Huawei unveiled its new Mate 40 smartphone on Friday that for the first time comes preinstalled with a built-in e-wallet that uses China’s digital yuan or cryptocurrency.
Although the Mate 40 will go on sale in most of Africa’s largest consumer markets including South Africa, Nigeria, and Kenya, it’s unlikely it’ll be that popular given that’s it both very expensive at almost $1,700 and that it’ll also be missing Google apps that are very popular among African consumers.
But the device itself is less noteworthy than the fact that it comes with the digital wallet built into the hardware. This can provide a higher level of security than using an app or web service. As is often the case with new technology, these kinds of innovations are first introduced into flagship products like the Mate 40 and then very quickly trickle down through the rest of the product line.
It’s important to remember, though, that the cryptocurrency itself is not actually a Huawei product. It instead comes from the People’s Bank of China, the country’s central bank. Now that Huawei is pioneering this integration with its hardware, Transsion and other Chinese phone makers will likely follow suit.
This is why it’s so important for Africa, where no cryptocurrency has yet emerged as a standard. Given China’s dominance in both the network infrastructure and consumer device markets on the continent, Africa is well positioned for the rapid adoption of China’s digital currency.
Just to be clear, this doesn’t mean that one day soon African consumers will be using some kind of digital Chinese yuan to pay for products at the local market. No. All transactions would still be conducted in local currencies, just using China’s e-wallet technology built into the phones.
Why is China’s Cryptocurrency Important For Africa?
- BACK DOORS: Unlike most other cryptocurrencies, China’s e-wallet contains back doors that would allow the government to monitor transactions. Chinese officials contend that it won’t be easy to do, but they acknowledge that it is nonetheless possible.
- FACILITATING TRADE: With the AfCTA coming online soon, Africa is about to embark on a new era of intra-continental trade that will be helped enormously by the use of digital currencies. Currently, it’s often complicated to convert many African currencies and more expensive to do business in dollars. Whichever digital currency emerges as a standard could become very important to facilitate cross-border trade.
- UNHAPPY U.S.A.: “If China’s digital currency gets significant traction on the African continent, the U.S. will view this as a matter of national security,” warned Kenya-based blockchain and cryptocurrency expert Michael Kimani.
- CHINESE STANDARDS: Shenzhen-based Transsion is the dominant device maker in Africa for both feature and smartphones. It’s highly unlikely that a Chinese company like this would integrate U.S., European, or Japanese cryptocurrency functionality into its hardware. That’s partly why Facebook’s failed Libra cryptocurrency experiment never stood a chance of success in Africa. Transsion probably wouldn’t embrace a technology that officials in Beijing find so objectionable.
- The Block Crypto: Huawei rolls out new smartphone with a built-in hardware wallet for China’s digital yuan by Wolfie Zhao
- 8BTC: Crypto Interest Rising Between Africa, China by Olusegun Ogundeji
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