How COVID-19 is reshaping the crypto industry

As we approach the fourth industrial revolution, blockchain technology is emerging as a disruptive force that could potentially revolutionize existing economic and business models. However, the COVID-19 pandemic has brought about unexpected patterns among cryptocurrency traders, leading to a reshaping of the industry. Norbert Haguma, CEO of AfricaGen, recently sat down with CNBC Africa to discuss the impact of the pandemic on the crypto industry. Haguma highlighted the contrasting reactions observed in different regions, particularly in Rwanda where an increase in crypto trading has been driven by the need for additional income due to revenue losses. On a global scale, there has been a reduction in liquidity as investors are withdrawing funds to have cash on hand. The disparity in behavior between regions can be attributed to factors such as the scale of trading, the demographic of investors, and varying socioeconomic circumstances. Rwanda, with a smaller pool of traders, has seen an uptick in crypto trading fueled by the economic implications of the pandemic. In contrast, the global market features larger capital investments and investors facing urgent financial needs, prompting many to liquidate their assets. The push for digital payments amid the pandemic has created an opportunity for blockchain technology to address the issue of cashless transactions in Africa. As governments promote contactless payment methods to reduce the risk of virus transmission, blockchain presents a viable solution to facilitate seamless digital transactions within the continent. Haguma emphasized the importance of embracing a cashless economy not only within countries but also across the African continent. He highlighted the potential of the African Continental Free Trade Area (AFCFTA) to enable efficient cross-border payments and transactions. By removing barriers and costs associated with digital payments, African nations can streamline financial interactions and foster economic growth. The implementation of digital payment initiatives has already begun in countries like Kenya and Rwanda, with measures to eliminate transaction fees and facilitate easier money transfers. Haguma emphasized that the transition to widespread digital payment systems can be achieved rapidly with the right political will and regulatory support. He cited successful examples within East Africa and emphasized the importance of collaboration between telecom companies and governments to drive the adoption of digital payment solutions. In light of the evolving digital landscape, Haguma pointed out that the pandemic is not just reshaping the crypto industry but the entire digital economy. The rise of online creators on platforms like Instagram and YouTube, coupled with the growth of e-commerce businesses in Uganda, signifies a shift towards a more digital-centric economy. Haguma underscored the significance of fee-free transactions and highlighted the necessity of enabling easy peer-to-peer payments to stimulate economic activity. He stressed the need for a future where transactions are seamless and individuals can transact without incurring excessive fees. The ongoing transformation spurred by the pandemic is poised to revolutionize how businesses operate and how individuals engage in economic activities. As Africa navigates the challenges posed by the global health crisis, the crypto industry and the broader digital economy are adapting to new paradigms and opportunities.