A sculpture of a giant tap spitting out plastic waste greeted delegates to the UN environment talks in Kenya earlier this year – a reminder of the urgent need for them to agree a global pact to reduce pollution plastic.
The 30-foot-tall sculpture was constructed from waste collected from Nairobi’s Kibera slum by artist and activist Benjamin Von Wong, who raised funds for the project by selling non-fungible tokens (NFTs), records of digital images purchased with cryptocurrency.
Von Wong – along with activist Casson Trenor and the Degenerate Trash Pandas, an NFT community that campaigns against plastics with the Solana cryptocurrency – has raised around $110,000 for the facility which has also provided work for around 100 young people from Kibera.
“Fundraising through cryptocurrency was something new for us,” said Byrones Khainga, director of technical services at Human Needs Project, a Kibera nonprofit that helped with the setup.
“But this will now inform how we implement our social protection activities, because we have seen how quickly we can move forward in fundraising,” said Khainga, whose nonprofit organization is based. tackles issues in Kibera such as garbage disposal and access to clean water.
The project is one of many examples of cryptocurrency and NFTs being used in African countries to fund welfare and development projects related to education, electricity, healthcare, housing and livelihoods.
Fundraising for crypto has picked up as traditional funding channels dried up in the wake of the coronavirus pandemic and due to economic downturns, said Roselyne Wanjiru, a researcher at the Blockchain Association of Kenya, an industry body.
“Crypto lowers barriers to entry and is a quick way to raise money for social causes because it’s easier to navigate than traditional financial systems,” Wanjiru said.
“We are seeing more and more businesses and individuals using it to bring solutions to communities.”
Cryptocurrencies were designed to be free from central financial authorities such as governments and central banks. They allow “peer-to-peer” transfers between online users without any intermediary.
Their relative anonymity also offers sanctuary to criminals, extremist groups and sanctioned governments, but champions say they help support marginalized groups and those caught in crises, even as a sharp drop in values hurts many. users.
According to the United Nations trade agency, UNCTAD, payments and remittances via crypto are increasing in Kenya, Nigeria and South Africa, which hold one of the highest shares of crypto ownership among country of the world.
Around 8.5% of Kenya’s 56 million people own crypto, UNCTAD said, while the Central African Republic adopted bitcoin as its official currency in April.
Virtual coins that use the same underlying blockchain technology as cryptocurrency are also used in Kenya, such as sarafu – which means currency in Kiswahili – which is issued by the non-profit Grassroots Economics Foundation.
The community currency helps more than 50,000 poor residents who do not have access to bank loans to pay for essentials such as food, healthcare and housing.
Also in Kenya, the Celo Foundation and Mercy Corps Ventures launched a microwork pilot project this year, enabling hundreds of young people to access digital jobs and pay for them with Celo dollars, a stablecoin that tracks the value of the US dollar.
Microwork is a form of digital work that breaks large projects down into hundreds of smaller tasks that can be done on a mobile phone in minutes. In several African countries, more women than men are microworkers because they can work from home.
But paying workers on time is a challenge, with cross-border payments often slow and costly, with high transaction fees.
With Celo dollars, workers can get paid immediately, with much lower fees. At the end of a task, the payment is transferred to their digital wallet and they can withdraw the Celo dollars to M-Pesa, Kenya’s popular mobile money platform.
While stablecoins are considered less risky than other cryptocurrencies, users may be affected by volatility if they hold onto them, rather than withdrawing them immediately, experts say.
Cryptocurrencies can boost financial inclusion by creating new digital job opportunities and reducing the cost of cross-border payments, said Scott Onder, senior managing director of Mercy Corps Ventures, the venture capital arm of the global development agency Mercy Corps.
“Cryptocurrency removes this costly barrier and has the potential to create new ways for young people to earn, spend, save and send money,” he said in a statement.
Power, Internet shortcomings
Reliable access to electricity and the internet are among the challenges to using digital coins in Africa, and most users are still men, an imbalance that mimics unequal access to traditional finance.
Kenyan choreographer Big Mich, who trains slum youth, including girls, to develop and market their dance skills, aims to change that: she plans to sell her dance moves as NFTs and use the funds to benefit poor communities.
“There are concerns that crypto mining could contribute to global warming due to the huge amount of energy it consumes. But we shouldn’t overlook the good things this technology can bring us,” she said.
In the Kibera slum, funds raised through the sale of NFTs are also helping to create hundreds of permanent jobs, Von Wong said.
“NFT communities can be harnessed as a major force for good, filling a major gap in development efforts around the world,” he said.
“Anything that helps to more easily get capital faster and more cheaply to those who need it is always a good thing.” —Thomson Reuters Foundation