TradeLens is an example of an African blockchain solution. It allows traders to upload documents to one chain and track the status of all paperwork. It has already signed up more than 20 terminal operators worldwide, including Nigeria, Liberia, Egypt, and Cote d’Ivoire. This technology has the potential to reduce risk and increase transparency for cross-border traders, while also opening markets to a wide range of actors.
The TradeLens platform is an ecosystem that encourages innovation by providing an open API environment, a sandbox, and a marketplace. Developers can attach sensors to transport and cargo to track and document their movements. The platform records the data, which is used to track the location and health of the cargo. It can also help in the management of cargo through blockchain. This platform can be used by the private sector and other organizations in the sales chain.
The TradeLens ecosystem consists of different components. The advisory board has the power to design and implement the ecosystem strategy. The council consists of large companies, representatives of government organizations, and international organizations that deal in the transportation of goods. The board selects the validators, which are organizations that verify the transactions and create new blocks in the blockchain. Those who become validators are typically large players in the shipping industry, such as Mediterranean Shipping Company. The fourth-largest carrier in terms of cargo carrying capacity, CMA-CGM, was also given validator status.
Nigeria’s largest switching and payment processor, Interswitch, has recently launched the Global Mall feature in Quickteller. This feature allows Nigerians to make international purchases using a single shopping cart and share the bill. Interswitch recently announced a partnership with Microsoft to deliver a blockchain-based supply chain service. The partnership with Microsoft is an example of how blockchain can help advance Africa’s economic growth.
The startup has been developing this service for several months using Microsoft Azure Blockchain Workbench, a prebuilt infrastructure built specifically for the purpose of experimenting with Blockchain technology. The Interswitch platform targets small and medium-sized businesses, banks, and corporations. They aim to simplify the process of acquiring finance and increase entrepreneurs’ access to finance and expand their businesses. However, there are some concerns associated with blockchain, particularly for developing countries.
Like many cryptocurrencies, Diem will exist in digital form, and not as a physical asset. The digital currency will be backed by a centralized digital ledger, called a blockchain, which will record and verify every transaction. Initially, the Diem association aimed to back the cryptocurrency with a basket of assets denominated in major global currencies. As it increased in value, the Diem association would purchase more underlying assets and sell them at a profit.
Since the launch of the first prototype of Diem, the Diem project has undergone significant change. The project has been updated based on feedback from regulators, but there is still limited progress. In May 2020, Facebook rebranded the Calibra payments unit to “Novi”, and the Libra Association changed its name to Diem. It also has a US dollar backing, which is an effort to distance itself from the Libra flop.
Africa is home to a large informal economy with $1tn in wealth, but traditional banks have been slow to serve these people, in part due to their high cost structure. Many informal businesses use cash as the primary form of exchange, limiting trading within their immediate circle. Blockchain could be the answer. This revolutionary technology can facilitate trade between African companies in ways that have not been possible before. Listed below are three ways blockchain is changing the way Africans trade.
Digital currencies solve a number of problems. These include the disparity in working with local and major currencies, and the need to make numerous conversions to move money within Africa and beyond. Other barriers to growth include lack of payment rails and different regulatory frameworks. Blockchain technology is making it easier than ever to exchange currencies between Africa and the rest of the world. With the rise of digital currencies, Africa can finally take advantage of these opportunities.
The genesis of the Diem project was in Nigeria, where a fintech company called Flutterwave has been developing technology to combat a severe shortage of tech workers in Africa. Then, another fintech company called Andela came into existence, which tackles a similar problem. Facebook holds a 71 percent market share in Africa, and is looking to use the social network’s reach to bring digital money to the continent. In its vision, Facebook has created a stable coin that is tied to a basket of low-volatility assets, including short-term government securities, bank deposits, and commercial paper. A stable coin can avoid the volatility risks of a cryptocurrency and has the potential to be adopted by more users.
The first incarnation of the Diem token will be backed by a basket of currencies. These will serve as a substitute currency for unstable currencies, enabling new functionality and reducing costs. It is important to note that this solution is not suitable for every country or person. It will only work for those with access to internet and mobile technology. However, the Diem token has a long way to go before it is available to all.