BlinkTrade Opens New Bitcoin Markets in Venezuela, West Africa
This evening New York-based technology platform BlinkTrade is unveiling UbuntuBitX, its West African bitcoin exchange.
It is the second exchange the company has introduced in a week, having launched SurBitcoin in Venezuela last Thursday.
BlinkTrade provides clients with its technology, thereby offering them a cost-effective way to start their own bitcoin exchanges and removing the need to hire a developer. Other exchanges use their own proprietary software, centralizing bitcoin, fiat money and liquidity, team head Rodrigo Souza explained to CoinDesk.
But one thing BlinkTrade is especially proud of is its ability to give exchange users access to bitcoin liquidity in regions where bitcoin trading is not yet widespread.
“My mission statement is very simple: let's lower the costs for bitcoin exchanges, using an open-source, cloud-based platform for exchanges like BlinkTrade, and also allow bitcoin exchanges to share liquidity.”
BlinkTrade itself does not hold users’ bitcoin or fiat money; the brokers have custody and are required to publish all of their bitcoin addresses as a transparency measure.
Souza said that one day the company would be able to give users worldwide the option to select their region’s best brokers – but this is looking far into the future. For the time being, he continued, it is focused on empowering as many exchange operators as possible in the developing world.
Entering the Venezuelan market
SurBitcoin, the company’s Venezuelan client, launched in beta on Thursday. The exchange is giving Venezuelan users 200 Venezuelan bolivar fuertes (VEF), or about $32 at press time, in credit upon signup to buy bitcoins. Since the launch at least 160 users have signed up.
Although there is no official data on the number of unbanked citizens in the country, Souza estimates the figure is around 70%, and that as many people therefore struggle with inflation, which was up to a rate of 56.3% by the end of last year – the highest on the continent, according to World Bank data.
Souza added that it is difficult to remit money to Venezuela without going through the black market, where the fees can exceed 20%. Few people use money transfer services like MoneyGram or Western Union, deterred by the steep exchange rate.
“Venezeula imposes a set of challenges. If we can succeed in Venezuela, we can succeed in any country of the world.”
Whether the monetary policy and fiscal objectives driving up inflation will affect the region’s bitcoin economy remains to be seen. Regulators have not given an official ruling on how to control bitcoin or whether to classify it as a currency, a commodity or otherwise.
Souza sees bitcoin as a digital asset, and hopes for his business that the government will rule from a similar stance.
“Venezuelan law doesn't allow you to trade any currency outside of their central bank,” Souza explained. “So, it is very important for us that Venezuelan authority does not rule that bitcoin is a currency, because it is not.”
Presently, bitcoin’s prospects are in the hands of the local people, he added, saying:
“Local people might influence their government. We are not going to try to fight governments with bitcoin, we will follow their local laws and regulations so we don't get bitcoin banned in those countries.”
Targeting West Africa
This evening BlinkTrade will introduce UbuntuBitX, the Benin-based exchange that will operate for users in eight West African countries: Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Sénégal and Togo.
Centralized exchanges don't help the remittances market from any country, Souza explained, adding that high fees and a lack of liquidity restrict bitcoin from thriving as remittances.
Africa is important because of the need and potential of micro-remittances (those less than $100), he explained, saying:
“You send $100 to West Africa, and the other person there will get $90. If we establish a market there with low fees, bitcoin can thrive in the micro-remittances market. For larger remittances you need more liquidity.”
The platform is built on a WebSocket API, allowing any front-end developer to build applications with which users can convert bitcoin to fiat.
“Providing easy access to liquidity to developers will create an infrastructure that will probably change the way people use bitcoin today,” Souza said.
BlinkTrade is a product of a three-man team of developers: Souza, Clebson Derivan and Roberto Santacroce Martins.
The team use multi-signature technology to protect the customers and brokers. The platform is open source. The code, available on github, is still in beta, but has been public since its inception.
Image via Shutterstock
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