Blockchain Impact Investing Could Be the Key to Africa’s Financial Inclusion
The potential of blockchain and other types of distributed ledgers have been touted as the biggest financial innovation in recent years. Immutability, transparency, and efficiency are key factors for creating an inclusive financial system. Impact investing with a focus on blockchain can help nurture a more robust financial system, as reported by Banking Tech, June 7, 2019.
Sustainable Investing Trends
Impact investing is an investment thesis that predicates the idea of capital allocation into projects that aim to better the world and enrich society. General impact investing themes revolve around water conservation, renewable energy, or climate change.
Bamboo Capital believes the rage around impact investing could help empower people in more innovative ways. The cost of sending bitcoin (BTC) is incredibly cheap when compared to an international bank transfer method; this is due to the intrinsic nature of a blockchain to bypass bureaucracy and work by mathematical proof.
Africa is currently fostering a mobile phone revolution by creating easy banking solutions that can be used through a phone. The first digital currency, M-Pesa, is a money transmission scheme that allowed users in Kenya and Tanzania to transfer money via text messages. Africa’s ability to absorb innovation is rapidly increasing – a trend being witnessed in most emerging markets. Blockchains have the ability to fundamentally change the way the entire continent – and the world – banks. Blockchains can be harnessed in every competitive industry from banking and healthcare to energy transmission.
The advent of the blockchain era, ushered in by Satoshi Nakamoto, revolves around the ideal of empowering the powerless. While many private development companies are implementing frameworks to bring distributed ledgers to Africa, there is a wide array of problems that can be solved through the revolutionary technology.
Coupling impact investing and blockchain could lead to a mass inflow of capital into revolutionizing the legacy systems of emerging countries, allowing them to take a step closer to being on level pegging with the rest of the world.
Harnessing Blockchain
A lot of institutions see blockchain in a bad light after the 2017 ICO fraud exodus and cryptocurrency bubble. Since then, they have aggressively pushed the narrative of that true value lies in blockchains – not Bitcoin.
While this a slightly ignorant view, they are attempting to utilize the massive potential of blockchain and distributed ledger. Though Jamie Dimon thinks Bitcoin is a fraud, J.P. Morgan still launched their own permissioned fork of Ethereum and issued their own digital currency. The uncertainty of Bitcoin is what scares institutions, so their inclination toward their own chains is understandable.
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Ashwath Balakrishnan, Khareem Sudlow
