By: Gerelyn Terzo of Sharemoney
While Zug, Switzerland may be known as Crypto Valley, it is about to face some budding competition in Western Africa. Senegal’s profile for cryptocurrencies is on the rise now that Senegalese-American R&B singer Akon, whose full name is Aliaume Damala Badara Akon Thiam, has put the wheels in motion to construct a USD 6 billion “futuristic crypto-themed city,” called Akon City. Akon recorded hit after hit in the 2006/2007-era and collaborated with the likes of Whitney Houston and Michael Jackson.
Akon has been cheered for the new city, which he affectionately calls “Wakanda ” in a nod to the Marvel Comics city, which symbolizes Afro-futurism and was featured in the “Black Panther ” movie. Akon City will be fueled by Akon’s native cryptocurrency dubbed Akoin (AKN), which made its debut in 2018. According to the rapper, Akoin will work with mobile devices and in a similar way to bitcoin and Ethereum, the two largest cryptocurrencies.
Akon City, which will be in close proximity to Mbodième and will have a smart-city theme, won’t be built overnight but instead is expected to take about a decade to complete in phases. Phase-one of the project should be ready by the end of next year, comprising:
- Hospital campus
- Mall in which to spend Akoin
- Police station
- Waste facility
- Solar power plant
Phase 2 will commence in 2024, the result of which will be a bustling city that is fueled entirely by the AKOIN cryptocurrency. Ultimately, residents will be able to gain access to parks, universities, stadiums and an industrial complex in the crypto city.
Financial and Political Support
So far, KE International, which is the US-based consulting and engineering firm constructing Akon City, has attracted USD 4 billion to its coffers, the proceeds from which will be directed toward completing the first two phases of the mega project. Among the financial backers is Kenyan tech entrepreneur Julius Mwale, whose hospital, mall, grocery store, solar power group and data centers are part of Phase 1 construction.
In addition to investors, Akon City, which is being built on 2,000 acres of oceanfront and is located less than an hour away from the Dakar airport, also has the support of the Senegalese government. President Macky Sall has already designated Akon City as a “special tax zone” that is eligible for tax breaks as a way to roll out the welcome mat for investments.
Akoin Pilot Program
The Mwale Medical and Technology City (MMTC) in Kenya has already been testing the mettle of Akoin through a pilot program. The coin has been used for transactions across payroll and retail including at restaurants, supermarkets, hotels and the Hamptons Hospital so far.
Also part of the pilot program is the digital Akoin Wallet, which can be used to convert AKN to Kenya shillings, the U.S. dollar, bitcoin and other currencies thanks to an Atomic Swap technology. The wallet is also tied to an online marketplace that is a platform for decentralized applications and financial services for developers to tap into. Users can then engage with the ecosystem to spend, save or earn AKN on the apps and they can also find resources to run a business or participate in the gig-economy.
The MMTC plans for Akoin to be its sole blockchain payments platform by year-end 2022 with projections for annual transactions of USD 2 billion annually. At last check, Akoin boasts a market cap of USD 190 million and can be traded on the Bittrex exchange in the BTC and USDT trading pairs.
One of the aims of blockchain technology, which underpins cryptocurrency transactions, is financial inclusion. For instance, the peer-to-peer nature of bitcoin in which a third-party financial institution is not needed makes it possible to reach the unbanked and those unable to access the traditional financial services. Key features of blockchain transactions are speed and costs, as the lack of a third party means transactions can be sent in near real-time at a fraction of the cost of bank transfers.
In Senegal, 17% of the population has an account at a financial institution, according to The World Bank’s latest data from 2016. Nearly a quarter of the country’s top earners have a financial account, but a mere 7% of the lowest earners similarly do. More than 20% of Senegalese men have a financial account compared to 13% of women in the country. Two-thirds of those surveyed by The World Bank use credit products, while nearly three-quarters of those polled have no means to save money. Of the segment of the population that uses financial products in Senegal, more than half rely on money transfers, nearly 30% use banks, 10% look to money financial institutions (MFIs) and 9% turn to e-money agents.
According to the World Bank, 1.7 billion people globally are without access to an account at a financial institution, comprising the unbanked and living off of less than USD 2 per day. Some 80% of the Sub-Saharan African population falls into the unbanked camp. These same folks, however, depend heavily on their smartphones to make it through life. Given the digital nature of cryptocurrencies like bitcoin and Akoin, the unbanked and underbanked in Africa could experience greater financial stability thanks to the rise of blockchain technology. Africa boasts 444 million users of mobile phone technology, according to the Akoin whitepaper.
Bitcoin Meetups in Dakar
One developer who is looking to teach the Senegalese population about bitcoin is Fodé Diop, founder of the Dakar Bitcoin Developers meetup. One of the things Fodé is known for is giving away sats, which are units of bitcoin, at his meetups, which helps to make the meetings even more popular. He was also among the recipients of a USD 25,000 grant by the Human Rights Foundation’s Bitcoin Development Fund. The grants were backed by U.S. cryptocurrency exchange Gemini, which is run by Tyler and Cameron Winklevoss, and its Gemini Opportunity Fund.
While the pandemic has been a drag on many construction projects in sectors such as oil and gas due to the lockdowns, it is full speed ahead for Senegal’s crypto city. In fact, with the advent of COVID-19, Akoin president and co-founder Jon Karas told Forbes that Akon City was needed now more than ever, adding that it will pave the way to “create better pathways, bank the unbanked, and create better, more sustainable, futures for the people of Senegal.”