M-PESA Africa has announced a strategic alliance with the Abu Dhabi-based ADI Foundation to incorporate blockchain technology into its platform.
The agreement, announced on Monday, intends to usher in the next phase of mobile money by offering institutional-grade infrastructure to more than 60 million monthly active users in eight African countries.
The partnership will see the ADI Chain, a high-performance Layer 2 blockchain network, deployed across M-PESA's operations in Kenya, the Democratic Republic of the Congo, Egypt, Ethiopia, Ghana, Lesotho, Mozambique, and Tanzania.
Since its founding in 2007, M-PESA has been among the leaders in financial inclusion.
According to the two partners, their new collaboration will continue on that history by developing digital rails for individuals and small enterprises in emerging markets.
"M-Pesa has been amazing in terms of financial inclusion," said Huy Nguyen Trieu, council member on the ADI Foundation's board of advisers. "Our view is that we can push it further again by providing the right digital infrastructure, both for individuals and SMEs. The foundation's infrastructure can act as the building blocks to accelerate digital transformation."
Sitoyo Lopokoiyit, CEO of M-PESA Africa, a joint venture between Safaricom and Vodacom, expressed optimism about the technological leap saying, "We are excited to partner with ADI Foundation to tap into their expertise around new technologies and how these can transform financial services."
One of the most significant impacts for users will be the overhaul of international transfers. By leveraging blockchain, the partnership intends to slash settlement times and reduce the high costs typically associated with traditional cross-border banking.
A key feature of the rollout, expected to begin this year, is the introduction of stablecoin-based transactions.
The network will support a UAE dirham-backed stablecoin, regulated by the Central Bank of the United Arab Emirates. This will allow M-PESA users to hedge against local currency volatility and participate in global commerce with greater price stability.
The ADI Foundation, which is backed by Sirius International Holding (the digital arm of the $240 billion UAE conglomerate IHC), described this as its most significant African partnership to date.
It aligns with the Foundation’s ambitious goal to on-board one billion people to blockchain technology by 2030.
"African markets have demonstrated a massive demand for digital asset infrastructure," said Nguyen Trieu. "Our view is that we can push financial inclusion further by providing the right digital infrastructure for both individuals and SMEs."
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