The Case for Crypto with Bundle's Yele Bademosi

February 25, 2021

In this episode, we talk about cryptocurrency with the Co-Founder and CEO of Bundle, and the Founding Partner of Microtraction, Yele Bademosi. Beyond trading and price volatility, what is it about crypto that excites Yele and so many others on the continent?

Throughout the series of episodes, we're exploring the entrepreneurs in start-ups digitizing informal and fragmented industries on the continent. And despite the technological underpinnings of cryptocurrency as a whole, many of the buying and selling processes and use cases of crypto today are still quite informal and fragmented. In this episode, we hear from Yele about the work Bundle is doing to build products and use cases that make crypto more accessible, affordable and help bring it into the mainstream.

For those less familiar with crypto terminology, we have also published a crypto glossary to define many of the terms used in this episode.

[04:21] - First question, on consumer education in largely cash-based economies.

[10:36] - The macro dynamics - such as devaluation of the Nigerian Naira - that help make the case for crypto adoption.

[14:41] - Bundle's origin story and the goals for the business.

[20:22] - An exploration of use cases for crypto beyond trading and speculation.

[26:47] - A conversation on DeFi, or decentralized finance.

[32:42] - On a grand scale, what kind of impact can crypto - and Bundle - have in Africa?

This episode is part of our conversational series sponsored by MFS Africa. MFS Africa's competition is with cash, and throughout this series, we'll feature other startups and entrepreneurs who are digitizing, better organizing, and aggregating analog and fragmented industries.

This episode features:

Episode Artwork by Chileshe Tembo – The Zig

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Transcript

Yele Bademosi [00:13]: Right now, I believe that the goal is to make crypto and blockchain as useful, simple, and inclusive as possible so that every single African is able to use this technology for its full potential.

Justin Norman [00:30]: That's Yele Bademosi, the Co-founder and CEO of Bundle, the social payments app for cashing crypto in Nigeria, and also a Founding Partner of the pre-seed venture fund Microtraction.

Yele Bademosi [00:40]: I think Microsoft were the ones that made this phrase popular in terms of saying a computer in every home. I like to say, a crypto wallet in every African smartphone.

Justin Norman [00:49]: In this episode, Yele and I talk use cases beyond just trading and speculation.

Yele Bademosi [00:53]: When we did a bottom-up calculation and a couple of other research papers that we read, out of the 1.2 billion people, only 1.4 million who use crypto today. Our goal really is about seeing through experimentation and innovation how do we figure that killer use case that takes crypto from a total user base of 1.4 million to 10, 20, 30, 40 million Africans.

Justin Norman [01:18]: Throughout the series of episodes, we're exploring the entrepreneurs in start-ups digitizing informal and fragmented industries on the continent. And despite the technological underpinnings of cryptocurrency as a whole, many of the buying and selling processes and use cases of crypto today are still quite informal and fragmented. In this episode, we hear from Yele about the work Bundle is doing to build products and use cases that make crypto more accessible, affordable and help bring it into the mainstream.

Justin Norman [01:42]: A few housekeeping items before we start. First, it's worth mentioning that this episode was recorded in January 2021 before the Central Bank of Nigeria cracked down on crypto exchanges. The landscape has changed a bit since Yele and I recorded this interview. But you'll hear Yele talk a bit later about governance, and most comments still apply in the context of the CBN's recent actions. Also, just a heads up that this episode gets a jargony. So we added a crypto glossary and link to other resources in the show notes. This episode and in fact all of our podcast episodes contain interactive transcripts that you can view and reference at the theflip.africa/podcast.

Justin Norman [02:18]: And finally, we'd like to thank MFS Africa for their sponsorship of this series of episodes. While a core feature of crypto is its interoperability across markets and currencies, legacy financial and mobile money solutions, maybe not so much. And MFS Africa's API hub makes traditional digital payments interoperable across nearly 30 African countries and over 200 million mobile wallets. Later in the show, Yele talks about cross-border payments as a key use case for crypto. But at present, it's still a less accessible option for many making international money transfers into the continent. And beyond just sending money, there are more nuanced opportunities and use cases on the receiver side of international money transfers. As those building in crypto are working on extensibility, so too is that a focus for those in the traditional money transfer space like Benjamin Fernandes. He's the founder and CEO of NALA, a fintech building a new product to send money from the UK to East Africa.

Benjamin Fernandes [03:09]: We interview our users in the UK and a lot of them tell us, oh yeah, the main thing I'm trying to pay for is health bills. If I could pay for them directly or I try to pay for school fees. If I could pay for them directly, that would really be interesting. A lot of people say, oh yeah, I quote-unquote trust my family but they'd rather just pay their school directly versus trust somebody else that they're going to use it for school fees but then they end up using it for sports betting or something else. And so we see that pattern evolving even more and it always gets me curious like, could you have somebody in the UK pay for their parents' DSTV bill in Nairobi? Could you have somebody pay for the electricity bill for their cousin in Eldoret in Kenya? We're initially just going to start with one-way transfer, but I think there's so much more that you could create utility on for international money transfer that's not been solved today and I'm really excited to see what that looks like over the next five to 10 years.

Justin Norman [03:58] Later on in the show, we'll hear a bit more from Benjamin on the challenges and opportunities in the international money transfer space, especially as it relates to cost. Now, without any further ado, here's Bundle's Yele Bademosi.

VO: You're listening to The Flip. The podcast exploring contextually relevant stories from entrepreneurs around Africa.

Justin Norman [04:21]: I'd love for you to just riff a little bit on high-level Bundle from a business building perspective. I know you've invested heavily in community and you've got this ridiculously active Telegram group. I'm not kidding. I have like a 150,000 unread messages in that. I'll send you a screenshot.

When you’ve not checked @BundleAfrica telegram community in “24 hours” pic.twitter.com/V1nfkK8d0c

— Yele ‘夜雷’ Bademosi 💸 (@YeleBademosi) February 4, 2021

Justin Norman [04:39]: But I think what I'd like to talk about a little bit and focus on is also just the consumer education. And in the context of, we're here on the African continent and it's still largely a cash-based economy. And even just getting people to move from cash to mobile money is a hard enough value proposition in many cases. Then getting people to move from traditional fiat currencies to crypto is I have to imagine just another order of magnitude difficult value proposition. Obviously, there's a lot of crypto fundamentalists and people that really understand and appreciate all the use cases and the speculative opportunities. But how do you go about, in the same way that there's this uphill educational battle for getting merchants, for example, to use M-Pesa, how do you then also likewise get the continent to go one step further, which is to say, yeah, and actually, we're going to use this decentralized currency?

Yele Bademosi [05:36]: Yeah. So, I think there are really two or three overlapping circles, maybe four. With Bundle, we're touching on each of these circles, but we are definitely not there yet. So, the first circle is product, and I'll touch on all these things. So, product, education, community, and the last would probably be many use the word, ease-of-use. So, education is obvious and what we mean by that is, for a lot of people to really begin to understand crypto, you have to be educated for it. And for a lot of us, we take for granted the amount of education needed for truly disruptive things. So, when flying was invented and commercial flight was invented, so much went into explaining how flying works and the fact that it's not as risky as it might seem. The same thing is true for computers, the same thing is true for microwaves. We take all these things for granted because we are now just used to them. For us at Bundle, we keep thinking and saying, okay, how do we create content or how do we educate more people about crypto. I think, when you get educated and you understand how it works and the use case or why you exist, then there's a higher chance of you now converting to a truly active user.

Yele Bademosi [07:12]: The second thing... the other concentric circle is the product itself. People want utility, they want usefulness. And today, majority of the use cases are not so applicable to everyone and we have to figure out what that looks like. So, it's like, with the personal computers, they've been around for a very long time but actually what made the PC take off was the web browser. The web browser and the internet made the PC a lot more, blew up the size of the market. Before then, nobody was really buying PCs in their house. Maybe there were a couple of games that you could play, but there wasn't a lot of use cases that people really wanted that made them say, oh, I'm going to go out to get a personal computer at home. But when the early days of the internet where these multi-player games, messaging and message boards, and the eventual internet with Netscape, that's what made it really, really grow. So, for us, we as builders in crypto have to figure out, what is that use case that takes crypto mainstream? And we're still figuring that at Bundle but we're fortunate to have a profitable business and we have the funds to figure this out.

Yele Bademosi [08:40]: The next thing is, in my opinion, extracting ease-of-use or extracting the layers of complexity. I use the analogy of a car. Almost everybody can get into of a car and say, "Okay, this will get me from A to B", but a smaller subset of every passenger or anyone that can be a passenger are drivers. So they know how to drive a car. Then a smaller subset of drivers know how to repair a car. And then even smaller subset can build and can design and build a car. So, right now, it sometimes feels as if with crypto, we're trying to make everybody builders and creators of cars or maybe some that repairs cars and understanding the intricate detail and complexity about how this works when for most people they just car about, does this solve my problem and can I use it really easily? So, with Bundle, we've tried to do a good extracting away the complexities of crypto.

Yele Bademosi [09:42]: And then the final thing is community itself. Now, community can be mentioned like the Telegram group that we have and that's not just one aspect of way we think about community, but community can be people that you know, your immediate family and friends who can help you get onboarded and started with crypto. And community can be people that just have mutual and shared interest with each other. And so that Telegram group of 8000-plus people is essentially a community of people who interested in crypto who want to learn and figure out how to use crypto and trade and make money. I think those concentric circles are what is really important in driving home the adoption and use cases and growth for crypto across Africa and the world globally.

Justin Norman [10:36]: Definitely. Maybe this is common knowledge by now, but the case for crypto, the case for Bitcoin, how you got into this space, why it's an acute issue in a place like Nigeria with Naira devaluation. Can we just talk about that from a high level before we get into Bundle specifically?

Yele Bademosi [10:53]: Yeah. So, I think I would first start with how I got into crypto and Bitcoin. And I think like most people, I got joined by the volatility. So, this was 2017, a bunch of the prices were going up, and I noticed around that time that a bunch of investors that I followed on Twitter were all talking about Bitcoin and crypto and blockchain. Whilst I started trading crypto, I remember a tweet from Naval, this tweetstorm about how... It was a very high-level tweetstorm about the role that blockchains can play in the world in terms of coordination of individuals and self-sovereignty. And that really drew me in.

1/ Blockchains will replace networks with markets.

— Naval (@naval) June 21, 2017

Yele Bademosi [11:38]: That drew me in because I always say that my personal mission is about, how to accelerate Africa's transition to a developed economy? And right now, you can't really do that without governance. And so the idea that you could apply technology to governance was pretty interesting for me. So, that's not what really brought me into this space. I became really, really drawn in and I was really interested in this idea of crypto being fintech 2.0.

Yele Bademosi [12:10]: So, at this point, I had made a bunch of investments into a variety of fintech companies like Wallets Africa, Cowrywise, and even crypto companies like BuyCoins, and it was really interesting to begin to view crypto as the next evolution of financial services that were much better. And I like to use this analogy of telecom networks. So, fintech as is is like 2G or 3G, and crypto itself is the next evolution or the next iteration, and that is more of a 4G or even a 5G network. And so, the idea of building financial services that were natively interoperable, that are decentralized, that didn't discriminate based on your geographical location was a really, really powerful thing for me.

Yele Bademosi [13:07]: Actually, when you consider some of the macro factors that you have in Nigeria and other African countries such as a devaluing currency, lack of investment opportunities in the stock market, inflation rates being double-digit, middle double digits, treasury bills returning, I think over the last three years has dropped down from as high as 17, 18% to now being -0.5%. And also the lack of USD liquidity which impacts the exchange rates between Naira and the US Dollar. So, the idea of crypto being this alternative settlement currency, alternative to USD for cross-border transactions as well as an investment class that has outperformed the stock market and you didn't need to be in the US or Europe or any other developed economy to get access to that access class, all you needed was just your smartphone and an internet connection, that was an extremely powerful idea. So, right now, I believe that the goal is to make crypto and blockchain as useful, simple, and inclusive as possible so that every single African is able to use this technology for its full potential. I think Microsoft were the ones that made this phrase popular in terms of seeing a computer in every home. I like to say, "A crypto wallet in African smartphone". That is our vision and our goal through the work we're trying to do with Bundle.

Justin Norman [14:41]: Yeah. I like that. It's interesting, you mentioned BuyCoins just before, which is a Microtraction portfolio company. And so I'd love to then fast forward a little bit to Bundle's origins and the business and the use case, why it got started. And I also think it's just interesting in the context of your work at Microtraction that there's BuyCoins, an exchange and just being able to formalize the acquisition and on-ramping into crypto. And maybe you can also talk a little bit about peer-to-peer exchanges. And I read an article in Quartz [ed.: it was actually an article in Stears] that was saying that hundreds of millions of dollars, I believe, as much as that is traded via WhatsApp and other informal peer-to-peer networks. So, I'd love for you to talk about Bundle in that context especially just to your point, just making it easier for Africans to hold crypto in their wallets.

Yele Bademosi [15:33]: So, when I made my investment into BuyCoins at the time was actually quite difficult for anyone to get started with crypto. Interestingly enough, crypto itself is a very peer-to-peer decentralized network and similar to what you have in terms of the FX market where you have informal or peer-to-peer exchanges between the USD and Naira or GBP and Naira and this is done over WhatsApp, WhatsApp groups, Telegram groups, really informal methods of exchange where trust is created because of a face and an administrator. That was what was status quo. So, you had the Telegram, WhatsApp groups on one hand, and they also had this peer-to-peer Bitcoin or crypto marketplaces which reminded me of Craigslist. So, a Craigslist for crypto where users would go and post the price, and it was just very disorganized but actually quite robust and decentralized where people were transacting with crypto. But that exposed people to a lot of scams. Because it's a peer-to-peer exchange or trade, you need to trust that the counterparty is going to do what they say they're going to do and typically, the resolution period when something goes wrong can be very long and the process very painful.

Yele Bademosi [17:03]: So, with the thesis for investing in BuyCoins was, how do you build a Coinbase for Africa in a manner that makes it very easy for people to buy crypto. And over the next two, two and half years, I was fortunate to join Binance as the Director of Binance Labs and lead a bunch of investments into African cryptocurrency projects who invested in Bitsika which was also a very easy to use crypto wallet. Invested in Xend and Yellow Card as well. In fact, Yellow Card is pretty cool because they actually allowed people to go from cash into crypto. So you could go to a mobile agent, go to a shop or a store, give them physical cash and they will give you Bitcoin, which I thought was pretty interesting. But there's a huge opportunity to formalize this informal way that individuals on the continent have been transacting with crypto. So, actually, apart from maybe Nigeria, Kenya, Ghana, and few other African countries, the way people actually transact with crypto today is still primarily this informal, peer-to-peer, WhatsApp trading, WhatsApp or Telegram trading, or any of the peer-to-peer marketplaces for crypto. So, there's still tremendous opportunity for entrepreneurs across Africa to build these products that make it simple for people to on-ramp or off-ramp.

Yele Bademosi [18:30]: With Bundle specifically, our goal is about building a product that figures out use cases for crypto in a way that has mainstream adoption potential. And what I mean by that is the difference between us being a pure exchange play is that we care a lot about the number of users as opposed to our transaction volume. So, when I was thinking about the investments I made and the things that I've done in this space, and the data that I had from a variety of exchanges that I know, when we did a bottom-up calculation and a couple of other research papers that we read, out of over a billion people, 1.2 billion people, only 1.4 million people use crypto today and that for me is a huge problem that needs to be solved for, which is the awareness level for crypto is actually really high, but because people don't have easy ways to acquire and even use cases for it beyond speculation, then the number of overall users is still relatively low. And so for Bundle, our goal is to figure out, we don't know the answer, we don't have the answers... So I'd like to think of us as a R&D company whilst also being a startup. Our goal is really is about seeing experimentation and innovation, how do we figure out that killer use case that takes crypto from a total userbase of 1.4 million to 10, 20, 30, 40 million Africans. And that's what drives us every day.

Justin Norman [20:22]: Yeah. And I'd love to get deeper in the segmentation of this conversation because obviously the primary use case today is speculation and investment and that's what exchanges can enable you to do. But from a use case perspective, the bear case is like who's using any crypto or Bitcoin to buy something, or who's sending money to their friends using Bitcoin instead of using fiat. And it's interesting as we record this conversation now, just this month or maybe it was last month, a professional football player in the US is now getting paid in Bitcoin. And I think didn't Elon tweet something about like I'm only going to get paid in Bitcoin moving forward or something like that. But what are your initial hypotheses around use cases and how people will get paid in crypto or will utilize crypto for services or micropayments? I don't know. What kinds of things are you thinking about today?

Yele Bademosi [21:17]: I think for a lot of crypto OGs, they see cryptocurrency or the initial idea was an alternative means of payments, like a currency that could rival cash. Personally, I just see cryptocurrency as decentralized store... decentralized money. And money had three key utility points. One is a medium of exchange. That is, I'm able to give you this thing and you give me something else in return even if you're not doing a barter-like exchange. I'm not saying, oh, I have an iPhone, I'll exchange you for your MacBook. It's like, you have an iPhone, I'll give you this amount of value that you can then use in the future to buy something else. So, that's number one, medium of exchange.

Yele Bademosi [22:11]: Number two is the unit of accounts which is being able to give something of value against a relatively stable asset. And so, from a crypto perspective, it's quite difficult to use crypto as a unit of account, even though you can fulfill that use case, because the price changes quite frequently. But I think that is more of a feature as opposed to a bug. And then the last one is a store of value. And right now, that is the biggest use case for crypto for a lot of people. If you gave someone $100 and that person converted theirs to Naira 10 years ago and I took that $100 and I converted mine to Bitcoin. If you looked at the value in dollars 10 years later, even five years later, three years later, you will see that Bitcoin outperformed Naira as a store of value and outperformed almost every single asset faster you can beat. So, I think that Bitcoin and other cryptoassets that today serve that kind of use case as some alternative currency.

Yele Bademosi [23:18]: Now, in terms of in Africa, what are the use cases we see. And to be honest, it's not that different from the rest of the world. The biggest use case in Africa today is from a volume... So, I'll divide it into two things. From a volume perspective, I think that it is for cross-border payments. For a lot of people, if you're in an African country, you want to send money out, if you're in a country where there is a lack of liquidity of USD because you don't really have a lot of foreign reserve of USD, then it can become very difficult to move in between these currencies. But Bitcoin has been able to create a decentralized pool of liquidity across various African currencies which now makes it easy for you to move from NGN or GHS into whatever settlement or end-state currency that you want to move into. So in a way, for a lot of people in Africa, Bitcoin is fast becoming an alternative to USD when it comes to cross-border payments. If you're outside of Africa, you want to move money to Africa, Bitcoin and other cryptocurrencies is actually a lot better, primarily because the exchange rate at which you convert your Bitcoin to local currency tends to be better than what the traditional Transferwise or MoneyGram and the likes will do, with often minimal fees. So, in a way, that is probably one of the biggest case for crypto in Africa today.

Yele Bademosi [24:52]: The second one which a lot of people with as an investment asset class, I think the only asset that has outperformed Bitcoin and most cryptocurrencies has been the Tesla stock. They had a crazy 2020. But over an extended period of time, talking, let's say, five, six, seven years, nothing has out-performed Bitcoin. I think Bitcoin has had just two down years over the last 10 years. So, for a lot of people, especially young people, they actually attracted the volatility because if you had to invest in treasury bills, you would earn single-digit returns, maybe even negative-digit returns on your local fiat. So that is Naira or Cedis or the Rand or whatever currency you're looking at. But in crypto, yes you have some days when does 15% and 20% losses. Even those are not are frequent. But you also have days when over extended period of time, there's a good value in price. So, it ends up being a very good asset class for you invest in if you are someone that is comfortable with risk and has a long-term mindset. So, I think those are the two big use cases.

Yele Bademosi [26:05]: And then the final one is people who can't get access to dollars but can buy a stablecoin with their local fiat are now buying stablecoins, cryptoassets as an alternative to actually having USD. Plus over the last 18 months, there's been a rise of DeFi which now allows you to generate returns on your crypto USD savings. And these savings can range from anyone from 7% to 40% depending on what protocol you're looking at. And I think those are powerful utility of crypto that no one really talks about. So yes, pretty exciting, I think, and all this in the last three to four years.

Justin Norman [26:47]: Yeah. Can we talk a little bit about DeFi, in particular? Earlier in this conversation, you talked about the lack of equity markets or not very strong equity markets in emerging markets in particular and the way in which a decentralized trading platform, for example, can give access to US investment opportunities, for example, for much cheaper. Is that something that Bundle is also thinking about or how do you think about DeFi in tokenization as an evolution of product and use cases for Bundle?

Yele Bademosi [27:16]: I think DeFi is extremely interesting. There's been true innovation within DeFi. So for Bundle, there are a bunch of ideas that we have. I remember when I first got into crypto, I was very big on security tokens because obviously as an investor I remember thinking that I think it's crazy is that you can give $15,000 to 200 young entrepreneurs who are trying to build a startup, and that's because you couldn't really raise the fund to do something like that. But you look at the amount of money that had gone into crypto, and the people that made wealth from crypto, and you wonder if there's an opportunity to connect liquidity providers to these types of projects.

Yele Bademosi [28:06]: And so, Bundle recently released a token called BXD and some of the future ideas that we have around BXD is actually around making it very easy for entrepreneurs across Africa to leverage BXD and the DeFi products that we'll build that will make it easy for them to get access to capital from a global pool and also issue their own tokens, as well. Especially because we now have a decent amount of users that are also now active. But this probably like 12-months-plus out. But I think DeFi has shown... DeFi and especially the DEXs, DEXs are decentralized exchange, and AMM, so, it's automated market makers. They've shown us a way to incentivize liquidity providers on a global scale not dissimilar to the way ICOs were able to attract a community of financial contributors from across the world towards particular projects.

Yele Bademosi [29:12]: Uniswap which is probably one of the most successful DEXs in the world, if someone told me 18 months ago that Uniswap would have volumes that would rival... or a DEX, any DEX would have volumes that would rival the 24-hour trading volumes on something like Coinbase, and some of the popular exchanges, I'll have been like you were kidding because at that time, most DEXs had maybe percent or two or maximum 5% of what centralized exchanges were doing. And that was because of the innovation around how they were able to build a protocol that incentivizes third parties to provide liquidity and that drew people to now trade on these decentralized exchanges. That in itself is probably the single most innovative primitive for crypto in the last 12 months.

Justin Norman [30:04]: Just one question maybe for clarification even as we talk about the evolution of these opportunities. You mentioned decentralized exchanges versus Coinbase and the benefit for liquidity providers but is the primary use case for just your average speculator also that it's just cheaper or what's the sort of reason why they use a decentralized exchange versus Coinbase for example.

Yele Bademosi [30:29]: So, I think it's two things. So, one is that with DeFi... One of the big innovations for something at Binance, and I'm not speaking on behalf of Binance, but I think one of the things that made Binance quite successful was that they had more assets listed than something like Coinbase, who were very slow at listing at the time. So, with decentralized exchanges, the big innovation for a lot of them is that no one controls what gets listed. Now, that's a good and a bad thing. That's a good thing because it means any project had the potential to be able to raise capital to build out some kind of innovation, but it's also a bad thing because there's no way to verify whether something is a scam or if there will be any kind of product being delivered and all that kind of stuff.

Yele Bademosi [31:21]: So, I think for a lot of people, a lot of people are drawn to the idea of just a decentralized way of exchanging value without trusting the middle man. Again, that is the first goal of something like Bitcoin. So, with Bitcoin, I can send you value without needing to go through an intermediary as a bank. With crypto exchanges and live exchanges, I can move between crypto to crypto but I have to go through an intermediary. So the exchanges are like the new "banks". With a DEX, you've taken away the middle man because there is no middle man. You are trusting the protocol and code as opposed to an organization or an individual. So for a lot of people who are crypto fundamentalists and true to the founding ethos of decentralization and crypto, that is what gets them excited. For another group of people, it's just the volatility. But again, I've always said that crypto volatility, in my opinion, is a feature, not a bug. A lot of people get drawn into crypto because of the volatility and the hope that it can make huge gains, but then as they learn and they are like, wow, this is quite interesting and they now stay for the long term.

Justin Norman [32:42]: Yeah. So, you talked a lot about this admittance that the use cases still remain to be seen and you're taking this very experimental product-like approach to understanding your customers and what the use cases might be. I'd love just to get your perspective on, what kind of future do you hope to build as it relates to crypto and payments globally? I know it's abstract, but is there something, with intention, that you're hoping to get to through Bundle and the work that you're doing in the next five years, 10 years, 20 years, whatever?

Yele Bademosi [33:14]: So, I remember this stat that came out a few years ago. In Nigeria, only 95% of bank accounts have less than 500,000 Naira in them. That's about less than $1000. So, there about 41 million people in Nigeria, and only 5% of that have above $1000. DFS Lab recently put out a great blog post that counted the number of people that can spend above $10 a day. And that was really interesting for me because it just shows the level of, in my opinion, poverty in Africa. But the world is becoming a global village. And what I mean by that is, the internet has made it possible for people to work remotely. With Bundle, there are people that work at Bundle that I've still not met to date, and it's crazy that the internet allows us to coordinate and work together even if we're not next to each other. And why that is important is it now means that as opposed to us being a continent that exports raw goods and commodities, we now have our biggest capital is human capital, and our human resource.

Yele Bademosi [34:35]: And the beauty about human capital is that we have the same standard distribution as the rest of the world. So, when you have a population of over a billion people, given the right opportunities and access to information, you have people that have tremendous earning potentials. And so something like corona that forced the world to work remotely is probably going to be one the biggest turning points that would make companies globally realize that actually, I don't need to hire this person in my home town, I can hire someone globally in Africa and pay them what would be a massive step up in their earnings in the markets that they live in. So, I think about this as export services. The big barrier we have with crypto was how do you send value to those people? And crypto solves that. If you sent me your crypto wallet address now, I can send you BUSD and you will get that equivalent in Dollars in seconds. And you could go to Binance in South Africa and convert that to Rand, or if you had a Binance card, you could spend that money immediately from your Binance card.

Yele Bademosi [35:46]: So, the way I think about it is that if we do the right things with crypto, it allows us... The internet will solve accessibility of quality information. Crypto solves access to financial services and being able to move value cheaply regardless of your location. And some of the broad, longer term ideas is about building certifications on the blockchain that are verifiable based off the work someone has done. So, today if you get a new job or you want to apply for a new job it's like, send me your CV. But imagine if, let's say, when you're working at, let's say, Bundle, every time I do my peer-to-peer feedback and I give you that review and I give you rating score, that feedback and that score gets imputed on a blockchain that your future employer can access based of me giving them permission to view that. And you can verify that, oh, Yele Bademosi with Twitter profile, LinkedIn and all these other stuff might have some kind of score for you to now attest that these people they want to employ is actually a really good candidate.

Yele Bademosi [36:59]: So, I think there is something there about using these technologies to connect Africans, young Africans, to global economic opportunities. And that is how we lift our continent out of poverty. It's not going to be because we have agriculture or we have factories. The mistake that economics tend to make is that they compare, they look at what made a particular economy move out of poverty and think that the next economy is going to use the same strategy. But it's never really the same thing. So right now, we are in the information age. We are also in a decentralized age where the internet connects us together. And then you have means of attesting quality of skill as well as ways to pay anyone globally.

Yele Bademosi [37:48]: I believe that when crypto is successful, and we hope we play a huge role in that, is the millions of users on Bundle in the future will be connected to a global marketplace and they'll be earning wages that they deserve, not because they are in Africa, but because they actually have the skills and the ability to provide world-class work. So, success to me is your geographical location should not determine your future economic prospects. And today, without crypto, that is the case. So that is what gets me excited. That's what makes me want to make crypto mainstream in Africa because I think that is how we lift millions of people out of poverty.

Justin Norman [38:46]: Thanks again to MFS Africa for the sponsorship of this series of episodes. Earlier in the show, we heard from NALA's Benjamin Fernandes on the opportunities in the international money transfer space. Africa's the most expensive continent to send money to, and we talked about why that is and why that's an opportunity for local, in-market startups like NALA.

Benjamin Fernandes [39:04]: According to the World Bank in 2018, about $48 billion were sent to Sub-Saharan Africa. And what's crazy is from that 48 billion, 80% of those transactions still happen at physical stores. So even with the likes of TransferWise, WorldRemit, all these large global digital money transfer players, still 80% of them happen through physical stores. And because they are happening through at physical stores, also the average cost is much higher. There's multiple things people have to account for, this physical store, there's rent, there's having a human person there. And then for us, for example, there's KYC, there's a collections partners, there's a payout partner, there's anti-money laundering scanning that we have to do. And so across that just to Africa that's one of the reasons why it's super expensive. For us, because we have so much experience with mobile money and mobile payments from previous stuff we've built up historically in the region, we can do things for a lot less. We help reduce that cost over time because of some of the things that we've done. Now, do you expect a TransferWise to build out local infrastructure in Africa, maybe not today, but who knows? But that's the opportunity we see. There is still quite a bit that needs to get done. And especially if only 20% of that is digital today and if you focus and do something really well, I think there's still a massive opportunity that's available.

Justin Norman: That's it for this week's episode of The Flip. Next week, we had to Francophone West Africa to talk local content and media. See you then.