🤝✨ Supporting Diversity in Blockchain: Nigerian VC Firm Launches $8M Fund

March 11, 2023

Your 5 minute emerging market web3 weekly update

In This Issue

Asia
🔸Nigerian VC Firm Launches $8M Blockchain Fund to Support Underrepresented Founders
🔸Cash Is King: Nigerians Reject Central Bank’s Push for Digital Currency

Latin America and the Caribbean
🔸Brazil's Central Bank Chooses Hyperledger Besu for CBDC Pilot
🔸Nubank Taps David Marcus, Ex-Meta and Lightspark Co-founder, as New Board Member

Eastern Europe
🔸Crypto in Conflict: How Russia and Ukraine Are Leveraging Digital Currency in War
🔸Ukraine Suspends Use of Its National Currency on Crypto Exchanges, Binance Suggests P2P Services

Asia
🔸Iran’s CBDC Pilot Successfully Completed, Digital Rial Launch on the Horizon
🔸WeChat Jumps on the Digital Yuan Bandwagon

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Africa

Image Credit: Cytonn Photography via Unsplash

Nigerian venture capital firm EchoVC has launched an $8m blockchain fund called EchoVC Chain, which will focus on supporting under-represented founders and markets in Africa. The pilot seed fund will concentrate on three areas of blockchain functionality, including fintech infrastructure using stablecoins, decentralized finance and non-fungible tokens, and decentralized autonomous organizations that can organize informal networks to increase earning potential. EchoVC has previously invested in nearly 40 companies globally and grew its blockchain portfolio to seven investments across business-to-business infrastructure, DeFi, and market making.

Nigerians are rejecting their country's central bank digital currency (CBDC) and calling for a return to paper money, despite incentives from the government to encourage adoption. The shortage of cash came about due to restrictions aimed at pushing Nigeria towards a cashless economy. Despite attempts to spur adoption, less than 0.5% of Nigerians have used the CBDC, highlighting the risks to financial freedom and the lack of unique benefits of CBDCs for consumers. The experience in Nigeria serves as a cautionary tale for other countries looking to launch CBDCs.

Latin America and the Caribbean

Image Credit: Eduardo Soares via Unsplash

The Central Bank of Brazil has chosen Hyperledger Besu, a permissioned distributed ledger technology, for its digital real pilot due to its compatibility with the Ethereum Virtual Machine, transaction privacy support, and ability to incorporate additional modules. The pilot began on March 9, 2023, and if the tests are unsatisfactory, the central bank will extend the tests. The central bank has updated its guidelines for the digital real project, including the requirement of no regulatory asymmetries between digital real and existing financial systems, the coupling between systems, and the use of smart contracts and programmable money compatible with IoT.

Brazilian digital bank Nubank has appointed David Marcus, an expert in cryptocurrencies, as a new member of its board of directors. Marcus, who co-founded Bitcoin startup Lightspark, also led all payments and crypto efforts at Meta. He will support Nubank's expansion in its multi-country, multi-product, and multi-segment strategy, as the company continues to grow its customer base across Brazil, Mexico, and Colombia.

Eastern Europe

Image Credit: Shubham Dhage via Unsplash

Both sides of the Russian war in Ukraine have been using cryptocurrencies, with pro-Ukraine causes collecting around $200m in crypto donations, while pro-Kremlin groups and propaganda outlets raised a total of around $5m via crypto. Individual actors on both sides have been using crypto to bypass financial sanctions and acquire military resources for the front. Additionally, over $450m was paid to ransomware groups in 2022, many of which were believed to be based in Russia and some of which have openly supported the Russian government in its war effort.

Ukraine Suspends Use of Its National Currency on Crypto Exchanges, Binance Suggests P2P Services (1 minute read)

Ukraine has temporarily suspended the use of its national currency, the hryvnia, for fiat deposits and withdrawals on crypto exchanges, impacting the movement of funds to and from exchanges. Crypto exchanges like Binance and Kuna have informed investors about the inconvenience and suggested using peer-to-peer (P2P) services to exchange crypto and fiat currencies directly with other users. The move by Ukraine's central bank comes as a surprise, considering pro-Ukraine causes receiving around $200 million in crypto donations since the start of Russia’s war in Ukraine.

Asia

Image Credit: Ashkan Forouzani via Unsplash

The Central Bank of Iran has completed preliminary research for the launch of a potential digital rial being developed using Hyperledger Fabric, and aims to increase the scope of its CBDC pilot in the country's payment system. The rules governing a potential digital rial will align with those established for rial banknotes, and a digital rial would be distributed among individuals and banks, with the CBDC infrastructure recreating some blockchain features. Ten banks in Iran have applied to join the digital rial project, with all banks and credit institutions in Iran expected to start offering electronic wallets for using the upcoming digital currency.

WeChat Jumps on the Digital Yuan Bandwagon (2 minute read)

China's leading social networking and payment app, WeChat, has added the country's central bank digital currency (CBDC) to its payment services, allowing users to make payments on certain WeChat mini-programs and other platforms. The move aims to help broaden the appeal of the digital yuan, which is being piloted in at least 26 Chinese provinces and cities, and saw a jump in transaction volumes on Chinese e-commerce platforms during the 2023 Lunar New Year shopping season, helped by e-CNY handouts from authorities. WeChat now joins Alipay in supporting the fast payment function of the digital yuan wallet, with additional integrations expected to become available gradually.

Thanks for reading and have a great week ahead!

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Written by Jon Lira. Connect with him on LinkedIn.

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