How blockchain can help accelerate financial inclusion in Africa

Blockchain technology is revolutionizing the financial landscape, particularly in Africa, where approximately 900 million people lack access to traditional banking services. Don Tapscott, Co-Founder & Executive Chairman of Blockchain Research Institute, and Alex Tapscott, Co-Founder of the Blockchain Research Institute, shared their insights in a recent interview on CNBC Africa. The discussion highlighted the transformative potential of blockchain in driving financial inclusion on the continent. Tapscott explained that blockchain technology, which allows peer-to-peer transfer of assets like money, securities, and intellectual property, is ushering in a new era of financial empowerment. Unlike traditional systems reliant on intermediaries, blockchain enables trust through cryptography and software, offering cost-effective and efficient solutions for financial transactions. One of the most significant opportunities presented by blockchain is the ability to provide banking services to the nearly one billion unbanked individuals worldwide. With access to a mobile device, individuals can engage with banking services and remittances seamlessly, reducing costs and transaction times significantly. The Tapscotts commended Standard Bank, a leading financial institution in Africa, for its innovative approach to leveraging blockchain technology. By integrating land titles onto blockchain platforms, the bank is ensuring greater transparency and security for property ownership. This initiative has the potential to address longstanding issues related to land tenure and planning on the continent. Furthermore, the conversation delved into the evolution of digital assets, with Bitcoin emerging as a groundbreaking application of blockchain technology. While Bitcoin remains a valuable asset, the focus has shifted towards digital assets as versatile containers of value. These assets can encompass various forms of value, from stocks and bonds to art and votes, offering diverse opportunities for economic empowerment. Stable coins, digital assets pegged to traditional currencies, have gained traction in Africa, particularly in countries like Nigeria. The adoption of stable coins provides individuals with a secure means to store and transfer value, circumventing barriers associated with traditional banking services. During the interview, the Tapscotts emphasized the importance of responsible growth in the digital asset space, highlighting the need for regulation and oversight to mitigate risks. They also addressed the role of central banks in adopting blockchain technology, cautioning against potential privacy concerns and the concentration of power. As central banks explore the possibility of digital currencies, considerations around privacy, inclusivity, and financial sovereignty are paramount. While initiatives like the e-Naira in Nigeria signal progress, a balanced approach that prioritizes financial inclusion and user empowerment is essential. The discussion underscored Africa's unique position as a hub for blockchain innovation, driven by widespread smartphone and internet access. Blockchain-based tools offer a promising path towards increasing financial access and fostering economic growth on the continent. In conclusion, the dialogue between Don Tapscott and Alex Tapscott shed light on the transformative potential of blockchain in advancing financial inclusion in Africa. Collaborative efforts between industry leaders, regulators, and innovators are key to unlocking the full benefits of blockchain technology and driving meaningful change in the financial sector.