The coin that will build a city: Could Akoin really help to revolutionise finance in Africa?

The turn of the year brought the surprise announcement that musician Akon had been given clearance to build his own cryptocurrency-powered city in Senegal. Akon City was set to be 100% driven by crypto and would be entirely eco-friendly. Today, Akon is ready to launch the coin that’s set to build the city: Akoin. 

Talking at Binance’s Off the Charts virtual conference, Akon and Akoin’s co-founder, Jon Karas, talked at length about the cryptocurrency’s potential for both Akon City and Africa as a whole. 

Akon has been outspoken about how the coin can empower Africans and empower people across the continent to overcome the drawbacks of national inflation, government carelessness and corruption and embrace using his stablecoin to gain more financial freedom. 

Because a number of fiat currencies in Africa experience heavy levels of inflation, notably including the West African CFA franc, which is used in eight nations across the continent, it can be hard for citizens to exchange their money or exhibit any form of spending power. 

Akon believes that Akoin will be capable of addressing this severe imbalance and with an internal conversion mechanism, the musician believes it will be easier for users to convert in and out of other cryptocurrencies and more traditional fiat currencies. Akoin will also be capable of conversion into prepaid cell minutes, which are often used as a form of currency across Africa. Significantly, Akoin will be launched alongside an Akoin wallet app, which Akon promises will help users to “learn, earn, spend and save.”

Expected to be launched on the Stellar blockchain, Akoin is set to launch with an initial coin offering in the coming weeks. 10% of the total supply amounting to as much as 45 million coins will be sold at a rate of $0.15 each. 

Paving The Way to Akon City

Akoin will help to build and run Akon City, a modern tourist hub that’s set to be completed by 2030 and nestled within an hour of the Senegalese capital, Dakar. 

Akon City is estimated to cost $6 billion to build, and ‘phase 1’ of its construction is expected to be completed by the end of 2023 - which would see the construction of a hospital campus, shopping malls, roads, hotels, a police station, a school, a waste facility and a solar power plant.

The development of Akon City will be closely monitored by the rest of the world. The project is entirely unprecedented on such a scale and the notion of building an entirely cryptocurrency-powered that runs on renewable energy is hugely ambitious. 

While countries like Venezuela have attempted to introduce a national cryptocurrency in a bid to control their own rates of inflation, Akoin will be launched in a continent that’s perhaps ripe for innovation.

With many Africans living without any access to financial services, and plenty of national and international currencies suffering from high inflation, the successful development of the Akoin powered Akon City could be exactly what the continent needs. 

Banking For Africa’s Unbanked

Akoin is listed as a cryptocurrency “powered by a marketplace of tools and services fueling the dreams of entrepreneurs, business owners, and social activists as they connect and engage across the rising economies of Africa and beyond,” according to the project’s website. 

Significantly, the arrival of a standardised cryptocurrency that’s accessible via app-based wallets could help bring financial inclusivity to the millions of Africans who are currently unable to gain access to banking services.

(Image: McKinsey)

According to McKinsey & Company, as much as 80% of Sub-Saharan Africa - some 326 million adults - live without access to formal or semi-formal financial services. 

While setting up banking accounts can be difficult in the region due to a lack of identifying documents or access to the relevant services, cryptocurrencies could offer a solution, due to the ease in which currency can be stored in personal digital wallets on mobile apps. 

The Libra project, spearheaded by Facebook last year, was designed to bring stablecoins to unbanked populations in order to help users deprived of financial access to build their wealth, exchange money and make purchases using an accessible currency that holds a pegged consistent value. 

The announcement of Libra was initially met with enough anticipation to boost the entire crypto marketplace, the stories surrounding both Akoin and Akon City have generally attracted much scorn from onlookers. While such a pie-in-the-sky project should rightfully come under scrutiny, after widespread abandonment for Libra, it would appear that Akoin may be closer to aiding Africa’s unbanked at the time of writing. 

Ten years is a long time for an idea as ambitious as building a self-sustained crypto city to develop, but in Akoin there may well be some hope for the future of financial inclusivity in Africa.