Emerging Onchain This Week #3

May 14, 2023

Hello crypto friend 👋

Welcome to the third edition of the Emerging Onchain This Week. Feast on crypto developments from across Africa over the last 2 weeks. 🍽️

Ecosystem

-Nigeria Approves Blockchain Policy to Create a “Blockchain-Powered Economy”

The policy, approved by the Nigerian government, aims to transition the economy into one that supports blockchain-powered transactions, data sharing and value exchange. Initiatives include a blockchain sandbox, consortium, regulatory and legal framework, plus the potential for blockchain technology to support current efforts to harmonise national biometrics and IDs.

This marks a step away from the 2021 directive which decoupled trad-fi and crypto. In recent years we have also seen Nigeria launch its CBDC (eNaira). The Central Bank of Nigeria on May 11 disclosed that over 4 million eNaira wallets were created in the first quarter of 2023 in view of the government’s social intervention program.

-Animoca Brands' Partnership with STC Play Could Boost Crypto Adoption in Africa

Leading blockchain gaming firm Animoca Brands has partnered with STC Play to collaborate on publishing video games in Middle East and North Africa (MENA).

The partnership will allow Animoca Brands to distribute its games (which are built using NFTs) to a wider audience in the MENA region. As of 2021, over 186 million people in Africa played video games with a market share of $1.3 billion.

-Venom Foundation partners with government of Kenya

Venom Foundation, a UAE-based blockchain company, has partnered with the government of Kenya to build a blockchain hub in Nairobi. The hub will support blockchain projects and talent building in the African crypto ecosystem.

Venom Foundation had earlier allocated about $1 billion to invest in innovative protocols and African Web3 solutions with the company expressing a strong focus on Africa. They join the likes of Gluwa who recently announced further investment into Africa and is in talks with the Nigerian government of creating a virtual zone in Lekki, Lagos.

-Kenya moves to tax Bitcoin and NFT transactions

In the past, the Kenyan government banned the use of cryptocurrencies, but it has gradually softened its stance and is now looking to regulate the industry.

Kenya’s Ministry of Finance has proposed a 3% tax on income generated from digital assets, such as Bitcoin and NFTs, through the 2023 Finance Bill. This follows the Kenya Treasury Department’s earlier disclosure of plans to impose a 1.5% tax on cryptocurrency exchanges operating in the region.

The crypto community has expressed mixed reactions to the proposed tax. Some have argued that the government’s aggressive tax regime may stifle innovation whilst others have welcomed the move, saying it will help to legitimize the crypto industry in Kenya.

-Four African projects win the Human Rights awards

The Human Rights Foundation (HRF) announced today that it has granted $455,000 to 12 Bitcoin projects through its Bitcoin Development Fund. Four of the projects are based in Africa.

The Bitcoin in Africa Show, Bitcoin Senegal, and Bitcoin Dada Kenya each received a grant of $10,000. The Bitcoin Innovation Hub Uganda was granted $50,000 to build a local hub in Uganda.

The grants awarded to the African-based projects will help to strengthen their efforts in providing crypto education and raising awareness of the potential impact of Bitcoin in Africa.

Zone named “Africa’s fastest-growing blockchain company”

Nigeria-based blockchain company Zone (previously AppZone) has been named as the only blockchain entity and 74th on Financial Times and Statista's 2023 list of Africa's fastest-growing companies.

Zone's inclusion on the list is a significant milestone for the blockchain industry in Africa, as it demonstrates the growing potential of blockchain technology to transform businesses and economies across the continent.

Product Launch

-MVM exits NestCoin to launch Hyper Games

NestCoin-incubated gaming guild Metaverse Magna (MVM) has evolved into a standalone business, according to NestCoin CEO Yele Bademosi.

Following its exit from the Nest, MVM launched a new social gaming platform, Hyper. The affairs of the gaming guild will now be directed by Yemi Johnson, named its CEO.

-The Africa Digital Asset Foundation relaunches

With the aim to create open, accessible legal and tech standards to support digital trade and assets, the foundation’s research team will work under the African Union to ensure the presentation, discussion and implementation of standards.

-Paxful resumes operations, a month after sunset

Bitcoin peer-to-peer (P2P) marketplace Paxful said it will resume operations barely a month after shutting down over staff concerns and increased regulatory pressure.

As highlighted by Emerging Onchain, Paxful is a popular platform in Africa, with a customer base of over 20% in Nigeria. The company's comeback could further strengthen the adoption of cryptocurrency in the region.

-Coinbase sets up advisory council to engage US regulators

Leading crypto exchange Coinbase has set up a Global Advisory council to help it navigate the regulatory landscape. The council is made up of former regulators, lawmakers, and industry experts.

Coinbase's move is a sign the industry is maturing and taking regulation seriously. The council’s success could lead to increased adoption and a boost for the entire industry.

-East Asia dominates Africa’s cryptocurrency flows

Between July 2019 and June 2020, approximately $6.7 billion in cryptocurrency was sent from Africa to the rest of the world.

Significantly, about a third of the transfers went to East Asia, an indication that cryptocurrency is being used to facilitate trade and investment between Africans and Chinese suppliers.

Here are a few resources we are reading, watching, and listening to catch up with emerging trends affecting the crypto space.

Talks from a16z’s Crypto Startup School 2023 (Recommended for all Crypto builders.)
Africa’s Peer-to-Peer Story- podcast episode from Crypto@Scale

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