This week in crypto: Akon, Binance, and China to take over the world

The world might still be in lockdown due to the coronavirus pandemic, but this week in crypto, things have barely stopped. Akon announced his expansion into East Africa, Libra “pivoted” its business model, Binance opened up for P2P trading in Venezuela, and China’s digital yuan kicked into action. 

Akon wants the whole of Africa to use his cryptocurrency

Akon, the world-famous rapper, has turned his hand to crypto and empire-building. His latest project, cryptocurrency Akoin, will power a city in Kenya, he announced at virtual blockchain conference Blockdown 2020. 

Akoin will be the exclusive cryptocurrency of the Mwale medical and technology city. It’s the second city set to be powered by Akoin, after Akon City, the rapper’s very own metropolis in Senegal. 

Akon’s ambition is for the whole of Africa to run on cryptocurrency, which he says will bank the unbanked, as well as make transactions cheaper and more secure. 

MMTC, however, appears to be a city that panders to the rich. The 35,000 complex houses a hospital, several resorts, and a 36-hole golf course. It’s marketed as “the Hamptons of New York in Kenya,” according to a 2018 promotional video that describes the vision of its creator, Julius Mwale. 

Smartphone penetration in Kenya is roughly 21%, according to Newzoo's 2018 Global Mobile Market Report, and Senegal’s is 19%, according to its 2015 edition. Only some Akoin transactions can be processed though so-called “dumbphones”. 

It appears that the rest of Africa will have to wait—at least for now. But no matter: Akon told me that, “it's not so [much] about what's happening right now, because I know once Akoin is in effect, and we're moving it in the areas that we're moving in… it’s going to grow very rapidly.” 

From there, the sky’s the limit: “We expect the Akoin platform will exclusively run for about 70% of Africa,” said Mwale. Hopefully soon, since the $10 billion Akon City project is now 85% complete, he said. 

Binance opens up P2P crypto trading in Venezuela

The world’s largest crypto exchange, Binance, has opened up peer-to-peer trading in Venezuela, the latest in its drive to win over Latin America. Now, its users can buy and sell crypto with bolivars, Venezuela’s national fiat currency.

Venezuela’s national currency is now so weak that last week someone realized that $10 can be traded for either 1 million bolivars or 1 million bells, the in-game currency of the new Animal Crossing. (Binancians are surely clamoring: when will Binance list $BELLS?)

But Venezuela’s deep within the crypto play—Animal Crossing fans must play catch-up. The country even has its own cryptocurrency, the Petro. 

And Venezuela has the highest volume of peer-to-peer cryptocurrency trading in the Americas, surpassing even the United States on P2P platforms. The most used P2P trading platform right now is LocalBitcoins, where Venezuelans move just over 500 BTC every week, according to data from Coin.Dance.

Facebook’s Libra changes tack

Social media site Facebook has taken the advice of regulators on board… and completely redesigned Libra, its controversial upcoming cryptocurrency, due for release in the second half of 2020. 

Libra is no longer a cryptocurrency whose value is pegged to a basket of fiat currencies. Now, Libra will provide individual stablecoins for fiat currencies, such as the dollar, the pound, and the euro. It will still mint its Libra coin, but its value will now be backed by a basket of its stablecoins. Smart contracts will maintain its peg. 

It will now have lots more anti-money laundering and anti-terrorist protocols, to keep up with the latest recommendations issued by the Financial Action Task Force, the world’s international standard setter for anti-money laundering regulations. 

This replaces “the originally planned transition to a permissionless form of governance to a market-driven open and competitive network,” Libra’s co-creator and figurehead, David Marcus, tweeted. Now, Libra will be able to enforce sanctions on coins, per requests from law enforcement.

Facebook has also distanced itself from the project. Less than 10% of its funding now comes from Facebook, tweeted Marcus. Many other members of the Libra Association, including eBay, Vodafone, PayPal, Visa, and Stripe, have quit the project. It remains to be seen whether they’ll be wooed back to the all-new, all-singing, all-dancing Libra.

China’s digital yuan to go live in May

China’s long-awaited digital currency, known as the DC/EP, is due to go live in May to state employees. It is expected to work more like paper money than a cryptocurrency: its value is stable, and the central bank will be able to monitor every transaction. In a pilot, it will replace half of state employees’ transportation allowances in the city of Suzhou.

Four-state owned banks will issue the payments, reported local news outlet China Star Market: the Bank of China, the Agricultural Bank of China, the Industrial and Commercial Bank of China, and the China Construction Bank. Banks must issue all staff with a digital wallet, reported China Star Market.

The digital yuan, which the People’s Bank of China has been developing since 2014, is now in public beta in four pilot regions, Decrypt reported on Tuesday. “As we understand it, the DC/EP project has reached the next phase of testing," Matthew Graham, CEO of Sino Global Capital, told Decrypt at the time. "Specifically, the testing is with the Agricultural Bank of China, and we are told in four pilot regions”: Shenzhen, Xiongan, Chengdu, and Suzhou, he said.

"First impression is that the app looks slick, it’s a pro job in the Silicon Valley tech sense," said Graham. But as Silicon Valley flounders about trying to patch up the coronavirus pandemic with technology, is that really such a compliment?