
Cryptocurrency exchange Yellow Card has become the largest centralized exchange in Africa since its launch in 2019, with $1.75 billion traded to date.
Chris Maurice and Justin Poiroux are co-founders of YellowCard, who launched the platform in 2019 from their dorm rooms in Auburn, Alabama.
Yellow Card offers an experience similar to Block’s Cash app, allowing users to buy cryptocurrencies using fiat currencies, which they can then send across borders.
However, unlike centralized exchanges like Coinbase, where many customers store their tokens for extended periods hoping their digital assets will appreciate in value, the average customer on Maurice’s exchange holds money on the platform for five minutes.
“It’s really like this, I deposit a million francs in Cameroon, I buy USDT or BTC, and then I send it,” Explained Company co-founder Maurice in an interview with CNBC.
The exchange lets users send money to 16 countries on the continent. More importantly, the platform has streamlined the process of converting crypto back into local currencies on the other end of that transaction.
The platform has now become the largest centralized cryptocurrency exchange in Africa. With around 220 employees, Yellow Card currently boasts 1.4 million users across the continent.
In addition, the exchange has facilitated $1.75 billion in transactions since its launch in 2019. According to Maurice, the platform typically facilitates around $5 million in transactions on a good day. On slow days, it’s closer to $1 million.
With all its success, Yellow Card is currently worth $200 million. The company has also raised $57 million in funding from investors including Jack Dorsey’s Block and Waller Ventures, the venture capital firm co-founded by Peter Thiel.
However, Maurice aims to turn Yellow Card into a billion-dollar company by expanding the service to the rest of the continent. “I realized very early on that there is a lot of opportunity in all these countries and we need to be the first to get there,” Maurice said.
“I drove from South Africa to Botswana, Zimbabwe to Zambia, then flew to Ethiopia, Ghana, and Uganda. In all these places, I was doing grunt work—things like company registration and opening bank accounts, so that we could Be ready for.”
Crypto offers hope for Africa’s broken banking system
Part of the surprising success of Yellow Card can be attributed to problems with Africa’s banking system, which has led to an increase in crypto adoption.
For example, the continent has a semi-colonial payments structure, with about 80% of cross-border payments originating from African banks processed offshore, mostly in the US or Europe, which translates to higher costs and processing times. Does what is sometimes measured. in weeks.
“The whole banking system in Africa is completely and utterly broken, even among mobile money providers, telecom companies,” said Ray Youssef, CEO of Paxful. Another issue, he said, is that payment operators are not connected in the continent.
“Two thousand payment networks and only 2% of them talk to each other. That number just keeps growing. It’s not getting better, it’s actually getting worse.”
This creates a huge opportunity for crypto to come in and fill the gap presented by the traditional banking system, especially since crypto payments facilitate effective cross-border transactions that take place in real time.
“Everyone is looking for alternative ways to pay,” said Franklin Okoye, a Nigerian national who makes a living by helping businesses import goods such as clothing and chemicals from China. “Everyone is going to crypto.”