FEATURE-South Africa bitcoin range aims to ride out crypto crash

[ad_1]

* South African township launches bitcoin economy

* Founders hope cryptocurrency will help fight poverty

* Critics warn of risks to vulnerable users

Almost every afternoon, surf instructors descend the sandy hill separating their township from South Africa’s Mossel Bay beach to earn bitcoin in exchange for teaching kids how to catch its famous waves.

A slump in cryptocurrency prices this year has caused many small investors to ditch their coins, but the charity surf school coaches are getting all their salaries in bitcoin as part of a nascent grassroots initiative to bolster the financial inclusion. “Before, I used to spend (money) quickly,” said Luthando Ndabambi, senior surf instructor at The Surfer Kids.

“But now I’m saving, I’m thinking about the next ten years,” said Ndabambi, sitting at the charity’s beachfront office where the wetsuits were hung out to dry. Crypto investors have suffered a series of blows this year: bitcoin’s value plummeted around 60%, while digital coins Luna and TerraUSD crashed, and the implosion of major crypto exchange FTX left approximately one million creditors face billions of dollars in losses.

But as regulators call for tighter controls on crypto, some bitcoin evangelists who believe the coins are a force for good are funneling money into socially minded projects. The Bitcoin Ekasi program – which means “Bitcoin in the Township” in local slang – was started last year by Hermann Vivier, who owns a tourism business in Mossel Bay and runs the charity The Surfer Kids.

He said the program to encourage bitcoin usage among residents of the impoverished township of JCC Camp along the beach can help people who find it difficult to access traditional banking services due to fees or charges. practical obstacles such as the lack of identity documents. “We are seeing daily adoption (of bitcoin) out of necessity for the billions of unbanked people,” Vivier told the Thomson Reuters Foundation.

“I wanted to democratize bitcoin, help people access it so they could have the freedom to transact and think about their future.” However, the volatility in the value of cryptocurrencies means they pose a risk to low-income users, said Ashlin Simpson, lead technology expert at the University of Cape Town’s Center for Social Science Research.

“People in already vulnerable financial situations cannot afford to suffer financial loss,” she said, adding that some may also lack the technological knowledge to fully understand complex and largely unregulated systems. “Nothing comes without risk and crypto is no panacea for financial freedom.”

BITCOIN BEACH cryptocurrencies, which allow “peer-to-peer” transfers between online users without intermediaries, were originally designed to be free from scrutiny by governments and central bank authorities.

During the COVID-19 pandemic, Vivier turned to bitcoin donations to keep his surfing awareness work afloat, and from there he launched the broader Bitcoin Ekasi program. It was inspired by – and is now partially funded by – the Bitcoin beach in the Salvadoran surfer town of El Zonte, where businesses started accepting bitcoin payments in 2019, before the digital coin became legal in the country. Last year.

Today, about 10 convenience stores in JCC Camp Township accept bitcoin payments in addition to cash. The project uses donations to top up store owners’ bitcoin savings to their previous rand equivalent if their value drops by more than 30%.

The Surfing Kids instructors can also redeem their bitcoin through apps that allow them to convert it into vouchers for everything from electricity to pizza. Bitcoin Ekasi has founded a free learning center that pays surf school children a weekly bitcoin reward worth around R30 ($1.74) for taking literacy, calculation and basics of bitcoin.

“When I first heard about bitcoin, I thought it was a scam,” said Nomsa Williams, 50, the center’s teacher, who is also paid in bitcoin. “But I learned that…it’s not just for white people and billionaires.”

Vivier said the program “prepares the future” of the township for when bitcoin recovers and becomes more mainstream. “We keep praying for bitcoin to rise again… (The drop) has hit small businesses hard,” said Vuyisa Sakela, a police officer and convenience store owner, who estimates that 20% of their payments are in bitcoin. .

Despite the uncertainty, Sakela said digital payments are safer in the crime-ridden township than cash, as it’s harder to steal digital currency, and he’s happy to be at the forefront of financial innovation. “BITCOIN FOR FAIRNESS”

Sub-Saharan Africa accounts for only 2% of cryptocurrency transactions globally, but countries like Nigeria, Kenya, and South Africa have developed sophisticated markets that use it for “everyday financial activity. “, according to blockchain research firm Chainalysis. He found that African users typically aim to avoid fees on remittances, protect their money from high inflation, or earn money due to lack of job opportunities.

Surf instructor Ndabambi said bank charges often eat into what little he has been able to save in the past. “Now my dreams for the future are different,” Ndabambi said.

“I want to open a township restaurant where customers can pay with bitcoins.” Elsewhere in Africa, the non-profit Bitcoin for Fairness is educating people in countries including Zambia, Ghana, Zimbabwe and Nigeria about currency, while a blogger has used bitcoin to support displaced people by a volcanic eruption in the Democratic Republic of the Congo in May.

Yet around three-quarters of crypto users globally have lost money, according to an estimate by the Bank for International Settlements (BIS) that highlighted “multiple boom and bust cycles.” In JCC Camp Township, members of Vivier and Bitcoin Ekasi said they believe the currency will rebound.

“Sometimes you crash but you get back up,” Ndabambi said, likening it to surfing. “Bitcoin will be up and running again and my plan is to stick with it.”

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

[ad_2]