Tanjalo, a blockchain startup in Nigeria has launched an online marketplace where residents can buy and sell bitcoin. The Lagos based company officially began operations on October 12 in a bid to address borderless payments and access to cryptocurrencies in West Africa. Tanjalo’s CTO and Co-founder Tim Akinbo also runs the only node in West Africa.
Bitcoin enthusiasts look at Africa as a vast potential market for cryptocurrencies. Tanjalo is taking the challenge by allowing Nigerians to exchange their local Naira for bitcoin. The firm intends to add more digital currency alternatives over time. With cryptocurrency, locals can access a global payment network regardless of whether they have a bank account or not.
Speaking to Cryptovest, Tim, who runs the only bitcoin node in West Africa, said of the launch:
“Our mission is to offer people with the opportunity to participate in the financial ecosystem with or without a bank account or mobile money wallet especially in a region that has the highest rate of financial exclusion in the world.”
Nigeria, alongside Ghana, Kenya, and South Africa lead the continent in bitcoin volumes according to data from localbitcoins. Weekly trading volumes averaged at 1,140,000,000 Naira, roughly $ 3.2 million. But according to Tim, there is more trading activity happening offline that is not captured by peer-to-peer marketplace data. His startup is targeting a piece of this market and has already launched a beta where customers can buy bitcoins.
Nigerians are all too familiar with what can go wrong with fiat currencies. Last year, cornered by a dollar shortage, the Central bank of Nigeria imposed FX limits, a move that hurt local startups and businesses making international payments. The regulator’s 16-month dollar naira fixed peg forced locals to turn to 6 different exchange rates on the black market.
Tim says the nation’s dependence on US dollars from oil exports sometimes works against the country even choking intra-African trade between countries that neighbor Nigeria, like Ghana. He sees digital currencies as an inflection point for the new financial order.
Officials from the Central Bank of Nigeria agree cryptocurrencies are disruptive. At a conference in Lagos in September, Musa Jimoh Deputy Director/Head, Payments System Policy and Oversight, CBN said
“[we] cannot stop the tide of waves generated by the blockchain technology and its derivatives. Currently, we have taken measures to create four departments in the institution that are looking forward to harmonise the white paper on Crypto currency.”
Nigeria receives over $21 billion in remittances annually. The cost of remittances into African countries is highest at over 9% compared to all the regions of the world. Services like Tanjalo and up and coming Nigerian startups like BitPesa, Nairex, and Bitkoin.Afrika, can significantly lower costs by leveraging cryptocurrencies as a settlement currency and medium of exchange.