Despite the global tides in crypto demands, demand for crypto in the tiny East African country of Uganda continues to rise steadily. This is surprising considering that three out of four people in that country are unbanked. According to an exclusive given to crypto publication, Coindesk, Binance Uganda reportedly signed up 40,000 users in only its first week since setting up shop in the country last month. Binance is clearly rivaling most banks in the country when it comes to signing up accounts. These impressive signup numbers in just its first week suggest that there is a strong demand for Bitcoin and Ether among even unbanked Ugandans.
Stanford University researchers recently revealed that 74 percent of Ugandan households were unbanked; this report was published in the American Economic Journal. As such, Wei Zhou, the chief financial officer at Binance told Coindesk; “They [users] just have to have money within the mobile payment system. They don’t have to have bank accounts.” The Binance project in Uganda will differ from its Global flagship project in at least two other notable ways. While Binance is known to only offer cryptos for other cryptos, its subsidiary in the East African country will partner with a local mobile payments provider to convert Fiat currency to crypto and vice versa.
The local mobile payments platform wished to remain anonymous due to fears of being targeted by thieves for holding large cash amounts. Nairobi based Businessman Marvin Coleby endorsed Binance’s foray into East Africa stating that the platform would solve the region’s problems of liquidity. Before Binance entered the Ugandan market, crypto hungry Ugandan’s had to rely on peer to peer platforms such as LocalBitcoins or services such as Zimbabwe’s Golix exchange. Kwame Rugunda, chairman of the Uganda Blockchain association and co-founder of the Ugandan startup CryptoSavannah told Coindesk that peer to peer platforms such as LocalBitcoins were useless to many unbanked citizens that were hungry for crypto access in the country.
Already smelling success, Binance’s Zhou told Coindesk that Uganda would be the company’s pivot on the continent, as it seeks to venture into either, Kenya, South Africa or Nigeria in 2019. The demand for Bitcoin in Uganda is largely being driven by remittance needs. The 2014 national census in the country revealed that most of the citizen’s remittance was from neighboring Kenya, with a minute percentage receiving remittance from European sources such as Germany and Sweden. Unemployment is another driving force for the crypto demand which is similar to places like Palestine where youth are looking for online opportunities to earn, due to a scarcity of white-collar jobs.
Despite the budding potential of the Ugandan crypto market, there is still a long way to go before Ugandans can begin to rely on Bitcoin for daily remittances. Bitpesa CEO Elizabeth Rossiello, while speaking to Coindesk revealed that most Ugandan’s became crypto skeptical a while back due to a crypto scam ring that had defrauded people in the country. Mr. Rugunda, the chairman of the Uganda blockchain association envisions a positive future for crypto in the country with the establishment of a National Taskforce for Blockchain in the country. He also delightfully pointed out that Ugandan Royal, Prince Kudra Kalema, was currently spearheading an energy project in the country in conjunction with crypto startup Wala, which already has thousands of Ugandan Mobile app users.