Binance Uganda got 40,000 signups in its first week
Stable, reliable and highly-transferrable currency is a luxury that Binance aims to supply.
Having a bank account at a local bank branch, to fill with a stable local fiat currency, is a luxury that many people don't have.
Mobile payment systems are helping to solve the first part of the problem by letting people move and store money without a bank account, while cryptocurrencies are helping solve the second part of the problem by allowing a choice of digital currencies that can be transferred locally or internationally without being
The need for these solutions meant that by the numbers, residents of sub-Saharan Africa were the world's fastest adopters of mobile payment systems, and are similarly keen on crypto. Binance might be able to attest to this with its new Binance Uganda branch, which first opened its digital doors in mid-October, receiving 40,000 signups in its first week, according to CoinDesk.
A warm welcome
Binance only offers crypto-to-crypto trading, although its new arm in Uganda will be offering fiat-to-crypto. But just like the vast majority of Uganda's residents, Binance won't have a bank account in the country and will instead handle fiat through a local mobile payments provider.
One of the key benefits of wider cryptocurrency usage might be the ability to reduce the barriers to cross-border money movement, drop extra international transfer fees and generally facilitate the movement of money.
"One of the major issues in the region – in the continent – right now is liquidity, and Binance will bring us liquidity," said Nairobi-based Marvin Coleby, co-trustee of the African Digital Asset Framework, to CoinDesk. "These digital assets can move, borderless, around the continent."
It also significantly reduces the cost reduces the costs involved in remittances. About 1 in 5 Ugandan households receive remittances according to the 2014 National Census, and these carry significant costs. This is one of the factors driving demand for bitcoin, said CryptoSavannah founder Kwame Rugunda.
"Unemployment is another real factor," he said. "It forces people to look outside of formal employment structures."
As technology moves ahead, this non-traditional work might be increasingly taking the form of Internet freelancing for a global client base, which means receiving international payments or even direct crypto payments when working through platforms like Bounty 0x. Non-crypto payment services like PayPal and its ilk may still be the most popular options here, but this could change quickly as extremely non-competitive international rates drive users elsewhere.
The rise of stablecoins might also be one of the driving forces that accelerates this shift. It eliminates the volatility downsides of bitcoin and delivers the luxury of stable value that's still largely absent from bitcoin, stagnant markets notwithstanding.
As Binance CFO Wei Zhou has previously noted, the exchange has encountered considerable demand for stablecoins in Uganda, and found that institutions prefer to hold stablecoins over bitcoin precisely for the luxury of stable valuation, and the wide acceptance of US dollars.
Binance has received a warm welcome in Uganda so far, and as its service range expands, and as more stablecoins roll out to Binance Uganda, so might its userbase.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA