Bitcoin’s potential to succeed in Africa is widely recognized within the industry.
It’s capable of transforming the way we send remittances to the continent and giving the unbanked easy access to money quickly and freely. It’s an alternative currency for anyone, but especially useful in countries with unstable national currencies, and can reduce the cost of cross-border trade.
In Freetown, Sierra Leone, an ethical fashion accessories company called Bureh is taking the first step in creating a digital currency economy for sub-Saharan Africa by accepting bitcoin via payments processor BitPay. That its total bitcoin transactions have been few since it began offering them in December doesn’t faze co-founder Daniel Heyman. Money movement, he told CoinDesk, is the main opportunity in bitcoin – not consumption.
Evidence of bitcoin’s transformative possibilities may be traceable across the continent. South Africa and Kenya certainly have well-established bitcoin economies that continue to progress. But so far, nothing on their level exists in West Africa.
Heyman said that stability and peace across the western region is at an all time high, and that makes prospects rosier for Bureh’s business and its possible role in the bitcoin ecosystem. He said:
Bureh launched in 2011. Its accessories are hand-produced in Sierra Leone by well-paid local artisans, said Heyman, and made from traditional fabrics sourced by local businessmen and entrepreneurs. The collection is distributed in Sierra Leone, the US, Europe and China, where it showed this April at Shanghai Fashion Week exhibition. The company, Heyman said, reinvests half of its profits into start-up companies in West Africa to promote entrepreneurship.
Heyman, who oversees his company from New York, said that the business is less susceptible to foreign exchange risk than most. “But our people, our employees, and our contractors are not,” he continued.
When the Sierra Leonean Leone (SLL) weakens against the dollar, Bureh as a business isn’t at risk, as its revenue is mostly in foreign currency, he explained, but that means everyone supplying services to the company suffers.
Bureh pays fixed fees when it wires money from the US, said Heyman, but Sierra Leone banks automatically convert US$ into SLL. No specific figures were provided in this interview.
“This is where the majority of the fees are hidden,” he said, “and it's hard to say exactly how much. Unlicensed exchangers offer rates that are regularly five to 8% better.”
Looking to Kenya
, the bitcoin remittance service, and mobile money transfer service M-Pesa, are valuable because they eliminate the risk and uncertainty of fees, conversion rates, speed and fraud.
Heyman said that West Africa has a long way to go if it's going to catch up to Kenya in mobile banking, but that progress is rising throughout the region.
Image via Bureh
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