Crypto enthusiasts react to Binance expansion in West Africa

Cryptocurrency exchange Binance's peer-to-peer (P2P) platform has recently spread its wings in West Africa by supporting five local currencies in the sub-region including the Gambian Dalasi, Sierra Leonean Leone, Mauritanian Ouguiya, Cape Verdean Escudo and Liberian Dollar.

Binance is an exchange platform that allows users to buy, sell and trade various cryptocurrencies. Users can create an account, deposit cryptocurrency or fiat currency and then use the platform's trading tools to trade. It also offers a wide variety of cryptocurrency pairs to trade, including Bitcoin, Ethereum and other altcoins.

Users in West Africa can now become merchants on Binance's P2P platform if they have a reliable supply of cryptocurrencies. The platform offers verified badges, exclusive client assistance and access to cutting-edge trading tools.

Binance is diversifying its product line and strengthening its presence in Africa. This enables users in this region to conduct direct cryptocurrency transactions with other users in their preferred payment method, local currency and price without the need for a third-party or intermediary.

Nadeem Anjarwalla, the director of Binance West and East Africa, said the company is committed to increasing the adoption and mainstreaming of accessibility of crypto and it is excited to be taking this step in making access to digital assets effortless for more Africans.

Mixed feelings from cryptocurrency enthusiasts

When this significant crypto expansion happened, initial reactions of crypto enthusiasts and specialists were mixed as some say it might force West Africans to turn to digital assets due to lack of investment options in the region. Meanwhile, others believe that this may lead to increase adoption rates of crypto.

Experts like Pa Malick Bah and David Akwara fervently believe that the African Continental Free Trade Agreement (AfCFTA) can play a significant role and would equally benefit from this expansion in the sub-region.

"With the AfCFTA in place, there are opportunities for Binance to expand in the region by offering its services to more African countries. This could increase access to cryptocurrency trading and potentially lead to increased adoption of cryptocurrency in the region. It can also enhance regional trade as cryptocurrencies can be an alternative for settlements," said Bah, market product specialist for fixed income and treasury product at Standard Chartered Bank Nigeria.

He noted that cryptocurrency and blockchain technology offer many exciting opportunities, but argued they also come with risks.

"It is important for individuals to educate themselves, use reputable and trusted exchanges and wallets, and take appropriate security measures to protect their assets," he cautioned.

Pa Malick Bah, market product specialist, fixed income and treasury product at Standard Chartered Bank Nigeria. (Source: Supplied)

Bah said the Binance expansion presents Gambians and other West Africans with opportunities including expanding their products beyond local borders, creating new jobs for the youth who develop apps using blockchain technology and wealth creation for those looking for interest in crypto assets due to the absence of stock exchange markets in most of these countries.

He believes that the expansion of Binance and cryptocurrency trading in West Africa could potentially bring new opportunities for economic growth and financial inclusion.

However, there is a daunting challenge for the financial sector – especially fintech and crypto &ndash to penetrate highly skeptical and conservative societies. According to the UNDP, the formal banking penetration rate in urban Gambia is 25%, whilst in rural areas figures stands at just 5%.

Challenges for payment systems moving from physical to virtual

For David Akwara, a multi-award-winning filmmaker on the AfCFTA and strong Nigerian advocate of the continental trade policy in West Africa, the expansion of Binance in the sub-region will easily facilitate financial transactions as most payment systems are now moving from physical to virtual.

However, there are challenges like the low levels of crypto-literacy and the frequent reporting of fraud cases on such platforms, which Akwara is aware could be stumbling blocks for adoption of the virtual currency in the region.

"It is still at a trust building process. New users are still testing the waters, but it is growing gradually," he said.

Akwara believes the direction of central banks in West Africa should be to encourage people to do more online business transactions, citing recent developments in the fintech industry where more women are now using mobile phones for their daily market shopping.

A law firm, Freeman Law, said The Gambia has not enacted any law regulating cryptocurrency but also ranked the small West African country 178 out of 249 countries on crypto safety, while two initial coin offerings (ICOs) have forbidden Gambian dwellers to take part in their crowdfunding gesture.

A source at the Central Bank of The Gambia (CBG) declined to comment on the expansion of Binance in West Africa, including The Gambia.

However, recently the Nigerian government has teamed with Talent City and Binance to create the first virtual free trade zones for service exports in West Africa.

Related posts:

*Top image source: Image by Freepik.

— Yero S. Bah, correspondent, special to Connecting Africa