The news that rapper Akon intends to issue his own coin – Akoin – and build a crypto community in Senegal where the coin can be used as a medium of exchange, may strike some as an odd move.
But it’s not that strange at all. From the outset, with the launch of Bitcoin, the goal has been to develop an alternative financial system which allows for privacy, efficiency, and through decentralization puts power back in people.
The coin is intended to operate at the heart of economic life in a crypto city yet to be built by Akon and his team on a 2,000-acres-big plot of land in Senegal. More than disrupting payments, Akoin comes as part of an ecosystem where participants can buy, hold, trade and pay crypto. Furthermore, the whitepaper indicates there will be the option for users to swap cryptocurrencies for fiat and even mobile phone credit on the Akoin network.
The initiative is part of Akon’s ongoing social entrepreneurship projects in Africa aimed at providing the necessary infrastructure that raises the overall quality of life and makes it easier for African communities and individuals to gain access to capital, generate wealth and prosper.
Of course, not all responses to the news have been positive, albeit most negative comments seem to be derived from an inability to take a ‘rapper disrupting finance’ seriously.
In our view, such criticism is not justified. Akon’s initiative fits a larger trend of celebrity philanthropy, although in this case, Akon made clear that this is intended to be a for-profit project. It is furthermore not the only project in Africa that Akon has been involved in. Since 2014, the rapper has been working to utilize solar energy to provide lighting across the continent.
When considering the project, it’s important to realize that crypto is nothing new to Africa. First of all, the contingent is big on mobile payments, and it has been for years,
One of the best examples of this is in Kenya where access to financial services has significantly increased with the spread of M-Pesa – once just a SIM card-based money application; now a comprehensive financial service provider.
Alongside M-Pesa, blockchain startup Bancor has been working to tokenize unofficial ‘community vouchers’, which have emerged in neighborhoods where exposure to Kenya’s national currency is shallow. Utilizing blockchain, Bancor is now linking these vouchers, making it possible to pay with them across communities.
Secondly, although highly diverse, African nations share some key characteristics that make it fertile ground for the adoption of crypto: economic difficulties, high inflation rates, volatile currencies, capital controls, underdeveloped banking infrastructure, a lot of young people, a distrust of government, and a relentless spirit of ingenuity.
It’s no surprise that a recent report by Arcane Research concludes that Africa is “one of, if not the most promising region for the adoption of cryptocurrencies.”
Whether or not Akon will succeed in his quest to empower communities in Africa remains to be seen. It will also be interesting to see how regulators and governments will respond to this project, and whether they care to seize it as an opportunity, perhaps as part of a larger post-colonial push for financial autonomy, or whether it will be treated as a threat to the status quo.