Sub-Saharan Africa is a key region for Swiss foreign policyExternal link and digitisation will play a major role in that strategy. To this end, “Crypto Nation” Switzerland is throwing its weight behind a public-private partnership to find blockchain solutions to some of the challenges facing the continent.
This content was published on July 13, 2021 – 17:20
The success of the M-Pesa mobile phone payment scheme in Kenya, and now other countries, demonstrates how digital innovation can overcome infrastructure deficiencies. The Swiss project Monetas tried unsuccessfully to introduce a distributed ledger technology (DLT) banking system to Tunisia a few years back.
But where that project failed, perhaps some home-grown innovations can succeed. That’s why the Swiss State Secretariat for Economic Affairs (Seco) is helping the blockchain business incubator Crypto Valley Venture Capital (CV VC) to set up an office in South Africa.
“Blockchain solutions offer promising fields of application for development cooperation, for example in the areas of financial inclusion by offering better and cheaper products and services for the general public,” Seco told me. “Blockchain solutions are also used in value chains or in the energy sector.”
CV VC will spread its net wide to find and fund the best blockchain start-ups in South Africa, Nigeria, Kenya, Rwanda, Congo and other countries. The incubator will invest $125,000 (CHF114,000) in each of the initial five successful applicants, with Seco contributing CHF250,000 in the first year of the project.
“This start-up funding is intended to show that investments in African start-ups that develop blockchain-based solutions for the challenges on the African continent are worthwhile,” says Seco. “This positive demonstration could mobilise further private capital and generate jobs.”
This has been demonstrated in Dubai where another CV VC hub has recently attracted CHF13 million in extra investment capital.
The African projects must demonstrate how blockchain can help solve challenges specific to the region, says CV VC South Africa hub managing director Gideon Greaves. For example: “There are a lot of immigrants in South Africa from neighbouring countries who send money home to support their families,” Greaves says. “A lack of financial infrastructure does not make it easy to send these remittances.”
In addition to the incubation project, the Swiss embassy and the University of Zurich will establish a blockchain chair at the University of Johannesburg, part financed by both Switzerland and South Africa.
The collaboration is an example of how the self-styled “Crypto Nation” Switzerland can spread its influence around the world. Switzerland is currently home to nearly 1,000 blockchain start-ups, supporting around 5,000 jobs. It’s been boosted this year by the upgrade of company and financial laws to integrate DLT and digital assets into the economy.
On Thursday, I will be moderating an event staged by CV VC/CV Labs and supported by the Swiss Blockchain FederationExternal link that will examine the scope and depth of the digital assets industry in Switzerland. Businessman and Zurich politician Alexander E Brunner has researched the Swiss Digital Asset and Wealth Management report that demonstrates Switzerland’s ambitions to become a global hub for the industry.
I hope you can tune in and join me.