Ian Putter(Head of Blockchain Center of Excellence at Standard Bank)
Africa’s interest in blockchain technology and cryptocurrencies has been steadily growing, with significant investments pouring into the sector in recent years. According to a report by Crypto Valley Venture Capital in collaboration with Standard Bank, the continent saw a remarkable increase in funding for blockchain projects in 2021, reaching almost $100 million. Ian Putter, the Head of the Blockchain Center of Excellence at Standard Bank, shed light on the key findings of the report in a recent interview with CNBC Africa.
One of the standout points highlighted in the report was the exponential increase in funding for blockchain projects in Africa, with a staggering 1,668% growth from 2020 to 2021. This surge in investments underscores the growing interest and confidence in blockchain technology across the continent. Despite the regulatory challenges that exist in various African countries, the report emphasized the ample opportunities present in the blockchain space.
Putter pointed out that there are six countries in Africa where blockchain is legally recognized, while some countries remain uncertain about its regulatory status, and others have outright banned cryptocurrencies. However, the substantial increase in funding for blockchain projects signals a positive outlook for the technology’s future in Africa.
The bulk of the investments in blockchain projects were directed towards Fintech and cryptocurrency companies, which are perceived as relatively riskier assets within the blockchain ecosystem. While blockchain technology itself is deemed secure, it is the trading of decentralized digital assets that introduces risk into the ecosystem. The report indicated a growing interest in leveraging blockchain for various applications, such as remittances and community-driven initiatives that promote transparency and governance.
In the context of South Africa’s blockchain landscape, Putter noted that the country ranked among the top five fundraisers in Africa, following Nigeria. He attributed Nigeria’s higher ranking to its larger market size and the significant demand for blockchain solutions, particularly in the remittances sector. The need for lowering barriers to entry and fostering innovation at the grassroots level has driven the adoption of blockchain technology across various African countries.
When it comes to regulations, Putter emphasized the importance of regulatory certainty for companies and Fintechs to develop robust use cases that can harness blockchain technology effectively. While regulators in Africa have been proactive, there is still a need for clear guidelines on the classification of cryptocurrencies as assets to mitigate their inherent volatility. Enhancing regulatory engagement and promoting knowledge and education about blockchain technology are crucial steps to foster its growth in the region.
Looking ahead, the integration of cryptocurrencies in everyday transactions, such as retail payments, hinges on regulatory approval. Putter acknowledged the growing acceptance of cryptocurrencies globally and anticipated a gradual shift towards their mainstream usage in the next year or two, depending on regulatory dynamics. Partnerships between established institutions like Standard Bank and emerging Fintech companies are expected to play a vital role in accelerating the adoption of blockchain solutions and driving innovation in the sector.
Standard Bank’s collaboration with CVVC and the launch of BRI Africa, a think tank focused on research and education in blockchain, exemplify the commitment to fostering blockchain ecosystems in Africa. The bank’s support for initiatives like blockchain-based food provision and housing projects underscores the transformative potential of blockchain technology in addressing societal challenges.
As Africa continues to embrace blockchain technology and cryptocurrencies, establishing a conducive regulatory environment, fostering partnerships between industry players, and promoting education will be essential for driving sustainable growth and innovation in the blockchain space.
