40,000 Traders Join Binance Uganda in the First Week

40,000 Traders Join Binance Uganda in the First Week

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Answer 40,000 Traders Join Binance Uganda in the First Week

Despite the stagnation of global markets, the demand for cryptocurrencies appears to be booming across Uganda, with nearly three-quarters of the population unbanked.

Binance Uganda revealed that 40,000 users joined in the first week since the launch of Binance Uganda last October.

Early results indicate a strong appetite among unbanked Ugandans to buy Bitcoin or Ethereum, the two cryptocurrencies now offered by Binance Uganda.

According to a paper by researchers at Stanford University recently published in the American Economic Journal, 74% of Ugandan households are not involved, and Binance’s CFO said:

“And we have provided a convenient option for transferring money via smartphones, so users must have [فقط] Money in the mobile payment system. They do not need to have bank accounts.”

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While Binance of the month only offers crypto-to-crypto trading, its new Uganda-based platform is partnering with a local mobile payment provider that will convert cash into cryptocurrency or vice versa. (The partner requested not to be named, due to safety concerns about managing large amounts of cash.) Like its Malta exchange, Binance Uganda does not have a bank account.

“One of the main issues in the region, on the continent, is liquidity now, and the Binance Uganda exchange will provide us with liquidity,” said Nairobi-based businessman Marvin Colby in neighboring Kenya, who is the co-curator of the African Digital Asset Framework. “These digital assets can move, without limits, across the continent.”

Furthermore, Ugandan users are still subject to the government-issued Know Your Customer (KYC) process. Binance has historically been known to only require an email address to trade “one cryptocurrency for another.”

Previously, Ugandans who wanted to trade “cryptocurrencies” mostly relied on OTC markets for peer-to-peer purchases such as “LocalBitcoins” or nearby services such as the Golix exchange in Zimbabwe. However, Kwame Rugunda, president of the Uganda Blockchain Association and co-founder of Ugandan crowd-starting startup CryptoSavannah, told CromptoSavannah that these platforms only represent “a large population in the country that is unbanked” and “thirsty.” To access digital currency.

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Since Binance opened in Uganda, Rugunda said many other global platforms have started contacting local regulators.”

“We’ve already heard of interest from other investors looking at the Ugandan market,” he said.

Meanwhile, the CEO of Binance said, “Uganda is looking to hire local employees to both support locally and expand similar affiliates in 2019 to either Kenya, Nigeria or South Africa.”

“Uganda is our hub for access to other African markets,” Chu said.

driving factors

Rugunda said remittances are a critical factor in driving demand for bitcoin in Uganda.

The 2014 national census revealed that about 10 percent of Ugandan households received remittances from neighboring Kenya, a few percentage points lower than the most popular sources of remittances in Europe, Sweden and Germany. But these transfers incur high transfer fees, which creates a huge demand for alternatives.

“There is a lot of cost in the financial system when you switch currencies back and forth, plus inflation,” Chu said, adding, “This tells us that the use case of cryptocurrencies in Africa is a hedge against inflation.”

Rugunda said other factors driving the adoption of a cryptocurrency in Uganda are widespread unemployment beyond the agricultural industry and demand for imported products.

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“There is a big consumer market for people who buy cars, for example because[bitcoin]is legal tender in Japan” where the cars are made.

Meanwhile, the International Labor Office estimated in 2017 that about 15% of Ugandans under the age of 30 of working age were unemployed, in addition to that 49% were only employed in irregular or temporary work. As such, many have become self-employed.

“Unemployment is another real factor,” Rugunda added. “It forces people to look outside formal business structures.”

These factors lead to similar factors cited by cryptocurrency theorists in the Palestinian Territories, where educated youth on the Internet look for opportunities to earn and trade cryptocurrency when white-collar employment opportunities are scarce.

  • White collar: is a term Those people who do “mental” desk work are called managers and specialists.

On the other hand, there is still a long way to go until the 40,000 users of the Binance platform in Uganda start relying on Bitcoin for their daily transfers.

Elizabeth Rossello, CEO of Kenya-based BitPesa, said that many Ugandans became skeptical of bitcoin after criminal operations promised and then defrauded Ugandans of bitcoin.

“Uganda is a largely offline market, where trust is built through face-to-face interactions,” Rossello said. “We are very optimistic in terms of regulation and government support, as they have been very qualified lately for new mass events and innovations.”

In his dealings with local authorities, Rugunda said he sees an increased opening up of the cryptocurrency industry, including the creation of a National Blockchain Task Force. In fact, Ugandan Prince Kudra Kalima is currently leading an energy project with Wala, which has thousands of Ugandan mobile app users.

Chu agreed that Uganda is a “next African country” with a relatively stable political system. Speaking about the high demand for cash and complex cross-border crypto transactions, he concluded:

“For Africa as a whole, this is just Binance’s first step in serving Africa.”

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