Despite global market doldrums, demand for cryptocurrency appears to be booming across Uganda, a country where nearly three out of four people don't have bank accounts.
Revealed exclusively to CoinDesk, Binance Uganda signed up 40,000 users in the first week since the world's largest crypto exchange launched its local subsidiary in October.
The early results suggest a strong appetite among unbanked Ugandans for purchasing bitcoin or ether, the two coins the new Binance unit currently lists.
According to a paper by Stanford University researchers recently published in the American Economic Journal, 74 percent of Ugandan households are unbanked. As such, Binance's chief financial officer Wei Zhou told CoinDesk:"They [users] just have to have money within the mobile payment system. They don't have to have bank accounts."
Aside from the local focus, the effort differs from Binance's flagship global trading platform in at least two other notable ways.
While Binance only offers trading of cryptos for other cryptos, its new unit in Uganda is partnering with a local mobile payments provider that will convert fiat to crypto or vice versa. (The partner asked not to be named, due to safety concerns related to managing large quantities of cash.) Unlike its Malta-based parent company, a spokesperson told CoinDesk that Binance Uganda plans to eventually open local bank accounts.
"One of the major issues in the region, in the continent, right now is liquidity and Binance will bring us liquidity," Nairobi-based entrepreneur Marvin Coleby in nearby Kenya, co-trustee of the African Digital Asset Framework, told CoinDesk. "These digital assets can move, borderless, around the continent."
Further, the prospective Ugandan users are still undergoing the know-your-customer (KYC) onboarding process, verifying their government-issued IDs. Binance was historically known for only requiring an email address to trade crypto-to-crypto....