Yellow Card, a cryptocurrency exchange, has become the largest centralised exchange in Africa with $1.75 billion in transactions facilitated since its launch in 2019.
Founded by Chris Maurice and Justin Poiroux, Yellow Card offers a similar experience to Block’s Cash App. It enables users to purchase cryptocurrencies using fiat currencies and send them across borders.
Unlike centralised exchanges like Coinbase, where customers store their tokens hoping for appreciation, the average Yellow Card customer keeps their money on the platform for less than five minutes.
According to co-founder Maurice, users deposit money, purchase BTC or USDT, and then send it off within minutes. The exchange lets users send money to 16 countries on the continent and has streamlined the process of converting crypto back to local currencies at the other end of the transaction.
The centralised cryptocurrency exchange has grown to become the largest of its kind in Africa, boasting 1.4 million users and facilitating $1.75 billion in transactions since its 2019 launch.
The platform currently employs about 220 people and typically facilitates around $5 million in transactions on a good day, according to co-founder Chris Maurice.
With a valuation of $200 million and $57 million in funding from investors like Jack Dorsey’s Block and Peter Thiel’s Valar Ventures, the company aims to expand its services throughout the continent.
Maurice hopes to make Yellow Card a billion-dollar company by being the first to take advantage of the opportunities in each African country.
Yellow Card’s success in Africa is due in part to the issues with the continent’s banking system, which has led to increased adoption of cryptocurrencies.
Africa’s payment framework is quasi-colonial, with roughly 80% of cross-border payments originating from African banks processed offshore, mostly in the US or Europe. This results in higher costs and processing times that can take weeks.
Ray Youssef, CEO of Paxful, stated that the banking system in Africa is broken, even among mobile money providers and telcos. Additionally, payment operators in the continent are not connected, with only 2% of 2,000 payment networks talking to each other.
This presents an opportunity for crypto to fill the gap left by the traditional banking system, as crypto payments facilitate cross-border transactions in real-time.
This is especially important given the demand for alternative payment methods in Africa, with many turning to crypto for solutions.
