Johannesburg. The air here is electric with the energy of hustlers, dreamers, and survivors. I hear it in Amahle’s voice, an enterprising young woman I met at a township market. She sells exquisite pieces of beaded jewelry, large and colorful creations that celebrate the gorgeous hues of nature found in our homeland. Yet beneath all the artistry lies an unending fight. A fight to get access to capital, to support her kids’ education, to just be able to fully engage in today’s economy.

Traditional banks? Forget about it. The costs are exorbitant, the requirements insurmountable. Amahle's story is not unique. Millions more across Africa are excluded, unbanked, left on the margins.

Now, Binance, a crypto exchange most people here haven't even heard of, is sitting on a mountain of stablecoins – $31 billion to be exact. Thirty-one billion dollars. That’s greater than the entire GDP of several African countries. And the analysts say that it could be a precursor to an “altseason,” a rally in smaller cryptocurrencies.

Is this a magical, inclusive, rising tide that lifts all boats, or a more-genocidal-then-inclusively-helpful tsunami that washes away the vulnerable amongst us. The narrative is tempting: stablecoins offering a lifeline to the unbanked, bypassing traditional financial institutions, providing access to global markets. Remittances cheaper, microloans more available, entrepreneurship unleashed.

Liquidity Explosion or Exploitation?

Now picture Amahle using a stablecoin-based app to accept payments from tourists, instantly and without crazy conversion fees. Picture her being able to access a microloan to grow her business, thanks to decentralized finance (DeFi). It’s a hauntingly beautiful image, the vision of personal financial empowerment.

Hold on a minute, before you jump straight into the hype. This isn't a fairy tale. This is finance, and finance, particularly in the Wild West of crypto, is notoriously predatory.

The "liquidity explosion" Timo Oinonen speaks of? Scams, rug pulls, extreme volatility and more would be a sudden recipe for disaster. This disorder might incinerate the savings of people who can least afford to lose their nest egg.

I fondly recall my grandmother sharing small tales of the first phases of mobile banking during her time in South Africa. At first, it was considered a gamechanger. It fast became a hotbed of fraud that victimized the technically naive. The same risks apply in this context, but the vast complexity of blockchain and increased anonymity provided by crypto greatly exacerbates risk.

The key, as always, is education. It wasn’t just learning how to open and use a crypto wallet, it was the importance of critical thinking. About knowing the risks, about knowing the fees, about knowing that you could get scammed.

We’re going to require culturally appropriate educational materials, translated into indigenous languages, distributed by trusted community leaders. We owe it to people like Amahle to teach them how to navigate their choices, not just fall prey to and trust the pipe dreams of fast wealth.

Education: The Only Vaccine Against Crypto-Chaos

Think of it like this: giving someone a fishing rod is empowering, but only if they know how to fish and how to avoid being caught in the net themselves.

Along with policymakers and regulators, the other major players in the crypto space, like Binance, bear responsibility here. In other words, they can’t just inject liquidity into the market and hope for the best. They need to plan for and improve education and awareness campaigns, actively engaging the communities they are testing in to foster trust and understanding.

The opportunities presented by stablecoins to increase financial inclusion in Africa can’t be understated. Potential doesn't equal reality. We need responsible innovation, not reckless abandon.

If inflation is an opportunity to create positive change in Africa, surging stablecoin reserves at Binance could be a catalyst. Or, alternatively, it could be just another instance of the Global North looking to the Global South to pad their own pockets.

The choice is ours. The choice is yours. So as you surf this bearish declining Bitcoin dominance and peep the possible cup-and-handle formation on the TOTAL2 chart, remember Amahle. She is one of millions like her who are working to build a new and better life.

Responsible Innovation or Reckless Abandon?

Amid all the hype, we cannot lose sight of the costly human toll. Together, let’s call for innovation with integrity! We need to center education and make sure everyone is included in crypto’s opportunities, not just the privileged few.

Because ultimately, the success of this "liquidity explosion" will be measured not in dollars, but in the lives it improves. And the joy it adds to the smiles of people like Amahle. And if the wave of $31B hasn’t brought joy and compassion with it, then it’s just a wave of empty publicity.

  • Clear and transparent regulations: African governments need to develop regulatory frameworks that protect consumers without stifling innovation.
  • Strong consumer protection: Mechanisms to prevent and address scams and fraud are essential.
  • Focus on accessibility: Crypto solutions need to be user-friendly and accessible to people with limited digital literacy.
  • Collaboration: Crypto companies, governments, and NGOs need to work together to build a sustainable and inclusive ecosystem.

The surging stablecoin reserves at Binance could be a catalyst for positive change in Africa. Or, it could be another example of the Global North exploiting the Global South for profit.

The choice is ours. The choice is yours. As you read about Bitcoin dominance declining and potential cup-and-handle patterns on the TOTAL2 chart, remember Amahle and the millions of others who are just trying to build a better life.

Let's not let the hype blind us to the human cost. Let's demand responsible innovation, prioritize education, and ensure that the benefits of crypto are shared by all, not just the few.

Because ultimately, the success of this "liquidity explosion" will be measured not in dollars, but in the lives it improves. And the smiles it brings to faces like Amahle's. And if the surge of $31B only brings sadness and empathy, then it is nothing more than hype.