The digital currency that knows no boundaries — Bitcoin has been rightly called as the universal currency. The decentralized nature of Bitcoin makes it a truly global medium for value exchange, not under the control of any one country or institution. This very nature of Bitcoin is now being utilized by many companies in the African continent to conduct trade with those in China.
Bitpesa, the Bitcoin payments application which started as a cryptocurrency based contender for Mpesa is now offering B2B and Forex payments solution to businesses in Nigeria, Tanzania, Democratic Republic of Congo and Uganda. The service allows companies in these four countries to make payments to any bank account in China in an efficient way.
The new service comes as a welcome change to African businesses which have so far been relying upon traditional money transfer channels or independent agents. According to reports, over 70 percent of the businesses in Africa currently use independent money transfer agents, who offer better pricing in comparison with conventional players. However, the risks associated with independent agents is much higher and the delays, significant.
There are also reported instances where middlemen are hired to physically deliver the money to suppliers and vendors in China and other countries to overcome the delays. Bitpesa encashes upon this situation by providing Bitcoin-based fund transfer solution which is 60 percent cheaper than other available options.
The current trade volumes between Africa and China is said to be around $200 billion (in 2016) and many Chinese firms have already made significant investments in the African continent. This has led to an increased frequency of movement of funds between Asia and Africa. Like Bitcoin transactions, Bitpesa based transactions will be settled in less than an hour. The recipient will get the funds directly into his/her bank account in China.
As Bitpesa offers a valuable service, the platform has also implemented strict KYC and AML process that requires the user to submit an identification document along with address and date of birth. The information is then cross verified against the banking database to ensure its authenticity. Upon approval, funds can be transferred between the parties.
Bitpesa is soon expected to expand its services to other countries, making Bitcoin live up to its expectations as the truly global digital currency.
Ref: CNN | Image: NewsBTC