Africa’s payment revolution: Lessons learnt from the FTX collapse
The panel discussion at AIBC Africa was led by Lily Douse, who served as the moderator. The panellists included Payment Collection Specialist, Leonard Selassie Soku and Omar Iqbal, co-founder and CEO for FiveWest, contributing their insights and expertise to the conversation. Their collective knowledge and experience enriched the discussion, providing valuable perspectives on the topic at hand.
The collapse of FTX, once a thriving exchange for institutions and traders, has left the crypto world with valuable lessons about transparency, regulation, and the importance of good management. The FTX story, while unfortunate, underscores the need for increased transparency, especially for startups that are often under pressure to move quickly due to compliance checks.
Startups often face challenges due to necessary checks and procedures. Good communication with stakeholders is crucial, and regulators play a significant role in aligning businesses with industry standards. The crypto world has been likened to the “wild west”, and Africa is only just beginning to catch up. It’s not about scamming people, but rather about the crucial role of regulation.
Navigating the crypto landscape in Africa
FTX was a great platform where one could trade huge volumes, stocks, and gold. However, it was mismanaged, leading to its downfall. South Africa has only recently started the crypto assets register, highlighting the newness of the industry and the difficulties in setting up a regulatory framework.
Education is key as most people do not fully understand finance. Cryptocurrency is relatively new in Africa, but people are starting to buy and understand it. Many companies are starting to put crypto on their balance sheets, indicating a growing adoption.
One of the benefits of crypto is its potential for cross-border payments and safeguarding against inflation. In countries like Ghana and Nigeria, where the local currencies are very volatile, stablecoins offer an easy way to make payments to other countries in under three minutes.
The platform, not the coin, is what will make a difference in Africa. Despite the challenges, progress is being made. However, there is a lack of understanding by regulators, and more regulation is needed to improve market operations.
The adoption of crypto is picking up in African countries, and in 5 to 10 years from now, we can expect to see strong adoption in Africa. The FTX story serves as a reminder of the importance of good management, transparency, and the need for effective regulation in the crypto world.
