major players like Access Bank, Sterling Bank, Providus, First Bank, Korapay, Interswitch, Budpay, Interstellar, and Convexity. On January 4, the ASC confirmed that cNGN would be part of the CBN’s sandbox.
With the definition of virtual currency in Nigeria still unclear, stablecoins may classify as e-money. The cNGN is expected to facilitate cross-border transactions & boast interoperability with other public blockchains, including Bantu, Polygon, Ethereum, Binance Smart Chain, and Tron. Meanwhile, Nigeria's CBDC, the eNaira, which was developed solely by the CBN, has thus far faced slow progress.
- Bank of Spain announces CBDC Testing
The Banco de España in January announced its partners for testing the central bank digital currency (CBDC) initiative, naming Cecabank, Abanca, and Adhara Blockchain as the partners. The pilot, set to run for six months, will focus on simulating interbank payment processing and settlement using a tokenized wholesale CBDC.
The Spanish Ministry of Economic Affairs and Digital Transformation said it intended to implement the EU’s Markets in Crypto-Assets Regulation. However, in a survey conducted by the Bank after publising an article on the nature and uses of the digital euro, 65% of Spaniards expressed their lack of interest in using a pan-European CBDC alongside traditional payment methods.
According to Circle’s “State of the USDC Economy” 2024 report, Ethereum continues to be the chain with the longest settlement time for USDC with roughly 3 minutes per settlement transaction. Arbitrum One, which is also known for its low fees, comes in first in terms of settlement speed, with 280 milliseconds per settlement transaction, followed not far behind by Solana at 400 milliseconds per settlement transaction.
A non-exhaustive list of some of the useful and/or informative resources we are reading to catch up on the emerging trends affecting crypto globally and in Africa:
A TechLabari article by Joseph-Albert Kuuire titled “Tracing Cryptocurrency Adoption, Regulation, and Innovation in Africa”
Caleb Nnamani’s NODO article on why although crypto will no longer land Nigerians in jail, it “could bring crypto operators to their knees”
Mumo’s episode “Kenya's Crypto Innovation Under Threat: Government's Deadly Laws”
Web3 Marketing Podcast’s Dasha speaking to Yvonne Kagondu on “Building blockchain communities in East Africa”
EMURGO Africa’s “Inside Nigeria’s Web3 Market: Crypto Outlook and Regulations”
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