Africa: Bitcoin is an opportunity to transfer money

One of the largest and poorest townships of South Africa, Khayelitsha, is telling the world the most important use case of Bitcoin, according to a new CNBC documentary that is exploring the nuances of this emerging market. Though it is widely criticized as a speculative investment in the western world, Bitcoin is making life easier in poor and unbanked communities of the nation. The documentary follows an Uber driver in Zimbabwe, living in Cape Town, who describes his experiences when transferring money.

The driver, Kuda Kwashe, told the team that he has only three ways to transfer money to his family. The first method is bank transfer, which takes days or weeks to complete. Kwashe even says, “sometimes the banks didn’t have the money.” His second option is to use a wiring service, which transfers money quickly but charges a hefty 10 percent fee for the same. A third option is to talk to a bus driver going from Cape Town to Zimbabwe and hand him the money, hoping that the bus will not get delayed or robbed and that the driver will be honest enough to give the money to his family.

In emerging markets like South Africa, communities could be very poor and unbanked, and they could be exploited by some traditional financial institutions as well. In this case, Bitcoin offers a low-fee and quick and easy way to transfer money. As the network is borderless and there are no central banks or third parties involved, the value is transferred without issue.

As people in poor townships like Khayelitsha are becoming more aware of blockchain technology and digital currencies, they are finding a method to send and receive money that is inexpensive and secure.