ACCRA, GHANA – On the afternoon of Dec. 26, 2022, Chris Maurice finally capitulated and went to the emergency room at Hospital Clinic de Barcelona, just west of the town’s gothic quarter. For roughly 10 months, the 26-year-old CEO of the biggest centralized crypto exchange in Africa had ignored lots of the symptoms consistent with malaria as he bounced between 21 different countries on the continent, advising heads of state on bitcoin adoption and organising institutional accounts for his business, Yellow Card.
By the point Maurice was admitted to the intensive care unit, plasmodium parasites had been wreaking havoc on his red blood cells for nearly a 12 months, multiplying in his liver and threatening to shut down a lot of his major organs, including his kidneys. His face and eyes were yellow from jaundice. As his hemoglobin levels plummeted in response to the intravenous meds administered as treatment, 4 days of blood transfusions helped save his life.
But to Maurice, his brush with death was simply the worth of doing business. Since graduating from Auburn University in Alabama with a finance degree 4 years ago, he has traded security and stability for a profession on the road, all with the goal of fundamentally disrupting Africa’s broken economic system.
“I’ve slept more nights than I can count within the Joburg airport,” Maurice told CNBC on the sidelines of the Africa Bitcoin Conference in Ghana. “I’ve mastered the art of where to go to search out chairs with no armrests. I’m six-foot-five, so I would like my space.”
For nearly 1.4 million users across the continent, Yellow Card – which offers an experience just like Block‘s Money App – is a crucial lifeline to money.
“We desired to make it as easy as possible for anybody to have the opportunity to come back on and buy crypto inside three minutes,” explains Maurice in an Uber ride cutting due south through the Ghanaian capital of Accra.
Yellow Card CEO Chris Maurice just before meeting with the Securities and Exchange Commission in Accra, Ghana.
Chris Maurice
From there, Yellow Card users can send or receive digital money in eligible markets. But unlike a centralized exchange like Coinbase, where many shoppers store their tokens for an prolonged time period hoping that their digital assets will appreciate in value, the common customer on Maurice’s exchange keeps money on the platform for under five minutes. People take their local fiat currency, turn it into bitcoin or a U.S. dollar-pegged stablecoin like tether to send it across a border, and the recipient immediately cashes it out.
“It’s literally like, I deposit one million Francs in Cameroon, I purchase USDT or BTC, after which I send it off,” continued Maurice.
Yellow Card customers can receive cryptocurrency from anywhere on the earth and pay only a network fee, which generally ranges from 5 cents to $1, in accordance with Maurice. That is particularly helpful for individuals who would customarily turn to a money service provider like Western Union and MoneyGram, which sometimes charge heavy commissions on remittances.
The service is a game-changer for a lot of Africans, who depend on money sent home from abroad, especially in countries where unemployment and inflation is rife. The newest data from the World Bank shows that in Sub-Saharan Africa – where as much as 65% of adults are unbanked – remittance flows reached $50 billion in 2021, essentially the most recent 12 months for which data is out there. The actual number is probably going much higher whenever you consider money transferred over informal channels. Meanwhile, World Bank data shows that it’s costlier to send remittances to Sub-Saharan Africa than to some other region on the earth. On average, it costs $15.60 (7.8%) to send $200 to or from Africa. That percentage could be as high as $38, or 19%, in some countries.
Constructing the crypto payment rails vital for Yellow Card requires jumping through lots of legal and regulatory hoops, which is why Maurice spends about nine months a 12 months within the countries where he operates or plans to launch crypto services. He has local lawyers in just about every country on the continent, and he meets with elected officials and regulators to further foam the runway for adoption. The extent of hospitality varies widely across the continent.
Yellow Card CEO Chris Maurice in Accra, Ghana loading money onto his Mobile Money account, MoMo.
Chris Maurice
Maurice stands out just about wherever he goes because of his height and plume of curly black hair. His speech is punctuated with laughs and smiles, and that friendly demeanor puts people comfortable. Nevertheless it’s underpinned by an intense work ethic — he’s got a black belt in TaeKwonDo, was an Eagle Scout in his youth and a finalist for Rhodes and Marshall scholarships in college. He also cares deeply about revolutionizing a broken economic system. These traits help enlist supporters for his longshot ideas – like launching a centralized cryptocurrency exchange in Africa from his dorm room in Auburn, Alabama.
Yellow Card has facilitated $1.75 billion in transactions since launching in 2019 and has about 220 employees – mostly in Africa. The exchange lets users send money to 16 countries on the continent – and crucially, at the opposite end of that transaction, the platform has streamlined the means of converting crypto back to local currencies.
On a very good day, the service will do $5 million in transactions. On a slow day, it’s closer to $1 million, in accordance with Maurice.
The corporate has also raised $57 million, including from Jack Dorsey’s Block and Valar Ventures, a enterprise capital firm co-founded by Peter Thiel. Maurice says his ultimate goal is to expand service to the remainder of the continent and switch Yellow Card right into a billion-dollar company, up from its current valuation of $200 million. In practice, meaning capitalizing on the exchange’s first-mover advantage.
“I spotted very early on that there is a lot opportunity in all these countries and that we would have liked to be the primary one there,” said Maurice.
“I drove from South Africa to Botswana, Zimbabwe to Zambia, then flew as much as Ethiopia, Ghana, and Uganda. In all of those places, I used to be doing the grunt work – things like company registration and opening bank accounts, in order that we can be able to go.”
Maurice doesn’t stay anywhere for long, however the transient lifestyle suits him. He’s currently in Barcelona, but it surely’s just an apartment in a timezone that lets him take his morning work calls from a desk, somewhat than the shower.
“I can brush my teeth in peace,” Maurice says together with his trademark smile.
How money moves in Africa
Moving money in Africa is an expensive and sophisticated process.
Business bank branch access is restricted, especially for people living in distant and rural areas. Digital banking options are also limited. The newest stats from the World Bank show that just 29% of the population in Sub-Saharan Africa uses the web. Tack on rampant hyperinflation, widespread government corruption, and capital controls trapping domestic money in banks, and money can stop making sense altogether.
“If someone desires to move money to the country round the corner, normally, you’d should refill a suitcase stuffed with money and move it over the border,” explains Ray Youssef, the CEO of Paxful, a peer-to-peer crypto marketplace where users can exchange tokens with each other.
Firms like Western Union and MoneyGram offer an expansive physical network of storefronts all over the world designed to maneuver money for individuals who are unbanked. That money network was extraordinarily difficult and expensive to construct, which is why there aren’t lots of direct competitors. It is usually why those money transfers often incur substantial fees.
“Your entire system of cross-border payments is all about rent-seeking. That is what it’s designed to do,” argues Alex Gladstein, chief strategy officer for the Human Rights Foundation, a corporation that works with human rights activists from authoritarian regimes all over the world.
“It isn’t designed to allow you to move money from A to B. It’s designed by someone who’s going to become profitable off you moving money from A to B,” continues Gladstein.
If someone desires to move money to the country round the corner, normally, you’d should refill a suitcase stuffed with money and move it over the border.
A part of the issue stems from the continent’s quasi-colonial payment framework, wherein roughly 80% of cross-border payments originating from African banks are processed offshore, mostly within the U.S. or Europe. That translates to higher costs and processing times which might be sometimes measured in weeks.
“The mainstream way of approaching that is, ‘Oh, let’s just Africanize it. Let’s replace the intermediaries over there with intermediaries here,'” explains Gladstein. “That is probably even worse because they will be corrupt and expensive.”
Across the continent, there are fintech corporations built on top of the present banking system. These platforms abstract away the complicated back-office processes, but the elemental problem stays. These businesses undergo the identical legacy payment networks, where they spend lots of money settling payments — costs which they then pass on to customers.
The Pan-African Payment and Settlement System, or PAPSS, launched in Jan. 2022 with a goal of bringing existing payment systems together under one interoperable network. Nevertheless it’s too early to inform through official metrics whether PAPSS has begun to deliver on its promise of saving African users greater than $5 billion in annual transaction fees.
An worker uses a Nokia 1200 cell phone inside an M-Pesa store in Nairobi, Kenya, on Sunday, April 14, 2013.
Trevor Snap | Bloomberg | Getty Images
Then there’s mobile money, which has been around for the reason that early 2000s. Consider it like an electronic wallet tied to a phone number that doesn’t require a smartphone or data to operate. Users will pay bills and shop with their phone through SMS texting, as an alternative of getting to depend on traditional banking options.
Africa’s mobile money transactions rose 39% to greater than $700 billion in 2021, in accordance with data from the GSM Association, a non-profit representing mobile network operators worldwide. World Bank data shows that account ownership at a financial institution — or via a mobile money service provider — has greater than doubled within the last decade, rising to 55% of adults in Sub-Saharan Africa.
But at the same time as adoption proliferates, mobile money users do not get the perks of legacy banking, including earning interest on banked savings and increase a credit rating based on a history of spending. Interoperability on the continent also stays a significant issue with this alternative way of banking.
“Your entire banking system in Africa is totally and utterly broken, even amongst the mobile money providers, the telcos,” said Youssef from Paxful.
“Two thousand payment networks and only 2% of them consult with one another. That number continues to grow. It isn’t recovering, it’s actually getting worse,” continued Youssef.
Take M-Pesa, short for “mobile” and the Swahili word for money — “pesa.” It’s Kenya’s version of mobile money, and it’s incredibly popular there. M-Pesa operates in seven different African countries, but you’ll be able to’t send money from M-Pesa Kenya to M-Pesa Ghana.
A resident checks his phone outside a mobile money kiosk within the Kibera district of Nairobi, Kenya, on Monday, Aug. 1, 2022.
Michele Spatari | Bloomberg | Getty Images
“Even on the identical network, owned by the identical company, due to regulations, those two networks don’t consult with one another,” said Youssef.
One solution for moving money across borders is the centralized crypto exchange that Maurice built. The Yellow Card CEO says he would ultimately like to tie in with the Western Union network to assist bring those costs for the client to essentially zero through crypto, on condition that half of all of the world’s remittance continues to be money on each ends.
An alternative choice for making international payments on the continent are peer-to-peer digital asset marketplaces, just like the one which Youssef runs.
“People find one another, they do a trade, there’s an escrow which removes the trust from at the least one side, and the deal is finished,” Youssef told CNBC on the sidelines of the Africa Bitcoin Conference.
Paxful has facilitated $5 billion in transaction volume in Africa because it launched, though Youssef says it’s only a small fraction of your complete peer-to-peer market.
“Most of it happens on fast messenger, or on the road,” he said. “Africans have been doing peer-to-peer finance for a really very long time; one might say over 1,400 years. So that is nothing latest to them.”
Yellow Card CEO Chris Maurice in a hospital in Douala, Cameroon, recovering from food poisoning after eating cow skins.
Chris Maurice
From Taco Bell to Nigeria
On a 15-minute drive from Accra’s embassy-heavy Labone District all the way down to the Atlantic Coast, Maurice describes himself as being as Southern because it gets. Before touching down in Nigeria in 2019 to launch his company, the Latest Orleans native hadn’t traveled much beyond the Southeastern seaboard of the U.S.
“My entire worldview was essentially confined to 2 states – Louisiana and Alabama,” said Maurice. “I had only been on a plane 4 times before flying to Lagos on a six-day-old passport with no visa and no shots.”
Despite his limited travels to that time, Maurice was no stranger to the difficulties related to moving money across the planet.
Starting within the fifth grade, he used his father’s eBay account to sell Pokemon cards and other collectibles online – a enterprise that will ultimately cover his college tuition at Auburn. However the business of sending and receiving money internationally wasn’t at all times straightforward. A few of his customers in Pakistan, for instance, weren’t in a position to use PayPal. Bank wires were also not an option.
To receives a commission, Maurice as an alternative had to attend in line at a neighborhood Western Union branch. It cost the customer a hefty fee, and it cost Maurice time – and gas money.
On the age of 18, Maurice turned his attention to bitcoin and shortly grew convinced that the world’s biggest cryptocurrency was the reply to his problems. It also presented a latest business opportunity.
In 2015, Maurice and his freshman roommate’s best friend, Justin Poiroux, decided to get into bitcoin trading by running their very own over-the-counter trading desk out of the Taco Bell on South Gay Street in Auburn.
“We began putting out ads on Craigslist that mainly said, ‘We’ve got bitcoin. Come give us money,'” explained Maurice.
Every Wednesday at 7pm, he and Poiroux, a tech-savvy coder, would grab a spot within the back and split a 12-pack of Doritos Locos Tacos while drop-ins would swap dollars for bitcoin. Customers would slap a pair hundred dollars down on the table (bitcoin was trading at around $250 on the time), scan a QR code, and that was it. On the backend, Maurice and Poiroux were using LocalBitcoins, a peer-to-peer exchange, to perform the trades.
On the time, Maurice says, his OTC desk offered a better onramp to crypto than Coinbase, whose interface was tough to navigate. Profits got here from the arbitrage play between payment methods, since bank transfers and money had different fees.
As for the placement? Maurice says he selected Taco Bell since it offered the “perfect amount of apathy.”
“This operation would have never flown at a Chick-fil-A,” he said.
Yellow Card CEO Chris Maurice in Amboseli, Kenya.
Chris Maurice
After two weeks, business was booming, in order that they decided to expand the franchise.
“We began calling up friends from highschool who were now at LSU, Yale, Georgia, Alabama, anywhere that we knew someone,” continued Maurice. “Just a few weeks later, we had seven Taco Bells on the eastern United States, all inside college campuses, where you could possibly walk in and buy bitcoin.”
4 months later, the Taco Bell trading desks were moving hundreds of dollars in bitcoin. They weren’t too rigorous on the accounting on the time, but Maurice estimates that roughly thirty thousand dollars was exchanged across your complete franchise.
“Then sooner or later, Justin and I were talking and we said, ‘Man, we must always really do something less sketchy with our lives’.”
Then Maurice had a probability meeting at a Wells Fargo near campus that modified his life.
“I meet this Nigerian guy who’s sending $200 to his family, and the bank charged him $90,” Maurice recalled.
“I’m like, ‘Man, have you ever heard of bitcoin?'” continued Maurice. “I explained to him what bitcoin is and the way he could try it out by downloading Coinbase.”
There was only one problem: He had no idea what would occur on the opposite end of the transfer.
“What on earth is that this guy’s mom going to do with $200 value of bitcoin?” he said.
“I began skipping class and researching what the banking system was like in Nigeria – and the currency,” said Maurice. “Could you purchase bitcoin in Nigeria? Could you sell it?'”
Maurice and Poiroux decided that the core marketplace for Yellow Card ought to be the individuals who stood to profit essentially the most from another, international payment network that cut out extra transaction fees and wait times.
While Poiroux stayed behind in Alabama to proceed constructing and maintaining the tech that fueled your complete operation, Maurice set off to Lagos to ascertain a physical presence, including laying the entire regulatory groundwork needed to get the business off the bottom.
Centralizing crypto payments gave the impression of the apparent thing to do. Up until their launch, peer-to-peer crypto payments on Binance, Paxful, or other more regional exchanges had been the established order for a lot of wanting to trade and put money into digital tokens.
“Generally, the rationale that folks use centralized exchanges is for the experience, right? It’s significantly easier to make use of Coinbase than it’s to make use of MetaMask, which involves attempting to work out the best way to get your personal ethereum and store your personal keys,” explains Maurice.
Having the sting on general licensing has also put Yellow Card ahead of the competition.
“The quantity of local expertise that’s required to get a few of these payment service providers signed, in addition to registering entities and organising bank accounts — it’s such a distinct way of doing business than in other parts of the world,” Poiroux tells CNBC.
Yellow Card CEO Chris Maurice on a roadtrip from South Africa, north to Zambia.
Chris Maurice
Running Yellow Card
Poiroux doesn’t crave the limelight — he has at all times worked behind the scenes, unconcerned with notching public accolades. If Yellow Card were a band, he’d be the drummer or bass player, keeping every thing solid within the background while Maurice took center stage because the lead singer.
Poiroux began coding when he was 10, because he desired to make his own video games. But after reading the bitcoin white paper, he became obsessive about the concept of decentralized, unstoppable software.
The Yellow Card co-founder and chief technology officer dropped out of school freshman 12 months, and as an alternative holed up in his off-campus apartment teaching himself the best way to be a full-stack developer through a mix of YouTube tutorials and engineering blogs. It took a 12 months and a half of coding for 16 hours a day for him to construct the beta of Yellow Card, and he mostly did it himself.
“If something must be built, I’ll learn, figure it out, and construct it,” Poiroux says, with a touch of a Southern drawl. “Fairly confident this comes from my background as a farmboy from Alabama.”
Poiroux, who had been on a presidential scholarship to Auburn before quitting school, said he kept his off-campus apartment all 4 years in order that he could still get the faculty experience of going to bars and football games. His parents eventually got on board after he and Maurice landed their first $100,000 in enterprise funding.
Today, Poiroux runs his own fleet of 40 software engineers across 13 countries who’re answerable for keeping your complete operation going. His team is in command of every thing from patching bugs within the code to creating technical workarounds for nationwide web cuts.
“A variety of the infrastructure dependencies in Africa aren’t reliable and so you could have to construct lots of logic surrounding it that you simply would not necessarily, originally consider,” explains Poiroux.
In Zambia, for instance, it will not be unusual for the biggest cell phone network, MTN, to go down for 2 to 3 days. Prolonged network downtime means having to take care of pending transactions and bracing for more extreme edge cases. Third-party infrastructure dependency is one other big sticking point, particularly in relation to the provision of the network and the payment service providers.
Poiroux first went to Lagos in 2020, and he now makes it back to Africa every three to 4 months, rotating between Yellow Card engineering hubs in Kenya, South Africa, and Nigeria.
A part of what makes Yellow Card so convenient for users is its interoperability with existing banking options, in addition to alternative payment service providers, including mobile money. While the platform will custody crypto assets if users wish to keep their tokens on the exchange, only a few decide to achieve this. Poiroux emphasizes the undeniable fact that they’re really more the gateway to crypto.
Because the counter-party for all trades, Yellow Card also market makes on the exchange against African currencies, a feature which proves crucial in relation to reducing price volatility and fairly pricing assets.
“We’ll buy several million dollars a day value of naira,” Maurice says, referring to the Nigerian local currency. “We’re one among the few corporations that may actually tackle local African fiats.”
35-year-old Franklin Okoye, who works within the Nigerian capital, Abuja, earns a living by helping businesses to import goods like clothes and chemicals from China. Okoye says that he and other merchants use Yellow Card specifically since it offers “very competitive” market rates when he has to convert between tether and the Nigerian naira.
“We’ve got difficulty in Nigeria here accessing dollars to make payments abroad. So everyone seems to be in search of alternative routes of constructing payments,” said Okoye, adding that he swaps greater than $1 million value of naira for tether (and vice versa) on Yellow Card every month. “Everyone seems to be going to crypto.”
Beyond the remittance use case, many shoppers use the platform to hedge against inflation and currency devaluation by holding a few of their local currency in a U.S. dollar-pegged stablecoin like tether, in accordance with Yellow Card’s director of special projects, Oparinde Babatunde. He thinks that is an enormous reason why crypto’s latest bear market didn’t hurt their business — the necessity to protect against inflation has only gone up as governments all over the world began printing money through the pandemic.
Maurice tells CNBC that Yellow Card’s business customers are also using the platform to pay for expenses like their Amazon Web Services bill, and Poiroux added that they’ve seen a few of their retail customers earn money by informally day trading and trying to search out arbitrage opportunities between coins.
“We’ve got tons of people that use Yellow Card essentially as a full-time job,” Poiroux said.
Yellow Card CEO Chris Maurice and his
Chris Maurice
Spreading the bitcoin gospel
Nowadays, Poiroux spends less time within the weeds of coding. As a substitute, he devotes most of his waking hours to occupied with what comes next and the best way to scale the business specifically to satisfy the needs of the people for whom he built the platform.
“Our approach is — and this has been my approach on the technical side — to construct one solution, one platform — where we are able to quickly plug-and-play other functionalities,” Poiroux tells CNBC from Atlanta, where he’s working between visits to his production hubs in Africa.
“Think things like latest payment service providers, in order that we are able to scale quickly and make crypto as accessible as possible,” he said, noting that other crypto payment platforms have taken the other approach, hyper-focusing on big markets like Nigeria as an alternative of the whole thing of the continent.
Poiroux says that along with the retail-facing a part of the business, the enterprise side of the operation can be a significant priority. Yellow Card offers a Payments API that allows corporations all over the world to gather and disburse funds in Africa without currency devaluation risk.
“The super-cool part is that it uses the identical infrastructure as our retail platform,” Poiroux explains of yet one more project he architected and helped to code. “So if we expand our retail business, we are able to immediately make that available to the businesses which have integrated this service already.”
Within the meantime, each Maurice and Poiroux are spreading the gospel of bitcoin just about in all places they go. Last summer, as an example, Maurice advised Central African Republic on adopting bitcoin as legal tender.
Maurice and his Cameroonian lawyer were delivered to Bangui to satisfy with the minister of public works, who’s in command of the country’s crypto strategy. About halfway through the meeting, the electricity cut out, which meant no AC and no light for the rest of the conversation.
“We were in a dark room with no windows talking about how the country can be tokenizing every thing from their natural resources, to Makumba gorillas,” Maurice recalls.
The conversation didn’t miss a beat, because everyone on the table was engrossed within the conversation at hand — how other countries had been making the most of Central African Republic through currency controls for its entire history and the way bitcoin presented the country with its first real opportunity to find out its own funds.
“Bitcoin gives them a probability to manage their very own destiny — to maintain their money outside of foreign banks, in their very own country, to make use of how they see fit,” Maurice said. “It truly is financial freedom.”
Yellow Card CEO Chris Maurice together with his Cameroonian lawyer, Jonie Fonyam, and Central African Republic’s Minister for Public Works, Pascal Koyagbele.
Chris Maurice