Regulators to Shut Down the Machankura Bitcoin Service

In August, South African software developer Kgothatso Ngako revealed a potentially groundbreaking service that could greatly enhance Bitcoin adoption rate all over Africa. The service named Machankura, which is a colloquialism for money in South Africa, allows traders with no internet access to buy and spend Bitcoin. However, according to the latest insider info, regulators are now, unfortunately, planning to shut Machankura down.

According to Caribou Data, 94% of all transactions made over cellphones in Africa are handled through SMS, and just 6% are done through apps requiring internet access. Interestingly, the number of cellphones that Africans own is twice the amount of the continent’s population. It’s just that those phones don’t have internet access.

Thanks to Machankura, cellphones using this service essentially functioned as Bitcoin Lightning network addresses. Apps compatible with the Bitcoin Lightning network could utilize it to send Bitcoin to Machankura users. The potential that this invention held in making crypto more accessible to Africans was recognized by six African countries, which were using Machankura up until now.

Bitcoin Lightning is a popular layer-2 crypto technology, allowing users quick and less costly Bitcoin transactions by moving the transactions outside the main blockchain. Apart from individual use, Bitcoin Lightning is integrated into platforms such as Twitter and even the government of El Salvador started using it after making Bitcoin a legal tender. But, Bitcoin Lightning is not without issues, including security vulnerability to fraud and hackers’ attacks.

The Machankura reveal was among the recent news pertaining to increased crypto awareness and adoption in Africa. For instance, this year the Central African Republic also adopted Bitcoin as a legal tender and has launched the Sango crypto initiative, introducing a crypto legislative framework, as well as plans for a crypto hub and a virtual crypto island.

South Africa itself is also working on a crypto regulatory framework, as well as planning to launch its central bank digital currency. Generally, things seem to be looking up for cryptocurrency use in Africa, despite the news of Machankura being shut down.