Cryptocurrency exchange Coinbase has announced a partnership with Yellow Card, a prominent African stablecoin exchange, to broaden access to USD Coin (USDC).
Coinbase revealed that through its collaboration with Yellow Card, millions of individuals residing in twenty African countries will be able to purchase the stablecoin USDC via Coinbase's wallet app starting in February. Users will subsequently have the ability to transmit USDC without fees through any application that permits link sharing, such as WhatsApp, iMessage, and various social media platforms.
According to a post by Coinbase, many of the countries where users will gain access to USDC are currently grappling with high inflation and are reliant on remittances. The new partnership aims to shield users' savings from economic instability potentially caused by volatile currencies. Additionally, Coinbase highlighted that traditional financial system remittances can take days to process and incur fees as steep as 6%, whereas remittances through Coinbase can be processed within minutes at a maximum fee of 2%. The World Bank estimates that remittances account for up to 20% of GDP for numerous developing nations.
Small and medium enterprises facing challenges in expanding their businesses due to hurdles such as opening USD or Euro accounts could benefit from the partnership with Yellow Card, stated Coinbase. Providing these enterprises with access to USDC "effectively will mean access to the global financial system," said Coinbase. "Any merchant can set up a Wallet in less than 30 seconds."
In the same post, Coinbase pointed out that some developing countries bypassed technological advancements like desktop computers and moved directly to using smartphones. Similarly, these nations can now "skip over an outdated, legacy financial system bogged down by slow speeds, high fees and geographic borders, straight to one that is up to date, global, and decentralized."
Founded in 2012, Coinbase facilitates approximately $76 billion in transactions every quarter according to information from the company's website. The company collaborates with 245,000 partners across more than 100 countries. Coinbase's Compliance Program employs best practices from the traditional financial industry, complemented by innovative technology.
According to a Milk Road article, "The partnership forms part of accelerating global growth plans for Coinbase as it seeks to bring cryptocurrencies to new markets. Recent international initiatives include rolling out spot trading services for non-U.S. institutional clients in December 2022."
Blockchain analytics firm Chainalysis reported last year that crypto adoption has surged in African nations, with residents turning to Bitcoin and stablecoins as alternative stores of value to counteract increasing inflation.
Other leading crypto exchanges have been active in Africa, including Binance, the largest crypto exchange in the world. Binance's philanthropic arm runs a Tech Scholarship Program, through which participants receive financial support for education in blockchain and web3 in partnership with universities and vocational training centers, Globe Banner previously reported. One program participant shared that after completing the program for free, she secured employment with a financial technology company in Africa.
Angela, a beneficiary of the Binance Charity Tech Scholarship, shared her experience with cryptocurrency in a video posted on X. After participating in the Scholars Program, she secured employment with a financial technology (fintech) company. The Scholars Program is an initiative of the philanthropic wing of the world's largest cryptocurrency exchange.