Ray Youssef and Crypto’s Role in Africa6 min read
Crypto luminary Charlie Shrem is joined by Ray Youssef of Paxful for a wide-ranging conversation on Youssef’s work building schools in Africa, Paxful’s mission to unite the continent through financial inclusion and crypto’s role in revolution.
This conversation has been abridged and adapted from Shrem’s Untold Stories podcast, found here. Here are the highlights, fit for print, of their hour-long conversation.
Youssef: I remember it was 2005 after Hurricane Katrina, I saw this picture of this American lady who didn’t even have shoes. She had to make her shoes from garbage and cardboard. I said this is shameful. How can we support this in a civilized country? So I took my bags, went to New Orleans. I got there the first day they were letting people back in and walked into a ghost town.
Related: One Man’s Mission to Deploy Solar-Powered Bitcoin Nodes Across Africa
I asked FEMA, the Salvation Army, Red Cross, everyone, trying to find people that could help. But no one knew a damn thing, it was the most disorganized effort you can imagine. No one knew anything except for five Dominican nuns I met. We helped rebuild the first school to open up in Old City, the New Orleans Cathedral Academy.
See also: From Ghana to the Bronx, These Teen Bitcoiners Are Building the Future
After we reopened the first school, the police and fire department could come back and that was like the official rebirth of the city. I looked at that and I was like, “Wow, one school can make a difference.” It stayed with me for a long time. Then, when we were in Africa I [had an epiphany]. It all started from there.
On crypto’s role in Africa
So our top route is China to Nigeria. We created that trade route four years ago and it was absolutely integral to actually solving the problems [we saw] when we landed in Africa. [When I said] bitcoin can help them, everyone said I was crazy because there’s no way people making $2 a day are going to invest in bitcoin.
Related: OKEx Taps Paxful to Provide New Fiat-to-Crypto On-Ramps
That statement is true, but there’s a lot of people in Africa who make a lot more than $2 a day. They’re young, they’re hungry, upwardly mobile and they’re not using bitcoin as a form of investment. They’re using it as a medium of exchange, and that is the narrative that we bring to the people. And they get it completely. They taught us everything about what bitcoin is actually good for.
It’s amazing what these young African entrepreneurs come up with if you give them an open-ended system.
Our mission at Paxful is to generate wealth, we want to make our users wealthy. We want to create wealth everywhere we go because that’s what financial liberation is all about. Africans have money; they just can’t use it. It’s easier for them to actually transport their physical bodies than it is for them to move their own money.
The truth is, the banking network charges an invisible tax upon nations. If you’re trying to move $10 million from Nigeria to Germany, the banks there will be like, “Ah, we already took $10 million from this bank in this country two months ago, we can’t put another one through.” They don’t [always] accept the money that comes in.
See also: Why Binance and Akon Are Betting on Africa for Crypto Adoption
Every single bank in the world has their own standards. It is the most fractionalized, balkanized, messed up and downright – in a lot of ways – racist [system]. Because it’s a blanket tax put on an entire continent, and these people are basically excluded from the monetary system. Bitcoin solves this.
On the Pax Africana
We call our 20-year plan Pax Africana, which is to connect the entire country intercontinentally. Number one … there must be seamless settlement with the network when you send money from one African country to another. Paxful already supports gift cards, online wallets, bank transfers. We have commissions with over 100 African payment methods and are set to add over another 100 African payment methods soon.
Number two, water. Number three, education. … That’s the trifecta of civilization, so we’re building these dams and wells across Africa. We built our first school in Rwanda. We let other people from the surrounding district come in and get water there and [are trying to] make this sustainable by charging a fraction of a penny for [a jug] of water, which is a huge deal for them. It’s sustainable and it’s changing the lives of people.
For example, one young boy got up and said, thank you so much for this well, I can go to school now. He spent six hours of his day fetching water for his family. Imagine having one of those wells in every district across Africa? We’d [contribute] an enormous sum to the African GDP by freeing up their eldest child’s time, allowing them to go to school. That’s the kind of power that we can have for people.
[People are saying] like, ‘Hey, I built my own little version of Western Union on Paxful’ and I focus on South Africa to Nigeria. It’s amazing what these young African entrepreneurs come up with if you give them an open-ended system. It’s why I say Africa’s going to rule the world, because there’s an army of these young people that are so brilliant, it’s amazing.
On civil rights protests
I’m not a political guy, I try to keep my nose out of that. Every time humanity is about to embark upon a golden age, things happen to slow it down and they happen in different ways in different places. I would caution everyone in the United States to not be reactionary, do not join the process, sit down and think about order. Do not react to the things that are happening now…
See also: Michael Casey – Money Reimagined: The Ongoing Crisis Is Stirring a Crypto Awakening in Developing Nations
I would encourage you to keep a cool head, do not be reactive, use the time to get to your spiritual core. This could turn into an orange revolution very quickly and that could be the destruction of the United States. As a proud American patriot, I really do pray every day that does not happen. Sometimes, to take a real stand you don’t have to do anything.
On the African franc
I was shocked and horrified to figure out a few years ago that the African franc is about as African as the Federal Reserve is. All the African francs are printed in Paris and the African countries have to actually pay the French for the right to use the money.
See also: Hyperinflation and Zimbabwe’s Multi-Currency Reality: Bitcoin in Africa Podcast, Part 2
The African franc is a monstrosity that has completely kept 14 economies balkanized and unable to grow. This is modern-day colonialism, modern-day slavery. I talked to some people who run these countries and they’re disgusted by it. They say, “It’s kept our country basically in chains for the past 80 years. Why can’t we change it?”
[Eventually we will see] young people starting their businesses, working around all these financial limitations, keeping significant chunks of their savings and earnings not in their local currencies, but in Bitcoin or cryptocurrency. Then these guys that have their bank accounts stuck in Paris might start to think, “If all these young people are doing it this way, maybe I can do it this way, too.”