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.

Joseph Lubin: Facebook's Libra Is a 'Centralized Wolf', Raises Privacy Issues

Ethereum co-founder Joseph Lubin recently published a blog post in which he claimed that Facebook’s cryptocurrency Libra is “a centralized wolf [disguised] in centralized sheep’s clothing.”

Lubin, a Canadian entrepreneur who’s also the founder of ConsenSys, a Brooklyn, New York-based Ethereum (ETH)-focused development studio, acknowledged that the Calibra project’s goal to send money quickly and cheaply should be a key design consideration of modern internet-based currencies.

Can Facebook Be Trusted?

However, the Princeton University graduate pointed out that most people would not be able to place enough trust in Facebook’s management - as he wrote:

Don’t I need to trust Facebook and other intermediaries to trust Libra?

Interestingly, Lubin also noted that the name of the social media giant, Facebook, is “hardly mentioned” in the Libra crypto project’s whitepaper or its technical documentation. Moreover, Lubin believes that Facebook’s new cryptocurrency project is “not eliminating” the need for “subjective” trust, which most decentralized currencies do. Instead, he thinks the social media firm’s crypto is “imploring us to trust in Libra.”

Merchants Must Trust the “Initial” Libra Network Will Operate “Responsibly”

Going on to allege that Facebook’s cryptocurrency wallet Calibra will “seek trust” as using it will require users to provide their government-issued IDs for verification, Lubin also pointed out:

It will need merchants to trust that their initial network will responsibly run nodes to validate transactions on the system.

Younger Users Prefer Decentralized Payment Protocols

The former VP of Technology at Goldman Sachs further mentioned that the younger generation prefers “payment systems built on truly decentralized protocols” - rather than having to verify their identify and share other personally identifiable information on centralized platforms like Facebook.

Concerns Regarding Users’ Financial Privacy

The ConsenSys founder also noted that Facebook, as a company, makes a lot of money off personal user data. Should the Libra project move further, as it is currently facing various regulatory challenges, then some of Lubin’s concerns might seem reasonable:

What happens when you wrap your personal finances up in this, too? That our digital identity will never merge with Libra’s financial data is a hard perception to shake. It is almost a given, even if they have the best of intentions—“accidents” and incursions happen when relying on centralized architectures.

Lubin went on to reveal that the developers at ConsenSys had already begun to review the source code shared by the Libra project’s creators. He claims that the technical documentation and other details released by Libra’s founders is quite similar in some ways to Ethereum, the world’s largest smart contract platform.

While admitting that Facebook’s project will (most likely) be “well executed, technically”, Lubin remarked:

As of today, Libra has made a bold promise, and it’s one that Facebook needs to keep. Until then, Libra is like a centralized wolf in a decentralized sheep’s clothing.