Starting in February, Coinbase users in 20 African countries can buy USDC directly from the Coinbase Wallet App.
Coinbase, the American crypto company, has partnered with pan-African exchange Yellow Card to allow African consumers better access to the former’s products. Despite Coinbase’s popularity, African users cannot buy or sell crypto via its applications; their access is limited to sending and receiving.
Quick facts
- Starting in February, Coinbase Wallet users in the 20 African countries where Yellow Card operates can buy bitcoin and USDC directly from the Coinbase Wallet application.
- This is possible through the new Yellow Card Widget, a payment API integrated into the Coinbase Wallet.
- Accordingto a Coinbase press release, users can send USDC without fees through email and other messaging apps like WhatsApp, Telegram and iMessage.
- In December, the United States-based company rolled out a send-via-link feature that allows CoinBase Wallet users to send money to anyone globally.
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Be smart: Coinbase Wallet is the American company’s self-custody crypto wallet product. Two other popular self-custody wallet applications include MetaMask and Trust Wallet.
- The 20 countries involved include Nigeria, South Africa, Botswana, Ghana, Kenya, and Tanzania.
The scoop
- Yellow Card CEO Chris Maurice told Mariblock that the partnership essentially means Coinbases would use its rails to serve African customers.
“If you’re a Nigerian using Coinbase Wallet and you want USDC, you’ll be able to on-ramp into it using NGN, with [Yellow Card] YC powering the on/off ramps to/from African fiats across all 20 countries we currently support,” he said in a chat with Mariblock.
- Maurice confirmed to Mariblock that the Coinbase partnership is similar to the one it inked with Moonpay last year.
- In addition, the current partnership is limited to Coinbase Wallet, the self-custody wallet. It doesn’t extend to the American company’s centralized wallet platform.
Key quote
- The Coinbase press release reads:
“Many of these countries are high-inflation and remittance-dependent. This partnership, with its emphasis on USDC, will increase economic freedom in places that have lacked it, and help stand up a modern financial system where one hasn’t existed.”
Why it matters
Cross-border transactions to Sub-Saharan Africa still incur heavy transaction fees of 8.4% on average, accordingto the World Bank.
- The Coinbase-Yellow Card partnership is yet another attempt to bring affordable remittances to Africans via crypto, which continues to be tipped as a tool for cheaper remittances.
- In a 2023 working paper, the Bank of International Settlements (BIS)suggeststhat a trust deficit between parties poses a significant barrier to effective cross-border payment mechanisms.
- The body highlighted solutions built around cryptocurrencies and central bank digital currencies (CBDC) as possible solutions to these problems.
Like Coinbase, various crypto companies have sprung up over the years to build digital remittance solutions that typically do not need intermediaries or third-party structures.
- Last year,Yellow Card partnered with Jack Dorsey’s Block to facilitate cross-border transactions across 16 African countries.
- Yellow Card integrated Block’s open-source protocol, tbDEX, which bridges fiat currencies and cryptocurrencies without needing third-party structures to establish trust.
