Unless you travel outside the U.S. or send money to Africa, you may not care about the fees and inconvenience of sending fiat money.
Remittances are a lifeline for many people in sub-Saharan Africa, but it costs on average 9.3 percent to send $200 there — the highest remittance rates on the planet, according to a 2019 World Bank report. The cost drops by as much as 90 percent when money is sent through cryptocurrency-based fintech companies.
If you are a Nigerian traveling to Ghana, you have to change naira to dollars, go to Ghana and then exchange the dollars to cedis. There are fees involved.
Eric Annan, Amadeu Alexandre Felipe, and Victor Akoma-Philips, understand the problem at hand. Traveling between countries on the continent is common for them. They set out to solve the problem on the blockchain by creating the KBX Wallet and its parent, KuBitX.
Their wallet can be used for residents in all 56 African countries.
With a background in banking, finance and investing, Annan worked for Chinese telecom giant Huawei. He traveled extensively across Africa and Asia to attend conferences, teaching himself about blockchain technology.
“This is the problem we identified and are aggressively trying to solve to make life easier for Africans to travel in Africa and elsewhere,” Annan told Moguldom. The goal is for users to be able to send and receive money from relatives abroad in the U.S. and Canada or Europe with their KBX wallet, without fees, and instead of waiting three-to-four days, receive the money in seconds.
The founders are located in different countries. KuBitX is registered in Mahé, Seychelles and incorporated in Nigeria.
KuBitX launched a digital currency wallet in 2018 that allows any African to pay bills and send money instantly. It was started to help bring financial freedom to its users by providing immediate access to money sent peer-to-peer without the hefty exchange rates.
“With KBX Wallet you can spend one currency in any part of Africa all powered by blockchain technology,” the KBX website says. Annan calls it a “financial passport.”
We have been able to scale and build up credibility by being the very first wallet that has solved a very old problem in Africa — enabling all of our currencies to interact on a wallet by tokenizing (them). We are the first Black wallet that has solved a real problem by not just treating cryptocurrency like it is only bitcoin or ethereum. We tokenized real assets.”Eric Annan, African co-founder of blockchain-based KBX Wallet and its parent, KuBitX.
Annan and the team are not alone in thinking blockchain holds the key to financial wealth in Africa. Binance has committed to donate $1 million for cryptocurrency education in South Africa. Experts say there are active crypto communities in other African countries including Zimbabwe and Nigeria.
“Blockchain itself cannot automatically take the center stage or become the next big thing on its own,” Annan said. “We believe for people to actually understand blockchain, we need to be a bridge by connecting to the existing infrastructure.”
Annan shares with Moguldom how the continent can find economic freedom by building its own solutions and how adoption is picking up during the coronavirus pandemic.
Moguldom: How did you start KuBitX?
Eric Annan: I am not the only creator. I founded the company with two other amazing people from Nigeria and Angola. Together, with smart individuals as founding team members, we are happy to have developed a wallet from the ground up that today is meant to be a financial passport that Africans can use across the continent and globally.
KuBitX is a movement. KuBitX is an idea and a philosophy. It is a passionate drive. I have been in the blockchain space for the last four years. I took an interest in it by reading, learning, and traveling extensively across Africa and Asia to attend conferences to understand this technology. My background is banking and finance, mainly investing. I also had the opportunity to work with a telecom company, Huawei, a Chinese company with a presence in Ghana, as an account manager for about three-and-a-half years.
I resigned in 2014 to start my entrepreneur journey. I strongly believed that Africa needed to build entrepreneurs. I feel that Africa needs to develop and build enterprises, businesses from the ground up. We need to solve problems in Africa for Africans. Africa has so many challenges. But what I realized as a young man was that most of the solutions we have in Africa were not conceived with Africa in mind.
For us to be able to have economic emancipation, economic freedom, economic power, to be able to get people to understand how to create wealth, get our people to understand how the world works through creation, through delayed gratification, through understanding the future, and identifying problems in the market, we needed to develop a solution to reduce poverty.
Knowing this enabled me to use my background in banking and finance. I am Ghanaian by birth and African by right. I came to Nigeria and it exposed me to amazing people — senators, governors, executives, and individuals who see the potential of Nigeria.
In 2017, I started building the first blockchain exchange in Nigeria called Digitalkudi.com. That was the first project I built. I was buying bitcoin and selling bitcoin in Nigeria and Ghana. But I realized that the opportunity is so much bigger and that I cannot do it all alone.
I wanted to build something with a generational impact. I am a person who believes that we need to begin to look at how we can all solve the problem together. It is not just me, me, me or I. I set out to connect with like-minded founders. I connected with Victor and Alex as co-founders. Victor has used his network of people who have worked with different institutions like Google, Amazon, MTN, Dell PwC, BP Oil, and others for us to come together to build this project, which started in 2018 from zero. Together, we built an amazing solution, the KBX wallet, which has gained the interest of the public and users across the globe.
Moguldom: DigitalKudi is still operational but you have been focused on promoting this enterprise instead. What were some of the challenges in going from an exchange to a wallet? Were there any lessons learned you care to share?
Eric Annan: In 2018, when we started the project, we were optimistic about building one of the biggest exchanges in Africa. We wanted our solution to be the fastest in the market. We hired a company in the U.S. to build an exchange for us. Because of critics, we couldn’t raise enough money to be able to remain competitive. Even though our offering was better than all the exchanges in the market, we didn’t have the capital to be able to compete and to attract users and in essence, revenue.
If there are no users, there is no revenue.
After about eight months we realized that Africa needs more financial inclusion. Blockchain is still a new thing people do not understand nor do they use an exchange. The only way we can trigger more financial inclusion in Africa is to make blockchain easy for the average man in the middle to understand.
Because in Africa, mobile penetration is so high. We are talking about 130 percent year over year. We have about 500 million users of mobile phones. We have more active young people with about 60 percent of the 1.3 billion population of Africa, between 18 to 35. So, you are talking about 700 million people.
So, it makes sense to build a wallet that can solve real needs in Africa. So, we pivoted. We built a wallet that can easily swap African currencies to a digital currency that can be used to purchase things or send money. For example, if you are a Nigerian and you are traveling to Ghana, you had to change the naira to dollars, go to Ghana and exchange the dollar to Cedis. There’s so much cost involved.
Our wallet can provide use for residents in all 56 African countries. This is the problem we identified and are aggressively trying to solve to make life easier for Africans to travel in Africa and elsewhere — for our users to be enabled to send and receive money from relatives abroad in the U.S. and Canada or Europe with their KBX wallet, without fees, and instead of waiting three-to-four days, receive the money in seconds.
Moguldom: Many people have been scammed in the past with digital currency. Is it a challenge convincing them to use your wallet because of fraud in the past?
Eric Annan: We’re ahead of people, right? People take time to adapt to innovations. So, for any new innovation to scale, you need to understand the transition phase. We, at KuBitX, believe that blockchain itself cannot automatically take the center stage or become the next big thing on its own. We believe for people to actually understand blockchain, we need to be a bridge by connecting to the existing infrastructure.
The average man who understands banking to be money in his hand that when he goes to bank and withdraw money, he gets the money in his hand, needs education in understanding how blockchain works. We are teaching them that with our wallet, they can see their money faster. By comparing the two, they see this whole blockchain is fun, not just a techie gimmick and it makes life easier.
We organize community meetups by educating the people on the future of blockchain and the future of decentralized finance every week. We also use Zoom, where every Tuesday and Friday we educate people about blockchain.
Today, with the coronavirus we can get people to comfortably transition from physical money to decentralized and digital money on the concept of obtaining your money without touching it and contracting an infectious disease. Our approach has been making the technology as easy for people as it is to make a phone call.
The saying, “once bitten twice shy,” is real. I was a victim of a scam in 2017. I lost hundreds of thousands of dollars in cryptocurrencies, in ICOs. But that was a lesson, right? I learned my lesson there. And that was the motivation for us to say, “We can build a system, a platform that can bring back the confidence and the trust.”
We launched this project differently and with transparency. Our mission is very simple. We serve the underbanked and unbanked in Africa through financial inclusion, financial education, inclusion, and adoption of innovative solutions. We believe that with fruitful collaboration with mainstream financial institutions like banks and payment services, we were able to hold and gain trust.
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Yes, every technology has the potential to do bad things or scam people, but we are not here to be part of that. We are here to create our future with Africans. We listen to and build with the feedback of our users and community. When we launched Jan. 1, we had a lot of interest and have about 1,200 downloads, with our transactions growing exponentially daily. So we have been able to scale and build up credibility by being the very first wallet that has solved a very old problem in Africa by enabling all of our currencies to be able to interact on a wallet by tokenizing our currencies. We are the first black wallet that has solved a real problem by not just treating cryptocurrency like it is only Bitcoin or Ethereum. We tokenized real assets. We believe it is a first globally, to be honest with you, to be able to achieve this with success.
Moguldom: Have you raised any funds with any venture capitalists?
Eric Annan: No. We started this with our founders’ capital and resources. We received help from family and friends to help build the exchange, which of course did not work. When we pivoted, we had a private investor to give us about $250,000 Canadian. We also received $100,000 from another company that also wanted to collaborate with us to use our wallet for their community. So as of now, we have not raised any money from any VC. We anticipate we will be able to prove our value and appeal to a VC or angel to enable us to build this impact-driven solution, especially in Africa where financial inclusion is a major issue. Individual and collective financial growth is a major, major gap that we seek to fill, and we are driving that value proposition in Africa.
Moguldom: Where do you see your wallet in five years?
Eric Annan: This wallet would become a choice in the market not only in Africa but globally. It is on our roadmap to do so by 2021. This wallet could be used in most e-commerce shops where you pay with a KBX wallet. We want to make the wallet an everyday use in Africa, just like we have WeChat in China. We hope our solution will be part of a new plan to digitize Africa. We want our wallet to be the first call for any donor in Africa, where they can donate directly to the recipient without going through a third-party. We want to eliminate fraud and corruption in NGO, venture, and our marketplace. We want it to be a wallet of trust and without any exploitation. We want to collaborate with anyone who seeks to see our future and wants to journey with us in becoming a pioneer and disrupter in blockchain. This wallet has enormous opportunities for the entire African continent. We need blockchain to solve most of our problems, and we have just started our journey.