Binance Gets 40,000 Crypto Traders In Uganda

It seems things are working out in Uganda in terms of cryptocurrencies. In the latest digital asset news, the demand for crypto in the country appears to be booming. And yes, this is true despite global market doldrums. It is worth noting that Uganda is a country where nearly three out of four people do not have bank accounts.

Bank Accounts Not Needed

Binance Uganda signed up 40,000 users in the first week since the world’s largest crypto exchange launched its local subsidiary in October. The early results suggest a strong appetite among unbanked Ugandans for purchasing Bitcoin or Ether, the two coins the new Binance unit currently lists.

In a paper courtesy Stanford University researchers and was recently published in the American Economic Journal, 74 percent of Ugandan households are unbanked. As such, Binance’s chief financial officer Wei Zhou said:

“They [users] just have to have money within the mobile payment system. They don’t have to have bank accounts.”

Aside from the local focus, the effort differs from Binance’s flagship global trading platform in at least two other notable ways.

While Binance only offers trading of cryptos for other cryptos, its new unit in Uganda is partnering with a local mobile payments provider that will convert fiat to crypto or vice versa. (The partner asked not to be named, due to safety concerns related to managing large quantities of cash.) Like its Malta-based parent, Binance Uganda has no bank account.

“One of the major issues in the region, in the continent, right now is liquidity and Binance will bring us liquidity,” Nairobi-based entrepreneur Marvin Coleby in nearby Kenya, co-trustee of the African Digital Asset Framework. “These digital assets can move, borderless, around the continent.”

The Many Driving factors

Remittance is a crucial factor driving demand for Bitcoin in Uganda, Rugunda said.

A 2014 national census revealed nearly 10 percent of Ugandan households received remittance from neighboring Kenya, only a few percentage points below the most popular remittance sources in Europe, Sweden, and Germany. But these transfers carry high conversion fees, creating demand for alternatives.

“There’s a lot of cost in the financial system when you switch the currencies back and forth, in addition to inflation,” Zhou said. The latter further added:

“That tells us that a use case for cryptocurrency in Africa is as a hedge against inflation.”