The ongoing crypto winter is not stopping the industry from pushing for global adoption and accessibility. A new partnership between CoinCorner and Bitnob opens a way for users across continents to perform cross-border transactions involving multiple fiat currencies.
Typically transfer of funds between Europe and Africa requires a third-party facilitator like Western Union, which rely on centralized entities. These transactions often have processing times of multiple parties prior to approval and are known for their expensive cuts. World Bank estimates that remittances to Sub-Saharan Africa went upwards of $40 billion yearly as of 2020 —with Nigeria receiving almost half of the sum alone.
Now, users can transfer funds via the Bitcoin (BTC) Lightning Network from the United Kingdom and Europe to select countries in Africa. The application, Send Globally, allows British pounds (GBP) or Euros (EUR) to be transferred to the local currencies of Nigeria (NGN), Kenya (KES) and Ghana (GHS).
Through the Lightning Network, the funds are automatically converted into BTC, then instantly converted to the local currency and deposited straight into the bank account or mobile money wallet of the receiver.
Sending remittances to Africa, especially from the U.K. and Europe, is known for its high cost. Source: IFAD
Danny Scott, the CEO of CoinCorner, said the remittance market is a big opportunity to highlight the utility of BTC.
“The borderless nature of Bitcoin has always made it a great tool for sending money around the world, but now with the Lightning Network, sending Bitcoin is instant and very low cost.”
In 2021, data from Statista placed Nigeria in the top 10 countries for remittance payments. Additionally, the World Bank reported tha in the last year Sub-Saharan Africa made up 14.1% of global remittances.
However, nearly 80% of African countries restrict the type of institutions that are able to offer local banks remittance-related services. Such exclusivity creates barriers to entry, therefore, access to finance for the people who need it most.
Related: Remittances drive ‘uneven, but swift’ crypto adoption in Latin America
The prevalence of cryptocurrencies in Africa has been a hot topic in the space, as the continent is rife with emerging economies and practical use cases.
Particularly in North Africa, growth in the crypto industry continues to grow. A report from Chainalysis revealed the Middle East and North Africa (MENA) region to be the fastest growing in the world.
In September, the Nigerian government held meetings with Binance to potentially negotiate a special economic zone posed to support crypto and blockchain-related businesses in the region.
A later report from Chainalysis also highlighted Ghana’s rise to prominence in the crypto space. It said the country could potentially catch up to Nigeria and Kenya in terms of crypto adoption.