Japanese Banking Giant SBI Group Opens Blockchain-Based Payment Gateway to Africa

  • Banking group’s money transfer division leverages bitcoin blockchain to enable nearly half a million users send money to Africa in partnership with BitPesa.
  • SBI has extensive prior record of engaging blockchain technology to explore cross-border money transfer possibilities

SBI Remit, the money transfer division of Japanese financial services company SBI Group is partnering with BitPesa to turn the bitcoin blockchain into an enterprise rail that permits its half a million users to send money cheaply and quickly to Africa.

Previously money transfers from Japan to Africa depended on a complex web of banks and middlemen moving yen into U.S. dollars or euros, and then into the relevant African currency of the recipient - with over 40 currencies presently in use across the continent. Using

Through BitPesa’s framework, which uses the bitcoin blockchain in conjunction with other services to create new high-speed trading pairs, SBI Remit will be able to offer relatively fast transfers at much reduced rates than previously obtainable.

BitPesa’s Revolutionary African Remittance Technology

Where prior money transfer protocols required wait times of anything from 24 hours to seven days, BitPesa’s bitcoin rail framework enables remittances to be settled in as little as one hour. According to SBI Remit director Nobuo Ando, BitPesa’s possession of multiple international licenses will substantially aid African commerce and trade with Japan by adding an important layer of accountability and transparency.

Commenting on the existing situation of remittances to Africa, he said:

Many companies are doing trade with African countries and they are suffering from the high cost and the slow speed and not very precise administration. So this is the market that we would like to go in, together with Bitpesa.

By utilising BitPesa’s bitcoin-based treasury tools, SBI hopes to key into a lucrative seam of Japan-Africa trade which includes cosmetics, electronics and used cars. The partnership will for the first time provide direct currency pairs between the yen and the national currencies of Nigeria, Ghana, Morocco, Kenya, Senegal, Tanzania, Uganda and the DRC.

Previously, the cost of remittances averaged about 7 percent of the transaction value, but often added up to much more, with long wait times and unreliable service. After removing middlemen from the process using BitPesa’s tools, this comes down to about 3 percent of the transaction value, with the added bonus of being immutable, reliable and relatively fast.

SBI’s Blockchain Technology Quest

While SBI may be a first-time bitcoin user under this partnership, the company has a well-documented interest in using blockchains and cryptocurrencies to aid cross-border payments.

In 2016, the company partnered with XRP founding company Ripple to form SBI Ripple Asia, a payments-focused organisation helping banks in Asia to execute real-time cross-border transactions at relatively low costs. Earlier this year, it launched a 50 billion yen fund to support blockchain development and artificial intelligence startups over the next ten years.

Forbes reports that SBI Group has investment positions in 20 digital assets companies including bitFlyer, Templum, R3, coolBitX, Veem and its native crypto exchange SBI Virtual Currencies.

Think Twice Before Agreeing to Cryptocurrency Salary Payments

Neil Dennis

As an increasing number of employees choose to receive portions of their salary in cryptocurrency, a risky strategy given the volatility of the digital asset classes.

Companies that deal in cryptoassets are prominent among those offering such payment options to their employees, a scenario the Financial Times has compared to the practice of payment in company scrip.

Outlawed in Britain by the Truck Act in 1887, scrip was issued by companies as tokenized payments that could often only be spent as rent on company-owned houses and for food and goods in company-owned stores. Such form of payment would permanently shackle their employees to the company and ensure that all salaries would be spent back with the company.

Given the Choice

Indeed, it would be a good comparison if modern companies were forcing their employees to accept part payment in cryptocurrency. 

In the UK, the 1887 Act was superseded by the Employment Rights Act of 1996, which allows employees to choose how they would like to be remunerated. 

Crypto-enthusiasts and those willing to take on extra risk appear to be accepting such offers and this has prompted tax authorities around the world - including New Zealand last week - to respond in order to ensure tax loopholes are not exploited.

It remains an obligation upon employers, however, that any form of payment other than 'coin of the realm' is purely optional.