XRP Mentioned in UN Paper on Crypto in Africa: Details
Community-managed account of XRP enthusiast @WKahneman shared the highlights of the latest report on cryptocurrency's prospects in Africa, made by the United Nations Development Programme team.
XRP can fuel new-gen payments services in Africa, UN report says
The United Nations Development Programme (UNDP), a UN organization focused on supporting countries and communities in combating poverty, shared its Cryptocurrency in Africa: Alternative Opportunities for Advancing the Sustainable Development Goals? paper. XRP token and Ripple Inc. remittances solutions are mentioned as useful instruments.
A report this Jan by the UN, "Cryptocurrencies in Africa." Speaks of BTC, stablecoins generally, smartcontracts (inc. ETH) but has a decent passage noting $XRP regarding xborder payments. Suggests derivatives to offset volatility. Take a look:
— WrathofKahneman (@WKahneman) January 18, 2023
1/2https://t.co/NhwIII0VPz pic.twitter.com/LWYLbRS5T7
Authors of the thesis analyzed one use-case for XRP, i.e., using the token in payment corridors for low-cost and nearly instant remittances. Per the text, XRP can bridge two local fiat currencies in a cost-efficient manner.
Through Ripple's Line of Credit (LoC) service, a conversion between the two currencies can be organized at a locked-in exchange rate. Then, the parties can repay the credit on a convenient schedule.
At the same time, since XRP is an altcoin not pegged to fiat currencies, the problem of volatility is inevitable when using it in cross-border remittances. As such, XRP should be hedged by additional financial instruments.
Investments, trust and regulation needed for crypto adoption in sub-Saharan Africa
The authors of the thesis proposed to experiment with industry-scale cryptocurrency derivatives services to let the payment processors protect their capital against volatility spikes.
Also, some recommendations for nation-states in the UNDP paper include supporting local cryptocurrency products, building clear regulatory frameworks and increasing trust in digital assets as payment instruments and as a way of investing.
As covered by U.Today previously, Ripple Inc. strengthens its presence in Africa. In December 2022, its partner started providing remittances from 19 African states to Europe.
Tomiwabold OlajideNala, a Tanzanian fintech company, provides the technical basis for this development.
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