Block-owned open developer platform TBD recently partnered with African digital assets exchange platform Yellow Card to launch a platform that facilitates fiat on- and off-ramps and payments in 16 African nations. The partnership aligns with TBD’s mission of creating global on- and off-ramps, including open-source technologies and standards, to foster the adoption of Bitcoin and stablecoins for commercial and financial applications. Yellow Card offers stablecoin and bitcoin payments to banks and mobile money operators in 16 African countries. Yellow Card will be one of TBD’s initial partners, providing global payments and fiat off-ramps to end consumers, who can send stablecoins, bitcoin, and receive payments in local fiat currencies.
At present, making cross-border payments in Africa can be costly, with fees amounting to nearly 10% of the transaction value, and can take several days to process through existing systems. However, in March 2023, TBD and Yellow Card teamed up to test payment rails in real-time from the U.S. to Ghana, Nigeria, and Kenya. The trial proved to be successful, allowing senders to initiate remittances in USD, and recipients to receive local fiat currencies through bank accounts or mobile money wallets, including MTN and M-PESA. By converting USD to Bitcoin or stablecoins, TBD facilitated the exchange between digital assets and local fiat currencies.
Emily Chiu, TBD’s Co-Founder & Chief Operating Officer, and Yellow Card’s Co-Founder and CEO Chris Maurice discussed the implications of this partnership for the African continent during a conversation on the sidelines of the Africa Fintech Summit in Washington, D.C.
TBD’s Work in Africa
Emily Chiu, expressed excitement about the partnership with Yellow Card, stating that TBD sees a huge opportunity to solve problems related to currency inflation and currency controls using stablecoins to help people store value. Chiu sees this partnership as exciting because it accelerates their presence in the continent, which is a significant opportunity they want to invest in, and there is also a broader opportunity with TBD.
Chris Maurice, Co-founder of Yellow Card expressed his enthusiasm about the partnership between his company and TBD, a Bitcoin developer entity owned by Jack Dorsey’s Block, and what it means for cross-border payments in Africa. Maurice described the current payment system as broken, especially against Africa, due to limitations on foreign currency. Countries have to make trade-offs on what necessities to bring in based on the available dollars, which he deems wild. Maurice believes that Bitcoin, stablecoins, and the work that TBD is doing with tbDex and decentralized everything, in general, make the market fairer. Liquidity is accessible, and the money that needs to flow in and out of African countries can match in a fair market way. He hopes more companies will follow Block and TBD’s example and come and invest in the continent and help to fix the problem.
In the background, TBD provides API(s) and developer services that abstract away the complexity and make it easy for app developers to embed functionality that enables these transactions to happen in real-time for their end consumers. Senders are able to initiate a remittance in USD and their intended recipient is able to receive local fiat currency in [real time] into bank accounts or mobile money wallets, such as M-PESA and MTN. In the background, TBD converts the USD into bitcoin or stablecoin and works with a network of partners to create liquidity between digital assets and local fiat currencies.
Emily Chiu stated that their platform does not plan to create their own stablecoin, instead, they are partnering with Circle (USDC) and want to catalyze use cases and utility around that stablecoin. The key to unlocking incredible utility for people lies in global interoperability, according to Chiu. TBD’s open-source model allows anyone to participate in building a technology platform that makes liquidity global, mobile, and interoperable.
To create a better system of trust, TBD is working with web5 and decentralized identity to build a trust layer for the Internet. They envision a world where people control their own identity credentials and can provide them to others, creating a self-sovereign identity world. Emily pointed out that the current system of trust is brokered by centralized intermediaries, such as exchanges or government entities. By contrast, a decentralized system of trust would enable streamlined transactions to occur without intermediaries. This would not only facilitate access to financial services but also bring down costs, as intermediaries currently charge a premium for the trust they provide.
“To us, having a better system of trust is what’s going to facilitate more access for people,” Emily said. “It’s insane to me that in the United States, if you don’t have a credit record, you don’t have an identity really through which to borrow money, that’s like crazy to me, right? So, there needs to be a better system of identifying who people are, verifying who your counterparty is, and that’s what’s going to unlock Commerce, unlock access to financial services platforms.”
Chris Maurice on Regulation, Future
Chris Maurice emphasized the importance of regulation and compliance for fintech startups operating in Africa. He believes that although there is already a big market in Africa, there is still a lot more opportunity for companies and money to flow into the continent. To achieve this, regulation and compliance should be at the top of the priority list for fintech startups. Maurice further explained that compliance has been a great competitive advantage for Yellow Card, as they are the only licensed crypto exchange on the continent.
Maurice acknowledged that navigating regulatory frameworks can be challenging, but it is necessary to establish trust and become a trusted partner for companies looking to work in Africa. He emphasized that regulation and compliance are crucial to getting more business and money flowing into the continent, which would ultimately help push Africa forward. Maurice hopes that more companies will follow suit and invest in obtaining regulatory approvals in Africa.
“We keep talking about the future of crypto in Africa, when crypto is very much, the present in Africa. Right now it’s happening. It has happened and it’s continuing to happen and it will continue to happen” Chris Maurice.