The behavior on the roadside in the largest urban slum in Africa are typical stands that sell vegetables. What is not typical is their acceptance ofBitcoinas a form of payment.
Around 200 people use Bitcoin in Soweto West, a neighborhood of the Kibera Slum in KenyaCapital. It is part of an initiative to expand financial services to one of the poorest and most exposed areas in the country.
His promoters say that the introduction of crypto to the ideals of Bitcoin fits as accessible, democratic technology – but experts also say that they also have great risks.
Bitcoin came through Afribit Africa, a Kenyan Fintech company, through its non -profit initiative to improve financial integration to Soweto West.
“In many cases, people in Kibera have no opportunity to secure their lives with normal savings,” said Ronnie Mdawida, a co -founder of Afribit Africa, a former community worker. With Bitcoin “you do not need a documentary to have a bank account … that gives you the basis for financial freedom.”
Bitcoin, the first and largest crypto, was founded in 2009 as a decentralized digital asset after the global financial crisis, which could act as an alternative payment method.
The asset has a popular use as a value memory such as a digital gold shape. Bitcoin has attracted enthusiastic supporters because prices have increased by almost 1,000% in the past five years. However, its volatility and lack of regulation are concerns.
Afribit Africa introduced Bitcoin in early 2022 through crypto-declining grants to local garbage collectors, which are often financed by non-profit organizations. The groups consist of dozens of young people who, according to Mdawida, are rather open to new technologies.
After gathering on a Sunday to collect garbage, garbage collectors receive Bitcoin worth a few dollars. Africa Africa estimates that it has built around 10,000 US dollars into the community. Garbage collectors act as the main day of Bitcoin in Soweto West. In Kibera, many people earn about one dollar a day.
Now a small number of other residents have Bitcoin, and some dealers and motorcycle taxis accept payments in crypto.
The 23-year-old Damiano Magak, a garbage collector and food seller, said that he prefers Bitcoin M-Pesa, the omnipresent mobile money platform in Kenya, since the M-Pesa transaction costs are higher and the network can be slower.
There are no fees for M-Pesa transactions between individuals or companies up to 100 Kenyan shillings (78 cents), but then the fees with the transaction size increase. Fees for the Lightning Bitcoin network, in which transactions take place, are free of charge if people use a platform that Africa has introduced into the community.
Onesims many, 30, another garbage collector, said he feels safer with his money in a Bitcoin letter pocket instead of cash for crimes.
Some merchants have found advantages for the acceptance of crypto, including Dotea Anyim. She said around 10% of customers in her vegetable stand in Bitcoin.
“I like it because it is cheap and quick and has no transaction costs,” she says. “When people pay with Bitcoin, I save this money and use cash to replenish vegetables.”
The possibility that crypto prices could continue to increase also appeals to the residents of Soweto West. Magak and many said that they now had around 70% to 80% of their net assets in Bitcoin, a much higher level of exposure than most people.
“It’s my value and I risk it in Bitcoin,” said Magak.
This affects Ali Hussein Kassim, a fintech entrepreneur and chairman of the Fintech Alliance in Kenya.
“In an extremely volatile capital like Bitcoin, it is an overexposure. I can’t afford to lose 80% of my assets. How about a man in Kibera?” Said Kassim. “They expose an endangered community to an ecosystem and financial services that they cannot necessarily afford to play them.”
Kassim recognized the potential advantages that could bring digital assets, especially when facilitating cheaper cross -border payments such as transfers, but could not recognize the advantage in Kibera.
The volatility of Bitcoin could destroy the advantages of cheaper transaction fees, said Kassim, and Bitcoin did not have the same protection as other financial services due to a lack of regulation.
Mdawida disagreed and described bitcoins unregulated nature as an advantage.
“We are not afraid of the associated risks,” said Africa’s co-founder and found the group’s investments in Bitcoin formation in Kibera, including training courses on financial competence and crypto courses in the community.
The efforts to introduce Bitcoin to developing countries were faced with challenges. Bitcoin was adopted in El Salvador and as a legal offerCentral African RepublicBut both countries have reversed their decision.
In Kenya, the digital asset sector was confronted with legal and regulatory challenges, including suggestions for cryptocurrency advertising gifts. This small project, which only focuses on Soweto West, was allowed.
“I considered notifications on my cell phone when Bitcoin rises … and everything smiles,” said Magak. “Whenever it fluctuates up and down, I know at the end of the day that it will only rise.”
This story was originally on Fortune.com
