We’ll be clear. Crypto is just a form of advanced financial technology. From that perspective, it’s pretty clear to us that the future of finance for Africans will be built using cryptocurrencies and blockchain technologies. For that reason, we all need to rally behind creating positive regulations to enable it to grow. The good news: it’s happening. The bad news: it’s not happening fast enough.
Now over twelve years since the pseudonymous Satoshi Nakamoto released version 0.1 of bitcoin on 9 January 2019, the cryptocurrency and blockchain space has evolved tremendously. It has progressed from a niche area of technology to a globally recognized touchpoint for the future of finance. However, as tends to be the case with new technologies at the frontier of contemporary practice, regulatory frameworks have lagged behind.
We’ll be clear. Crypto is just a form of advanced financial technology. From that perspective, it’s pretty clear to us that the future of finance for Africans will be built using cryptocurrencies and blockchain technologies. For that reason, we all need to rally behind creating positive regulation to enable it to grow. The good news: it’s happening. The bad news: it’s not happening fast enough.
Across Africa, this regulatory ‘drag’ is very real. In a report authored in 2019, Baker McKenzie observed that of the 54 African nations only Senegal, Tunisia, Sierra Leone and South Africa took a “friendly and progressive” stance towards blockchain and cryptocurrencies. Off the back of the 2020 cryptocurrency rally, other states have taken definitive positions towards this burgeoning area of finance; for better or worse.
In Nigeria for example, the Central Bank ordered local banking institutions to identify and shut down any accounts tied to crypto platforms in February 2021. Met with swift and vociferous backlash, the Deputy Governor Adamu Lamtek backtracked on this position, clarifying that they had never banned cryptocurrency activity in the country. This example is poignant for a number of reasons. For starters, it indicates the growing appetite of Nigerian retail investors to participate in this financial revolution; a trend which has parallels in South Africa, Zimbabwe, Kenya and Botswana. Additionally, due to persistently high inflation rates and currency devaluations in several African countries, increasing adoption is yet another example of the potential for African nations to leap-frog development issues with new technologies. Regulatory ‘drag’ notwithstanding, the market opportunities in this space for companies across Africa are clear.
Here at Raise, our vision is simple: to build liquidity into Africa’s capital markets. Liquidity means that teams, employees and investors can turn stock to cash when they exit their investments. To do that, we’ll rely heavily on smart contracts, cryptocurrencies and other advanced financial technologies to make this a reality. We recognize the difficulties associated with raising finance in traditional equity markets and how these issues disenfranchise many Africans from investing in companies. By building a Pan-African stock exchange, we will give Africans across the continent the opportunity to invest in companies listed on the Raise platform, irrespective of where they are.
We didn’t stop there though. In addition to transforming Africa’s capital markets, we’ve been active in the blockchain and crypto community since 2017. We’re one of the founders of one of Africa’s fastest growing decentralized autonomous organizations, the African Digital Asset Foundation - where we drafted open source regulations that were adopted by Kenya, the Inter-American Development Bank and the African Union. We’ve also formed an alliance with Africa’s largest law firms to create a framework for tokenized assets.
Simply put, not only do we want to bring a bankable and innovative product to market - we are also playing a key role in modernizing African economies and driving the future of finance.