40,000 Traders of Cryptos Sign Up to Binance in Uganda
In a country where 74% of the population don’t even have bank accounts, demand for cryptos has been constantly increasing. A total of 40,000 individuals chose to sign up to Binance Uganda during the first week of its launch. There is increasing interest from Ugandans who don’t even have a bank account but who are looking to buy BTC and ETH, the two cryptos listed on the new Binance platform. Users only need to have money via the mobile payment network, as per Wei Zhou, the CFO of Binance.
The new platform in Uganda works in collaboration with a local mobile payment provider that will help convert fiat to cryptocurrencies and vice versa, as opposed to the original platform, based in Malta, which offers only trading in cryptos. Like its parent company, there is an associated bank account. Marvin Coleby, an entrepreneur based in Nairobi, stated that Binance will solve the issue of liquidity in the region. Funds held in crytpos can move without borders, he continued.
A new aspect was introduced by Binance Uganda, in which users are required to undergo a KYC procedure upon signing up, in which they verify their real national IDs. The first platform only requires an email address to allow trading in cryptos.
Before this project, Ugandan traders relied on P2P exchange platforms such as LocalBitcoins or services from the likes of Golix. Kwama Rugunda, co-founder of blockchain-based startup CryptoSavannah and chairman at the Blockchain Association in Uganda, said that these platforms hardly represent the population because they don’t serve individuals who don’t own a bank account.
Furthermore, Zhou shared plans that the company will be keeping an eye on possible hires to handle local operations in order to support the company and expand later on with similar branches in either Nigeria, South Africa, or Kenya. He said Uganda will be the center for possible future expansion on the African market.
Reasons Behind High Crypto Demand
A major reason for the growing demand for cryptos in Uganda is remittance, according to Rugunda. A study back in 2014 showed that about 10% of households in Uganda receive remittance from Kenya, with just a few receiving it from Europe. However, this option requires high fees to convert money so there is a growing demand for an alternative.
Another factor is the excessive unemployment rate in the country outside agriculture or the importing of products, he continued, so people are looking to make money in unconventional ways.
Moreover, users of Binance Uganda are still far from reliant on BTC for daily remittances. Elizabeth Rossiello, Chief Executive Officer at BitPesa in Kenya, stated that many users in Uganda have grown skeptical of cryptos after they were defrauded out of great amounts by criminal organizations that told them they would get BTC.
Zhou expressed his agreement that Uganda is a truly rising star in the African region with a political system in place that embraces cryptos. He said that this step is the first of many to come from Binance in serving Africa.