The concept of privately issued money isn’t new to East Africa, and the idea has been promoted by telecom companies in the region for several years. However, these systems are naturally slow and cumbersome as they are built on legacy technology and still rely on traditional monetary systems.
Blockchain can process faster transactions and can offer microtransactions as low as a fraction of a cent. Other benefits include offline payments that reconcile once you’re back online, and most importantly, a resilient infrastructure that is secure with no downtime.
This is what Reginald Tumusiime (Chairman of the Blockchain Association of Uganda and Founder of CapitalSavvy) hopes to offer through his privately issued Uganda Shilling project (UGXC) which is built on the BSV blockchain.
Tumusiime explained that the goal of the project was not to take the place of a central bank but to add value to a growing market. ‘Indeed it will be privately issued money, just like mobile money is. But the difference is that we hope to leverage blockchain capabilities in a solution, thereby making the process of moving money around faster, more affordable, very efficient, and with no downtime,’ he said.
Tumusiime added that the project will be based on privately issued money backed one-to-one by money with a bank or a trust account in one of the largest banks. ‘But leveraging Web3, specifically blockchain technology, to make it faster and all these other advantages scalable, efficient, and with no downtime to accommodate broader financial inclusion.
Disrupting the disruptors
Tumusiime noted that the minimum amount of money which can be sent in Uganda currently is around UGX500. ‘But with the kind of solution we are providing you will be able to go much lower than that, a fraction of a cent or so, in terms of fees and in terms of the minimum amount of money that you can send. ‘So it’s an opportunity for us to include everyone, who is otherwise left out, even with such a great story around mobile money, he said.
Tumusiime added that BSV Blockchain has been incredibly helpful in providing a framework for this project and allowing it to happen from a technical perspective. ‘We now have an opportunity to do very fast transactions, more transactions per second compared to any other blockchain.’
Patrick Prinz (Founder of Kite Financial), who is partnering with Tumusiime on this launch, noted that a stable, permissionless project is key to this project’s existence. He added that he and his team also have new technology offered by BSV Blockchain, including the SPV Wallet, to help achieve this goal.
Giving people the tools to succeed
Prinz said that his team has also held discussions with officials from the Ugandan government about possibly launching a Central Bank Digital Currency (CBDC) built on the blockchain.
‘The pitch from us to them is you can build your internet. That’s okay. Allow us to build an Internet-compatible solution, already in parallel. And let’s share the learnings. And so we can expedite your journey in this space.’
‘The BSV Blockchain is interested in giving people businesses and builders and the owner’s easy access to the basic tools they need to get started. I’ve been long an advocate for open-source tools and for really allowing an ecosystem to emerge.’
