ACR #10: Pick and Pay Bitcoin: Will it Work?
Africa Crypto Report is a weekly look at crypto, blockchain and more on the African continent. Today, we are talking about bitcoin as a payment method. Also, check out the product of the week.
South African store starts accepting bitcoin.
South Africa’s third largest retail store, Pick n Pay, is now accepting bitcoin across its 1,628 stores, following a three-month pilot testing phase that started last November in 39 locations. Additionally, shoppers can buy airtime and pay other bills with bitcoin at the store.
A Twitter user shares his experience while using bitcoin to pay at the store.
What does this mean?
It’s always a sort of triumph for crypto fans when news like this break because it shows a gradual march towards mass adoption and the coin’s usefulness outside of trading and speculation.
Pick n Pay could attract some crypto holders in the first few months because of excitement, but retention is improbable.
It’s common knowledge that people generally “hodl” their bitcoin to become rich in the future, not for buying groceries, airtime or bus tickets. It’s explained by the law of money called Gresham’s Law that Bitcoiners like to use which implies that people will prefer to spend a (weak) currency that’s constantly devaluing in everyday transactions and hold a (strong) currency that’s appreciating. And over time, the strong currency (bitcoin) will drive out the bad currency (fiat) from circulation.
For example, if you lived in Nigeria, you’ll prefer to save and hold USD or bitcoin and spend naira, aside from it being the legal tender, for your everyday expense because the value of the naira is rapidly depreciating against the dollar or bitcoin.
Against that backdrop, I don’t think merchants should expect people to regularly pay with their bitcoin anytime soon. I believe there’s room for crypto payments (using stablecoins or with credit cards backed by bitcoin) but not so optimistic about bitcoin in particular as a payment method right now.
What else?
Nigerian Crypto Users and Enthusiasts Dismiss 100% BTC Premium claims
Recent reports suggesting that local residents are paying a premium of almost 100% on top of the prevailing price of bitcoin are not true.
African Crypto Exchange, Obiex, processes over $4.2 Billion in Transactions
The company said it experienced a 200% growth in user base and a 600% growth in transaction volume in 2022 alone.
Cryptocurrency Exchange Kraken Shuts Down Middle Eastern Operations
Kraken closed its office in Abu Dhabi and let go of about eight members of the team responsible for the Middle East and North Africa.
🆕 Product of the week
USD Stablecoin Virtual Card by Bitmama
Making international payments in Nigeria is like the proverbial camel going through the eye of the needle. You cannot pay for products charged in USD or any other foreign currency with local Naira cards. And to open a USD account with a local bank, it took me about 1 month to get my new account when I tried in December 2022.
Fintechs have been experimenting with virtual cards where you can convert your Naira to USD and use it with foreign products. However, they haven’t been that great and the exchange rate from Naira to Dollar is often much higher.
Bitmama’s USD virtual card works really well with USDT or USDC. Also, it seems to have a higher maximum spend than the other fintechs and it works with all the international merchants I have tried so far. But it has higher funding & transaction fees.
This is not a paid advert. This segment is to highlight African crypto products solving real problems.
What’s going on abroad?
UK lays out plans to regulate the crypto industry after FTX's collapse
The United Kingdom (UK) has revealed plans to curb some unprotective and incautious business practices that have surfaced in the cryptocurrency industry over the past year and have heavily influenced the ruinous occurrences replete in the market.
The Unusual Crew Behind Tether, Crypto's Pre-Eminent Stablecoin
According to a Wall Street Journal article this week, new information about the founders and owners of Tether holdings has emerged. The documents reviewed by the WSJ revealed that a bunch of founders and owners with inadequate experience in financial terms allegedly runs the $68 billion stablecoin empire.
Bitcoin Community Erupts in Existential Debate Over NFT Project Ordinals
Some prominent Bitcoin Core developers believe the new project is an attack on blockchain's original mission to conduct financial transactions.
What’s the meme?
What we are reading
How Bitcoin mining saved Africa's oldest national park from bankruptcy