Unchained - Crypto and Fintech Are Colliding. Who Wins, and How? - Ep. 856

Episode Date: June 24, 2025

Take the Unchained 2025 survey! unchainedcrypto.com/survey ------- Cross-border payments. Mobile money. Stablecoins. Crypto. Elizabeth Rossiello has lived through every cycle, not from a trading desk, but the front lines of African markets. Now, the founder of AZA Finance is selling her company to global fintech giant dLocal, a signal that the line between crypto and traditional finance is blurring fast. In this episode, she talks about: How stablecoins are powering 24/7 commerce in emerging markets Why new entrants keep failing to gain traction And how liquidity, not tech, will determine who wins this new game All that, plus the inside story of AZA’s journey from a Nairobi-based Bitcoin exchange to one of the most important fintech players in Africa. Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Bitwise Human Rights Foundation Xapo Bank Elizabeth Rossiello, CEO and Founder of AZA Finance Previous appearance on Unchained: BitPesa's Elizabeth Rossiello on Necker Island Links dLocal announces intention to acquire AZA Finance to strengthen AZA Finance: dLocal announces intention to acquire AZA Finance to strengthen presence in Africa and expand capabilities Bloomberg: Uruguay’s DLocal to Buy AZA Finance in Africa Push American Banker: What experienced payment execs can pass to a new generation The Startup Leap: Building A Remittance App for Africa’s $1tr Market | Elizabeth Rossiello | Aza Finance Jack Zhang of Airwallex tweet saying he doesn’t see “a single use case” for crypto Timestamps: 🎬0:00 Intro 🌍 3:30 What Africa’s early payments scene looked like and how Elizabeth launched the first Bitcoin exchange there 📲 10:54 How the continent’s payment rails evolved 🔥 16:15 How Western Union dropped its pricing after her company launched 💸 20:42 Why stablecoins became a game-changer for cross-border payments 📊 25:24 What the real volume drivers are 🌐 28:53 How crypto adoption in Africa shifted post-COVID 🤝 37:00 Why AZA decided to acquire two companies ⚠️ 38:46 How the FTX partnership hurt AZA 💼 41:37 How the dLocal deal came together behind the scenes 🔄 45:08 Why crypto and fintech are on a fast path to convergence 🏁 50:58 Which players Elizabeth thinks will win in the new payments race 📵 53:47 Why “mobile money” is still tough competition for crypto 💥 56:48 How USDT has an edge in emerging markets 🇨🇳 58:50 How China’s deep ties to Africa have shaped the game 🚀 1:01:37 What it’s been like to build AZA as a young woman founder in crypto Learn more about your ad choices. Visit megaphone.fm/adchoices

So you see tons of startups now. There's this tech event we were at in April, the Africa Tech Summit, and it was hundreds of companies and half of them were involved in crypto in some way. And that was before stablecoin summer. So that was like the precursor, you know, kind of see the trends happening in Africa that later hit the rest of the world. And everybody was there. And it was just wild to see.

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Today's guest is Elizabeth Rosiello, CEO and founder of Asa Finance. Welcome, Elizabeth. Thanks for having me back. I know. You were the first guest ever on Unchained nine years ago. Wild. Not long to have you back. But the timing is so fortuitous.

You've just announced that pending regulatory, approval, your company will be acquired by your Gwain payments provider, D-Local, plus StableCoyne summer. And we're in this moment where FinTech and crypto are kind of like all competing in the same space. So this is like the perfect time to have you back. So wild. It feels like a different planet than when we first talked, right? I know. Seriously, I listened to the first episode and it's so funny because you talked about how at that time people, like when you started, that people would make international payments by sending somebody to like, let's say they wanted to make a payment to China. They would literally send a person with bags of cash to China. Yeah. No, no. And like when

Barry Silbert sent me his first investment, he had to send me a check because there was no wire to go through. And then I got a DHL check called the Bitcoin Opportunity Court. And my bank then sent it back to the U.S. from Kenya to verify it. And I was like, this is madness. Like, like so wild. So wild. Yeah. I mean, so just just paint a picture a little bit more for us of like what the African payment system was like or landscape was like back then. And then we can kind of go through all the changes because I almost feel like in a way you've been through everything that like the U.S. is like kind of starting to go through now, which is sort of fascinating. But yeah, go ahead and start with what the beginning was like. Yeah. Thanks for that.

I mean, you know, we always joke in the Africa Fintech space that people outside the space say, Africa leapfrocks, everything else. Like, we hate that word, you know, or it says like, you know, you never had traditional infrastructure there. It was just a blank canvas. And then in comes technology. We're like, uh, I don't know if that's true. You know, so I don't know how many investors or journalists have used those terms. But when I moved to Nairobi, Kenya in 2009, it was two years. to Empesa, which was the telecom innovation that really kicked off. There have been lots of telecom

innovations, but that mobile money of Empesa just changed the world. And it took off so successfully in Kenya for a variety of reasons, including government support, a luck of competition, perfect timing in terms of the Kenya Tiger economic growth story that was happening at the time, the growth of the middle class. So many things were happening to make this just, you know, Empasa time season. And I arrived just as that was kicking off. There was a ton of research from around the world, development agencies, private companies, investors. Everybody was like eyes on Kenya watching that work. And still 15, 20 years later, you go to any digital conference on Africa. And they're like, the first thing they say, I said, did you know about Impessa? It was just a really once in a lifetime opportunity.

And there was an IHub, like a tech hub, downtown Nairobi in Kilimani. And Google was a sponsor of it. And it was like the first little Silicon Savannah situation, right? And it was like 20 people, 30 people is very small. There was a coffee shop. If you went there, you saw the same people every day. There was a couple of cool little code academies. There was like Akira chicks and some like some Ruby guys, Ruby and Rails guys were down there. You know, it was like very, very early. And we had a Bitcoin meetup. And it was like me, my co-founder, Charlene, and like five people, like Pelle Brandegarde, who, you know, says like on his, yeah, I think you might have been a vast tier. He was an OG and then a bunch of like crazy guys. And it was just a smorgasborg of a dozen total OGs. And we started from that. And somehow when we started the company and I reached out to Barry Silbert's brother on LinkedIn and he started investing and a friend wrote a piece in Bloomberg and they started investing. And we started BitPasso, which was the first Bitcoin exchange to trade crypto in Africa. the first Bitcoin Exchange in the world to connect directly to mobile money.

And the first, as far as we know, crypto exchange run by females, me and Charlene and later, Amy. So it was really just like the absolute first. And Barry Silverert finds out about us. He's like come pitch to me in New York. He sends us money. A little bit later, the Pantera guys find out about us. Blockchain Capital finds out about us. And most importantly, Joe Machiero, who then went on to become the cabinet minister.

And at that time was the head of Google Kenya, finds out. And they invest. This is like November 2013. And I'm sorry. So you said that you arrived in Kenya in 2009. And you were doing, I think, like microfinance at that time. Yeah. And then so what year was it that you found out about Bitcoin?

2013. So for five years, I was working in microfinance. And what does that mean? That was like the first version of FinTech. It was using mobile money to deliver banking services, most of it. And sometimes it was very manual like in Ethiopia. they would literally use manual calculations for hundreds of thousand client branches. And in some places like Ghana or Tanzania or Uganda,

they were like very much using MTN's mobile money or Safaricom's impasse. And my co-founder, Charlene, had also been working in the space with like asset financing for a lot of water irrigation and things like that. And we were just like working in the field, going to the middle of nowhere, meeting with like Fisher women and agricultural and livestock, sitting in all sorts of houses in Botswana, in Malawi, in Ghana, learning about how this technology was revolutionizing the way to bank the unbanked. And so I've been really working in the field for five years doing that, writing a lot of research, talking about how a lot of these

programs were working and they were efficient and the metrics were there, but the source of capital because they were lending, right? Microfinance is just on lending was coming from global donors who were lending in hard currency. And how do you take a loan in another currency than the one you're when you're operating in. And I always say, like, if the shilling is sliding against the dollar, how the heck are you going to pay it back? And this became a topic that I was writing a lot about in my reports and I was talking about. And I was focusing a lot on that. And when I was introduced to Bitcoin in October 2013, I was thinking this would be a way to create kind of liquidity between currencies. And maybe we didn't need to always go to hard

currencies to lend and to finance local financial institutions. Maybe we could start to trade directly in shilling. Maybe we could use Bitcoin as a way to trade between shilling and Naira or shilling in South African and RAND. And maybe we could use it as a way to make doing business across border easier because a lot of the companies I worked with would be working not just in Kenya, but also in Uganda and Tanzania and Nigeria and Ghana. And there was no way to make payments across Africa. And it was so amazingly sexy and fast to make a payment in Kenya with them. Pesa. I think because we could touch lightning and we were like mobile money is so good. I never took my wallet anywhere. I could buy anything with mobile money. I could pay for a school fee, a plane ticket, a single tomato.

And when my parents or my family would come from New York, they'd be like taking out their wallet. I'm like, put your wallet away. I already paid. We were living in the future. And so to go back in time to do an international payment seemed bizarre. Why wasn't anybody figuring this out? And then layering it on top of, where are the local currency markets and trading and all those things kind of coming together give us the idea for the company. And, you know, I think once I started connecting with the USVC guys who were starting to get into Bitcoin blockchain, they were like, let's invite this lady to Necker Island. And that's where I met you. And I'm like, talk to my board. I'm like, guys, I'm, you know, working mom with a startup. I'm like 31 living in like suburban Nairobi. And they want me to go to the

Caribbean. And I had to ask special permission to get over there. And when I got over there, I met all these like Silicon Valley people and other people creating exchanges around the world. And they were like, yeah, you're not alone. We're actually doing this kind of work in all these different regions. And that really opened up my eyes to the global community. And it was very welcoming to me in a way that the regular venture community was not. And I found that pretty cool. I found like the personalities in the early days of crypto were very inclusive. And everybody was excited to work in an emerging market, which is not the case when you were dealing with venture investors at the time working in other space. So that's how I met you. And then you pitched

me on this during this experience. And we did the first podcast. And so as you mentioned, initially you were using Bitcoin to connect. So basically, you're using Bitcoin as sort of like the middle technology to help people who were, you know, like in Canada or whatever, make a payment to Kenya or something like that. Exactly. Do it much more cheaply because the rails were like kind of expensive. So that's. Yeah.

So explain kind of like how that evolved over time because obviously I'm sure now it's like more like stable coins. And I noticed you have all these other fintech options as well. So just tell us kind of the evolution of like how you. Yeah. So in the very early days, I was still paying back my student loan, which seems insane. And I had to pay it to Citibank and dollar. And I was like, how do I make this payment?

And then I would try to send a wire from Berkeley's Kenya. And, you know, they'd call me in the middle of the night to verify. It was really difficult. So the first thing we were like, well, let's sell Bitcoin to Kenyans. And then they could sell the Bitcoin in the United States or in Canada or in Europe and make payments. And at that time, there were some really cool fast crypto exchanges, which we let you pay directly into a bank. That got taken away a few years later. But at the time, it was really cool.

So a lot of my friends in my community, international living, in Kenya, we're like, cool, I'll buy the Bitcoin and then I'll make a payment into my European bank account or I'll pay into a city bank account. I could pay to Canada. So that was our first set of customers. Then a lot of Kenyans who we met through this IHub were like, well, we want to do it to invest and we want to do it to pay Asia. And we want to do it because we like other coins and we're launching things. And we're like, okay, great. And then we got into that community. So it went from, started out with international payments. Then it went into, you know, the crypto economy and how do we onboard people into other crypto?

And, you know, as we grew, I think we were one of the first people to Jeremy Allaire when I grew into Nigeria was helping me cash out payments to Harvard because we had a Nigerian paying for Harvard tuition for his daughter, like 3040K. And so Jeremy's like connecting to the banking system in Boston for us. We were sending crypto for that. So, you know, it kind of evolved. But then what we really realized is that what I said in the beginning, it was how do we make payments between African countries and we realized there wasn't a crypto exchange in Nigeria.

And we were the crypto exchange in Kenya and we were the crypto exchange in Nigeria. So did we actually need to send crypto back and forth or could we just pool? And so then we started getting into pooling funds where we actually don't need to send crypto to ourselves. And then we were like, well, let's just start selling FX. And sometimes they want Nigeria and Naira against Kenyan shilling. Sometimes they want Bitcoin. And we're going to treat it as an equal.

And then I started speaking globally that we don't want to create. crypto companies. We want to create companies that can use crypto. And this is a big difference because a lot of people would start a company and say it's a crypto company and then look for a use case. Here we had the use case and we even included Fiat because it was more helpful at the time for some of those flows. And to this day, as we grew, we trade all these currencies around the world, you know, over 150 currencies around the world. We're still crypto-native and we choose to use whatever currency our customer wants. And more importantly, our risk controls, our technology, our knowledge base across the company includes crypto. So we're just going through this transition process with DeLocal.

And often they say, where's your crypto team? And we say, we are the crypto team. Every compliance person at the company understands crypto. Every trader knows how to trade it. Every on boarder knows how to onboard it. And I think that's been a very interesting differentiator for our company because when you're working in the. in the field. And when you're working in emerging markets and you're an operator and your building, it became very natural. It wasn't as if, you know, I woke up one day and said, I want to work

in the field of crypto. I said, I want to solve the problem of how to do cross-border payments and how to trade local African currencies. And crypto is a means to an end. And it's hard when I see like Jack Sang or somebody from Meriwalik say, there's no use case. There are a lot of use cases. Yeah. And just talk a little bit about like, because I mean, I know we cover. this in the first episode, but I'm assuming people may not remember it if they listened to it back then, but also it was the first one, so maybe not that many people listened. But just walk through kind of like what the traditional payments providers at that time were charging and like the difficulties that people had using those. And then how, you know, this was like so much different and kind of what your

prices were versus. Yeah. Yeah. Well, we were right at the time when it was becoming part of the SDG development goals, a sustainable development goals of the UN to lower the overall cost of remittances. And at the time, the average cost of remittance in Africa was twice, two times more than in Southeast Asia and South America. So it would be like two to four in those regions. And it would be more like four to eight, even above 10 percent in some African markets. And I could speak for 10 podcasts about why that is. And you can read a lot about the monopolies that some of the traditional remittance companies held or the fact that a lot of the international wires would go through just two global banks, element banks, Deutsche and Stand Chargers. at the time. There's a lot to talk about how the monetary policy and the banking infrastructure

was created in sub-Saharan Africa to lead us to that point where there was a lot of high friction. And when we started, the Bloomberg article that was written about us, month of one, said, Western Union killer. And, you know, that was a goal at the time. And Western Union lowered their price because of it. And we were like, wow, it was almost intoxicating how powerful we felt as a startup like, hey, people are nervous about anybody shining a light into this dark corner. And we're just a tiny peanut. But wow, it was empowering, maybe too much so, gave us a lot of hubris like, yeah, we're going to go change the world. But that was pretty exciting. And now 13 years later, there are a lot of copycats of the Pesta. And now Azzo, we changed the name over time

to reflect a more wider African brand instead of Pessa, which is an East African word. And there's a lot of copycats. And, you know, great, welcome. Welcome them in. I mean, when you look at the trading hubs of Hong Kong and Zurich and London and New York, there's a lot of asset managers. There's a lot of brokerages. There are a lot of prime brokers.

A lot of trading floors. They're all needed. And we need that same level of development in all of the African capitals. We need multiple brokers, multiple providers that can only increase competition. Now I'm speaking as someone passionate about the region. As a founder, you know, I would. want market dominance. But I think as somebody passionate about the region, I want development. And over time, like, how did you decide which African markets to expand to? And like, who were

the customers you were noticing in the different regions? Well, obviously, at the time, the biggest buyer of African currency were remittance companies. It was like $34 billion that was coming into Africa. And remittances at the time, full remittance volume now in Africa, just good willingness quick so I get it right. I think it's over. Yeah, 500 billion. So, I mean, it was really huge growth in the last 13 years. And at the time, that was still very juicy for us. So we were like, we want to get a piece of that remittance because they're the ones buying the African currency. And then we had a lot of corporates selling the African currency. Originally, the first year, we were doing retail. And then we realized we don't have the marketing budget

to do retail. So let's go up. And when that first customer sent, the payment to Harvard of $35,000. We're like, wow, that's, that's way better than a $5 customer. So how do we, how do we move up and go wholesale? And so we started working with remittance companies. And our first real big win was a publicly traded remittance company out of the United States. I won't give their name. And they came in and they launched Nigeria with us. And unspanones to their board, the treasury team would pay us in Bitcoin. And it would settle in Nigerian Naira. and like we were using Skype and they were like wow your rates your speed of settlement this is amazing and the product you know took off of course they're never going to say that on a shareholder call

this was years and years ago like 2015 2016 and we were really just like wow this really works and over time our compliance got better we got licensed in the UK licensed in Spain we bought companies with licenses we expanded to Nigeria which was the biggest remittance market at the time we went to Ghana which is another big remittance market we looked at the market we looked at the markets where the remittance market was big and where it was easy to build into the banking infrastructure for settlement. And that's how we first started expanding. And then Nigeria had a crazy period where they were unfriendly to remittance and FinTechs during a certain political period. And so we said, let's go into Francophone Africa. That's not penetrated at all. And we were

one of the very first FinTechs to go into Francophone Africa. And we launched Senegal in 2016. and very early in the space. And now Senegal, Weimu region, the whole West African region, as well as Cameroon and Semak and the Central African region, are some of the hottest areas to Fintech. So again, now there's like, I had a call this morning. We're like, there's so many brokers and so much competition, which is a beautiful thing to see, right?

And I think when we started, there was literally nobody. And we just, I think, had one or two remittance companies. Now we have 35 of the largest remittance companies, including Western Union and Moneygram who trade with us. And most of them don't trade crypto or stablecoin. Some of them do. I won't share who does and who doesn't. But a lot of our corporates on the other side buy stablecoin.

And that's changed over the years. So, yeah, talk about that shift like when you went from Bitcoin to, I'm assuming it was next stable coins. Like, what was it? Yeah. When did you do that and why? And how did it change business for you? The demand in the beginning was mainly Bitcoin and Eats.

We didn't have a lot of demand for other smaller coins. A lot of customers would come to us to enter the space and then go on other global exchanges and do day trading, whatever they were doing. We were kind of like an entry point for them to just get out of their African currency and into crypto or vice versa, sell their crypto and get a great rate. And you need a lot of liquidity to make that feasible. And so we would stick to the main coins. Every now and then, there would be like a year where another coin was popular.

People would ask for it. We would sell it. But really, we stuck to the ones that had the most liquidity. And then, I don't know, four or five years ago, people started asking for USCT. So we started selling it. And then 95% of our crypto volume went into stable coin. And it was a bit of a surprise because we're like, why do you guys think this is more stable than other crypto currencies? You know, the jury's still out on that.

But apparently people think it's better or safer. No judgment. I just, you know, listen and I don't judge. But when you say that, are you, what are you talking about? Are you talking about like a reserved back currency has the risk of the central provider? Are you talking about like things having to do with the U.S. central bank? Well, I just think that like it's a private coin, right? And just like for a long time it wasn't regulated.

So, you know, and how is, yeah, I guess I would say that I was a firm believer in, Bitcoin's safety and stability in the beginning. And so I was surprised that people thought a stable also owned by a private blockchain was more stable or, you know, 10 times more stable. And companies that would laugh us out of their office, talking about one would be very excited to use the other overnight. I just didn't really understand that. But in any way, I think the marketing was a lot better and people really adapted to it better. So, you know, no judgment. It's what the customers wanted, we started selling it, and now we see a lot of demand of that. And even now on the remittance side, which were the last people standing to welcome this technology, except for that

one early adopter, we're now seeing a lot of people say, yeah, it's easy to trade with this on the weekend, on a Friday, it's Ramadan, and we have huge volumes, it's a holiday, and it's like Memorial Day or Labor Day and the dollar is closed. You forget that over a weekend, when the U.S. banking system is closed, companies need to take a credit risk, a two-day risk. risk or a three-day risk, that there's a holiday even longer. And if you have a slow banking system, like we do in some markets in Francophone, West Africa, where it might take 24 to 48 hours to settle domestically, that adds another two days. Who's pre-funding that? That's, you know, that's a whole other financial system problem. And so things that can settle 24-7, which is the way the world works.

I mean, we say 7-7 in China, right? And, you know, also in Africa, people work seven days a week. So, you know, I was on stage at Money 2020 a few years ago and a very prominent CEO of a Fintech said, only a legal activity happens on the weekend, Elizabeth. And I was like, yeah, she just probably named him. But, you know, no, markets are open, you know, things trade. And we can't be bound by like 2 p.m. cutoff time. I feel like I'm learning things about the world because I did not know that in Africa and China, they work seven days a week. I lived in Indonesia. I remember in that in that country,

they worked six days a week. But I was not aware of these things. Yeah, you can settle in Nigerian banking system settles 24-7. Oh, interesting. Okay. So, but okay, so, but I guess you're saying, so in Nigeria, they, they do that, but then like other parts of Africa, maybe they're slower. So it's like even just within your intra-African business, you are dealing with like different kind of lengths of seven times. I mean, the banks might not be open all day. I mean, they definitely open on Saturdays. And a lot of people go to the office on Saturdays across Africa. I would say in East Africa, for sure, they go to the office at least a half day on Saturday sometimes, many markets. But also people do business meetings on Sunday. It's not like people are golfing all the time, you know, on a Sunday. Yeah, people are working on the weekends and remittances are for celebrations sometimes. And celebrations happen on the weekend and holidays happen on the weekend. So people send a lot of remittance over the weekend.

So, you know, there's a lot of business happening on the weekends. Okay. And then so I'm sure that these numbers kind of shifted over time, but what kind of was like a more typical breakout for remittance versus like B2B? Like what, you know, how many different types of payments were you doing? So we balance out, right? 50% are buyers of African currency. 50% are sellers of African currency. So remittances have only ever been the buyers of African currency.

There's very few remittance companies that are successfully sending money out of Africa. There's a couple of exceptions where they might be sending cross-border intra-Africa. But generally, we had 50% of our business were remittance companies, and 50% of our business were corporates, including other FinTech, other crypto exchanges, banks, FMCG companies, you know. that has evolved over time from being traditional corporates to now being a lot more fintax and a lot more banks. And that's been interesting to see the evolution of over the last 13 years. But the inbound is still mainly remittance companies. And now we've added a couple of payment companies as well that have come in. And I think when you see things like the Circle Payment Network or, you know, previously it was, you know, other payment networks that wanted to channel remittances.

A lot of them started, a lot of them got excited, but they weren't really able to onboard the companies. So the network might have been beautiful, but nobody was driving on that road. So something different about us is that we actually transact this remittance volume and we have these companies onboarded. And I think it's hard if you're going to build an intermediate network and say, hey, everybody, go on my network. Well, why would we?

We were already working with those companies. So I think a big use case that people say about remittances or, you know, I'm going to launch this network, the stellar network or something like this and everybody's going to use it. Yeah, but then you have to go in one by one when each of those clients, onward them, have good rates, have good servers, have a good API, and insert yourself as an intermediary. So I think there are a couple companies around the world that have done what we've done. BITSO, for example, was working in parallel to us at the same time in Latam in almost like a parallel universe. And they've been very successful doing that. And there are a couple others around the world as well who've been directly integrated into these companies. And so, you know, just back to the stable coin thing, I did want to ask, like you said people were requesting UST.

Were they requesting it on certain chains? Because obviously, you know, UST has moved from like, or it's just added additional chains. But is that something that you're just doing on the back end, you know, based on like fees? or is that something where people themselves are requesting which type of UST? I don't have a smart answer for this. I think it's evolved over time. I think it's basically just very vanilla, like the basic ERC chains. Like nothing, we haven't seen a lot of variety.

I think most of it clusters around the same exchanges and the same way out. And so I don't think we see a lot of going down the list of innovation. You know, we see, you know, the same. three wallets or the same three exchanges pretty much often. I think, you know, people who are day trading or people who are investing in new technology tend to lose the fact that actually most of it, most of the volume clusters around the same thing. And I know a lot of people don't want to hear that, but that's actually the truth. Okay. And so generally like over this time, because now we're basically talking about like an over 12 year period from when you launched to now, like generally,

how would you say crypto usage in Africa has changed? Not a lot. I mean, yes, we've moved from Bitcoin and a little bit of ETH to now USETU or an ERC 20 wallet. But like we don't see a lot of other wallets requested and people seem to be fine with it. And I don't think people care as much over which wallet because they're transferring the value pretty quick. Oh, okay. Okay. But I just mean like from, but like I just mean from being in Africa like not necessarily.

your business, but like, are you noticing just like, oh, yeah, yeah, of course. Like, now you fly into Lego's airport and all you see are FinTech and crypto signs everywhere. And, you know, there was a big banner that's like, crypto is legal. It's not legal in some ways. But, you know, like you see your whole airport had a finance advertisement on it when crypto was illegal in the place. They didn't care. They just covered the airport in this gigantic sign. They even sponsored like American Idol, Nigeria, Nigerian superstar. sponsored by finance. I mean, that was a wild time because it was like everybody was coming into this space. And like a lot of crypto companies have come in and said, you know, I'm the only regulated

company or I'm the only one in this business. There's just a lot of claims and not a lot of knowledge and a lot of investment flows come in. So you see tons of startups now. There's this tech event we were at in April, the Africa Tech Summit. And it was hundreds of companies and half of them were involving crypto in some way. And that was before stablecoin summer. So that was like the precursor, you know, kind of see the trends happening in Africa that later hit the rest of the world. And everybody was there.

And it was just wild to see. And we were, you know, one kilometer away from the coffee shop where we used to have our Bitcoin meetup. And it was just, you know, I felt like a grandma, like crying at my kid and my grandkids, you know, nursery school graduation. I was like, this is beautiful to see this huge blossoming. And, you know, my team was there. We were kind of like slowing down.

We knew the deal was happening. And we didn't want to tell anybody. Some people knew. And, you know, they didn't have tickets to some event. And we go to, like, get in to this event for a crypto exchange. And we're on the line. And we're like, can you believe there's a line to get in? And someone's like, oh, yeah, we know her.

The crypto lady. Let her in. I was like, I don't know whether it would be proud or, like, offended. And then my team was like, yeah, we're going to this. lame, this lame party, you know, but it was just so funny because none of that, none of that was in Nairobi back in the day. And it's just gotten so big. And I think a lot of what I'm hearing from, like, Nigerian banks is like, how do I get into this? How do I offer that? So just a completely different planet that we're living on. And was that era like when it kind of really exploded? Was that

like the 2021 era or? I would say after COVID for sure. It was just like, oh, okay. PC pre-COVID. And after COVID, AC, you know, big difference. I think during COVID, companies that were digitally savvy took the whole market. And we had one of our best years and a lot of brick and mortar banks suffered. And a lot of wallets that were not telco-based. So, you know, not connected to SIM cards were the ones that were soaring. And so you had a lot of payment companies doing domestic payments like flutter waves, chip or cash, things like this.

wave wallet that came in that are not based on a SIM card. And that was the first time those big companies got huge investment. They scaled and they kind of showed the telcos that they could leapfrog. I'll use it there leapfrog those oligopolis, which is what they were. And it was exciting to see. And then, you know, we never really did a $300 million raise or like a huge thing like that. I think those were reserved for retail payments, which is, you know, a very different game. Takes a lot of money to run it, you know, earns a lot of money, but spends a lot of money.

We had a different business model and really stayed in that B2B space. But I think that's when we saw a couple of those unicorns go. Some of those have gone bust, but at least it happened where they like did those moonshots and came in. And now I think you see a lot of regulators finally issuing. some licensing. So South Africa, which is usually the first, came out last year, issued 50 exchanges, licenses, which was great. Nigeria, after a lot of talk and 10 years of white papers, finally licensed two companies, not the companies you think. If you actually check, it's like two companies, nobody's heard the name of. So a lot of the companies that say they're legal in Nigeria don't

actually have those licenses. And we're now seeing the VASP license in Central Africa. And so So it's not open space. It is a regulated space. And I think that's great for the development of what's to come. So in a moment, we'll talk a little bit more about Elizabeth's journey. But first, a quick word from the sponsors who make the show possible. Hi, I'm Matt Hogan, CIO of Crypto Asset Manager Bitwise. Look, crypto can be confusing.

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it gives institutions like JPM the scalability and compliance rails they need without jumping into Wild West territory. To have your comment featured on a future episode of Unchained, please write a review or leave a comment on YouTube, Farcaster, or X. Back to my conversation with Elizabeth. You quickly mentioned that you acquired two companies along the way. It seemed like you were implying you did that to obtain licenses. Is that, yeah, can you talk a little bit about how you decided which companies to acquire

and how that helped your business? Yeah, first one was when Brexit was happening and we were worried that we'd be kicked out of the UK and we had a UK license. And so we started to explore buying one of our clients and that was Transfer Zero. and they had a license for the Bank of Spain and an incredible founder whose dad had also been in the remittance space with a lot of contacts. And we ended up acquiring them in 2016, Transfer Zero. That was awesome. And now we have a Spain office and a base there. And that's been really a beautiful story and it went very well.

And then during COVID and the Nigerian kind of crisis we talked about when 90% of our volume was Nigerian and then got shut down, we quickly needed to diversify. And one of the ways we diversified was into Francophone Africa. And the other was buying a company in South Africa. And again, it was one of our clients. It was pretty organic. We got a great price. The team was incredible.

We absorbed their whole team of 50. And we became one of the largest providers of remittance processing into South Africa. So again, focusing on that remittance space. And we were trading a little crypto in the early days in South Africa. It was regulated. It was not regulated. They said they didn't want remittance companies doing it. did. There was a loophole. So we've been very careful and cautious. I would say we haven't pushed

the button in South Africa at all and been been more watching what happens in that space. It's been a very hot crypto market. We were participating in the beginning, but I think when the South African Reserve Bank got clear, we decided to not do anything that was in the gray area there. And then I know that this was more like just a mess that shouldn't have happened if there had been organization, but as it was a payments provider for FTX in Africa, and the bankruptcy kind of made a mistake about like the relationship, but just explain that story. Yeah. I'm already like my biography has too many chapters in it. This chapter was an unnecessary one, just so wild. Yeah, we announced a partnership with FTX. The internet doesn't forget. There's some

branding material on there of FTX Africa. You know, we had big hopes that these guys would bank, bankroll regulatory advancement. They were, you know, lobbying a lot of banks. They were working very, since their regulatory team to four or five, six countries, talking about derivatives for crypto. I mean, that was very attractive to us, because it's expensive to get licenses in all these countries. This is not like a North American exchange where you get licensed in Canada and the United States. Okay, yes, you have to go state by state, but we had to go to like francophone, anglophone, South America, South Africa. It was a lot of work for a small startup. So to see FTCS come into the space with this like regulatory lobbying and

petitioning central banks and security and exchange commissions for derivative licensing, we were like, yeah, we'll help you. So we signed a partnership and we launched them in a few markets. Obviously, when that exploded, it blew up in everybody's face. We had a lot of cleanup work on their behalf to do and a lot of trust building to talk to regulators, clients, partners, understand what that look like. We had to restructure. It was a gigantic mass and, you know, really heartbreaking because we had been pushing the envelope to show that African companies can be compliant, that, you know, we can be on the right side of the law. We were working so hard to lobby regulators and work with them not to go into the gray area, not to launch without clarity. And then when that

happens, it just pulls the rug out on anybody involved and makes everybody look as, you know, distrustful as the worst person. And so that was really hard and removed a lot of trust. And we really struggled coming out of that. And we worked really hard to regain trust. And a lot of our clients came back and a lot of our partners came back. But it was a very different environment. It was, you know, a lot of the banks had closed. Silvergate had closed. Reserve Trust had closed, Silicon Valley Bank. It was just like explosion after explosion. And funding dried up.

And it was a really tough time. And if we were a newer company, we might not have survived. But given that we had survived so much, we got out of there and made it all the way to this great exit that we're doing now. Yeah. So talk about that. How did this deal come about it? And also just even tell us who DeLocal is. DeLocal is a success story in their own region and their, you know, their own, their own sphere.

They started in Uruguay, which for those of you that know, was a little company, a little country in the middle of South America and had a lot of innovation. And they started as a buyer of local currency. I'll use an FX term there where they were buying local currencies and selling, selling hard currency. to processors. So the Netflix is of the world, the Alibaba's of the world, a lot of merchants who wanted to sell their local currency that they collected from customers and then by dollar or euro, et cetera. And so they got really good at this product.

They grew very fast across Brazil, Mexico, Argentina, a couple of core markets through the moon. They listed on NASDAQ, which was really impressive, one of the first unicorn success stories in the space in the region. and, you know, really hit it out of the ballpark. And they've been trying, like, a few other global companies in the global south from Asia and South America to try to enter Africa. We've had a lot of, you know, global companies say they want to go into Africa,

but then they're like, Africa's always two years away, which is what they say every year. And so we didn't really see those North American European companies enter Africa like they said they would, except for Stripe with their acquisition of PAC. But they knew Paystack back when they were at YC, but still, let's give a, could clap to strike for that. But a lot of those companies never really put their money where their mouth was. And then you started to see some Asian companies invest heavily. And a couple of Latam companies invest heavily. And DeLogel was one of them. And we partnered with them for a while as a client and a service provider. And then we've been strengthening that partnership over time. And it's been better and

better. And this new investment and plan to acquire the company pending regulatory approval is just really exciting because it shows maybe we don't need to go north of the equator. Maybe the south-south power is enough. And, you know, that's something that strums the perfect chord in my heart, which is that the global south is very powerful. It is compliant. You can do business here. You can trade across borders. And a lot of the innovation isn't leapfrogging because there's nothing. It's building on existing innovation and it's building on existing energy. And so what will your role be going forward? Will it be basically the same or how does this change things? Well, right now, no change. Obviously, we're pending regulatory approval. And we are keeping our product live and all our clients are live and we're growing our product. Now we have a lot of synergies with the delocal team in terms of partnerships, in terms of trading with each other. They're one of our biggest trading partners, which is exciting in terms of investment, which is very welcome after.

the fintech desert that we've all experienced. So it's nice to be capitalized. It's nice to have a big trading partner. And a lot of their know-how in the collections in merchant processing, which is very complementary to us because we do it on the other side. We work with a lot of buyers of South-South currencies like the remittance and payment companies. And they work with a lot of sellers like the merchant companies. So it's kind of a perfect marriage. Okay. So now let's just talk more generally about, you know, crypto and Asia and this whole convergence of like the stable coins and crypto and fintech and just all of this, you know, like it feels to me like in the U.S., we're entering this era where they're all kind of now

going to be competing in the same territory, all coming at it from different angles. And it sort of feels like maybe this moment already happened in Africa. And so you've kind of witnessed So I'd be curious to hear you just talk about, like, you know, how you see each of those kind of different types of players in terms of, like, you know, what were the different advantages they had or, like, how did they end up competing? Like, you know, do you feel that, like, you know, I'm going to make this up, but maybe, like, FinTechs have more banking partners and, like, that gives them some advantage in this or that way. Or, like, maybe it's just that if you, you know, come into this like pure crypto, then you're more familiar with

technology or just like, how are you seeing that competitive landscape playing out and affecting the different, yeah, types of industry players? Well, number one, I don't see a different anymore into companies that understand crypto and don't. I see every single FinTech having crypto knowledge, the new ones at least. I don't, I haven't come across a new FinTech that's like, we don't do that. We don't touch that. Now, obviously, a lot of legacy. companies. And it's similar to a lot of companies that are being founded that would be like, I don't work with AI. Like, yes, they are, you know, in some way or function. And just by, you know,

necessity, a lot of their younger employees are using it and used it all through university, right? And so much more familiar with it. We're not seeing any new growth that's not at that level. And we definitely still seem a lot of legacy companies. Like, again, to mention air wallachs, he just came out and said, I'm not going to use it. You know, I'm not interested in it for this, this purpose. But I think the new crop is coming in wiser and wiser in terms of that. And I think banks now, especially with the new legislation in the United States, are much more open to working with companies that have this. First of all, because everybody's using it now. It's not like we're the minority. It's not like Elizabeth's on the outside with the PESA and 99% of other

fintechs aren't talking about it. I mean, it's good conferences. It'd be the only person on stage or, you know, the only person at the conference using it and, you know, people would be walking around with their finger pointed at us. And it was like really felt like the outsider. Now everybody's using it. It's not, you know, different at all. I went to money 2020 and everywhere you looked. So I think that means banks have to accept it. And that also means investors can't say, I don't invest in crypto. Yeah, you invested it because everybody has some sort of component. That's the biggest change. I think we're seeing a lot of influence from Asia. A lot of the goods imported into Africa are from Asia, right?

The pharmaceuticals, the retail goods, go into any supermarket, any electronic store. You know, one of the biggest phone device importers is a client of ours, and the amount of accessories that they're importing from China is wild. And so it's really them that are leading the demand for technology. If the exporter from China says, this is how I want to be paid on a QR code or via this app, that's where we start seeing our customers demand. They need to help making those payments. So it's coming also from those with market power, which is the seller. And, you know, I think that's exciting and interesting and very different story than what some people want to hear.

So in a way, like it sounds like, so your starting point was more like crypto mobile money, but you kind of moved. to become more like crypto fintech. And then these fintech companies came and they started fintech and now they've become fintech crypto. So you're all just like coming into the same competitive area from different starting. Well, let's remember mobile money was fintech, right? That was the fintech at the time because they were the weirdos at the conference in the beginning. Because people were saying, I have an MIS software system. That's what they called it.

Like a, you know, and why we don't want to use this mobile money wallet? And Senegal didn't even have a mobile money legislation when we moved there in 2015. And then they came out with it. So mobile money was just a version of FinTech that was tied to the USSD or the SIM card. Then we had FinTech go into web-based, you know, online or they were coming with the Chinese handsets, you know, on the device, on the hardware, or they were accessed online. Now we're seeing it go into the metaverse or wherever you want to go from there. And I think it's the same Fintac. We're still lending, sending, saving, right?

Spending. Those are still doing the same three or four financial activities. It's just how do we access them and how is a service provider giving it to us? Over the phone line, over the internet, over the blockchain, over the Metaverse, whatever you want to say. But it's really the same couple of products and what does that look like? And I think the barrier to entry just gets lower and lower when we don't have infrastructure that's co-opted by the government, like a government telco, or even the internet

service providers. And, you know, the barrier of entry gets lower and lower, which means more and more competition and more entrance in the space. And instead of there being one mobile money provider in 10 countries, then there's, you know, lots of companies doing mobile apps and now even more on the blockchain and even more in the metaverse, I think it's like pretty exciting to see how that's opening up. And do you feel like in this area where now everybody's kind of, you know, like having either similar offerings or the way that they're doing things in the back end are similar, what ends up being the main areas on which you compete?

Is it literally all just driven by price or, but also maybe like efficiency? Like what are kind of the things that make or break the winners and losers? in this space? Well, everybody has to still touch the local currency at some component because we're not in a place in time where people are paying rent in crypto, right? You know, you might be paying it via crypto to local currency or via mobile money to local currency, but it's still a local currency economy today. You know, let's date this June 2025 because maybe in a few years it won't be, but right now

it is. And when you're trading currencies, she with the most liquidity wins. So the competition is who can get the most liquidity on their platform. The most companies trading, the most in and out so that trades are not chunky. There's less slippage and you're able to give sharper pricing. That's how it works, right? And so you see a lot of entrants, but they don't actually get the clients. And then you ask, how do the clients get on?

Well, unfortunately, some of these clients are regulated and they take a long time to onboard. So the person with the most onboarded clients wins. And, you know, some of these clients are pretty clunky and they have to connect into your API and it could take them, you know, four or five sprints even longer. So then the person who has the best engineering team to integrate these guys. And then, you know, maybe the banks will open their arms to FinTech. But if you have a compliance issue, they'll close their arms to you. So now the company with the best compliance wins.

So, you know, wait a second. Those are all the same things that make any company good. Good client, compliance, you know, good sales, good onboarding, good efficiency. So it doesn't really matter about the technology if it's sort of converging and everybody's using it. It still matters on those core company basics. And I say this a lot and people like, oh, Elizabeth's a hater. She's hating on this company that's growing so fast and breaking things. And I'm like, in the end, you know, there is infrastructure in Africa.

There are people here. There are rules. It's not a place to come and be like, we can do whatever we want and break every rule. No, because you still need to access the local currency. And that travels by a bank's. And that's regulated by the government. And, you know, until we come to a place where people are using crypto for everything, which might be your goal, but until we get there, you're going to have to participate in the economy.

and that requires, you know, core company basics and governance. And so just like, you know, at this moment of time, so in a way, actually, just to make this one point before I ask my next question, it seems like the, you know, the acquisition with DeLocal will increase the liquidity. And that's kind of like what the big strategic move is there. So when you're looking, you know, at how it is that people are or businesses in these countries, are using stable coins or want to use stable coins. How are you finding that they're, you know, opting for that versus like mobile money versus like crypto versus even their fia currency or, you know, whatever? Like what are kind of, what role is are all these plates?

Yeah. This is a great question. And I said this a lot over the years is that mobile money works so well in a few countries. So there are some countries where mobile money penetration is over 95% of the economy sometimes. depending on the month in the season. And in those markets, it's hard to push for crypto for domestic payments, for P2P payments, right? Most people will choose mobile money. It works.

It's penetrated. It's hard to compete. There's discounts. You know, there's a lot of reasons about that. But country to country cross border is still a big use case for crypto or internet wallets that happened to have expanded into multiple countries. You might have a great internet wallet, you know, like in Nigeria by a Nigerian FinTech.

But unless that company has successfully also opened that wallet in Kenya, then you can't send it from Nigeria to Kenya. And unless they've successfully integrated with a wallet in China, it's still just a domestic wallet. So again, people forget that you have to create those companies, pay those taxes, you know, set things up in multiple markets to be able to send from one to another. That's why people like crypto,

because you can send it everywhere without doing all that, heavy infrastructure. But if you need to reenter into the Fiat space, those on and off ramps, you know, those pesky on and off ramps have to be built. So we see a lot of mobile money in the countries where people want to do small value, P2P payments, and it's a mobile money country, like Ghana, Tanzania, Kenya. Some markets like Nigeria and South Africa never really had that big mobile money uptake, but those banking systems are awesome. You can settle seven days a week on the Nigerian Nibs, the national bank switch. And South Africa has great settlement as well. So, you know, in those places, it's more bank transfers for local payments. And then, you know,

when it goes intra-Africa, that's tough. There's a lot of friction intra-Africa. So some of it's going by a swift bank, but a lot of it's going through alternative providers now through fintechs. And some of them using crypto, some of they're using pooling like we are, some of them use a broker models, but I don't know what the statistics are. It's hard to know there's a big informal economy, but I think we've become very competitive in that space. As we're seeing this sort of like stable coin mania in the U.S., I'm wondering, you know, here we have Circle has just gone public. And I think the last number I saw was it was trading at about $240, which is obviously well above the initial price. And we're about to probably have stable.

coin legislation here in the U.S. And I was just wondering kind of like from your experience what thoughts you have about what you're seeing in the U.S., like, you know, where you think the competition here is going or how, yeah, this kind of like increase that we're seeing in stable coin activity will play out. Well, the trading partners of a lot of my clients are in Asia, not the U.S. So they want stable coins that they can settle in Asia. But in U.S. dollars or do what currency or do they want this? Right now it's U.S.D.

A lot of it's U.S.D. Now, will that change? Maybe I don't know. But that's just a fact. They are mainly importing from Asia, not the U.S. Now, the banking system to do any payments outside of Asia, like you're going to do a dollar payment into Europe or you are going to pay the U.S. relies on American banks.

And those banks like USCC more than like USCT. So it's almost the world is split, right? Who uses what, where? And we're in the middle in that I think we operate on one of the continents that trades the most with Asia right now. And so, and it's growing. So, you know, I don't think we can ever see 100% using a stable coin that's preferred in the U.S. but not Asia. So, you know, again,

we just don't see that U.S. 100% down. Now, it's very important. You still use a lot of U.S. banks. I still have a good chunk of clients that want to big payments to U.S. banks and Europe, but not all. So basically it looks like U.S.D. will be used for, like, payments that are not either going to

or routed through the U.S. and U.S.C. Okay. Yeah, that's kind of how most people are viewing it. There has been some speculation that China's digital yuan could be something that the country pushes and that their leverage point would simply be how much business they're doing in a place like Africa. Like they could say, if you want to deal with us, you have to pay us in this digital yuan. Like, is there any, are you seeing any type of that activity or no?

Well, I'll just give some anecdotal answers because I don't have statistics. but, you know, when I moved to Nigeria in 2015 for half a year, I would go to the marketplace and most of the people would have a Chinese handset with a Chinese native app, and they would be speaking in Chinese text to their suppliers. I mean, a lot of these traders speak four or five, six languages already. So, you know, it was, you know, and a lot of them were going back and forth to Guangzhou. There was like, you know, what they call it, Chocolate City or whatever they calling Wangzhou. There are tons of Nigerians going back and forth. And I've met a lot of kids who have gone to school in China from West Africa and a lot of people who applied for the company

who studied abroad in China. And, you know, yeah, that's your biggest trading partner. You're going to speak the language, use their apps and use their preferential source of payment. That makes a lot of sense. That's not reinventing the rules of the world. That's exactly how everything works everywhere else. So, you know, we've already seen a ton of that. And, you know, when I lived in Senegal, I knew a lot of Senegalese who had studied abroad in China and come back. And I think that strength is a lot of governmental cooperation. I mean, for goodness sakes, like, there was a Zambian bond held by China that was like one of the first sovereign local currency bonds held by a major government and it was in China. So I think they did a big currency swap with the

quacha. I think that's going to continue. And I I've already seen it back when it was like a Palm Pay wallet, which was, you know, coming with the Palm device, the handheld. Everybody moved to that. And so I think that will continue for sure. But are you seeing that the Chinese government is trying to use their, you know, business interests in Africa to push the digital yuan? I mean, I can't really comment on that. All I know, we haven't had any major clients request it right now. Okay. Well, I guess the last thing would just be, this is one of those questions that I, as a woman in crypto, don't always love to ask other women in crypto. You can probably predict what that question is.

Are you going to ask me about work-life balance? No, no, no, no, no, no, no. Thankfully, it's a better question than that. I was like, Laura. How do you parent and also have a job? No, no, no, it's not that. It's not that. But I was just wondering, like, you know, you are, you know, you mentioned at the beginning that at that time, you were probably the first crypto exchange that was founded by female founders. And, you know, generally, I just wondered like, you know, what you thought of your journey, because it is probably different from that of most of your male peers, you know, whether it comes, yeah, just, I mean, there, I, I, we could go on, you know, to discuss so many metrics within that, but like, just go ahead and say what's top of mind for you. Look, it's not only that I was female, I was like a 30-something mother female. So I wasn't like hot girl in a bikini founder. I was like middle-aged lady founder, right? Which itself is another thing. Like, you know, and when I would go to a lot of these crypto things, I remember the first one was the first Satoshi roundtable. And they were like, we're going to

the phone party. And like, everybody had like three girls on their arm and I'm there like, okay, guys. I call the babysitter and then, you know, trade some Naira from my bedroom, then come back and see if you guys want to talk about investment. You know, I think it was just not only being a female, but like just being in a certain space. And then I would try to do that and be like, yeah, I'm cool. I can hang and let's go out. And it's just like hard to understand where the heck you are. And, you know, as a women in general in finance, if you want to be cool and hang, you have to, you know, maybe tolerate things you wouldn't tolerate with women, people of your own gender. And if you, you know, want to be cool and hang, sometimes you have to sexualize yourself

or allow yourself to be sexualized and like, be like, let's go to a club. I want to go to a club with a regulator, you know, but like that's, if it's a young and tech space, like they're having this meeting at the club, you know, so you have to be like, okay, I guess I'll put, on a dress or like a lot of things were at the beach or at swimming pools and you're like, I guess we're getting in the swimming pool. And I'll never forget at one event, there was like a woman from the European Parliament. She's like, I'm wearing my pantsuit. Everybody else is a bathing suit.

And I remember me like, this woman rocks. She's just like, no, I would not wear a bathing suit to the European Parliament. Why would I wear one to an investor panel? But, you know, I was like, I don't know if that's tech or that's crypto or that's, you know, American venture. And I didn't know, I didn't know what I was doing. I was all over the place. Sometimes I'd draw lines. Sometimes I wouldn't. Sometimes I participate. Sometimes I wouldn't. I think it was just weird and hard. And, you know, we did the best because, but I definitely so many times felt like I was not in the boys club. Sometimes it was like, oh, we really want to help you.

We want to help Africa. We love Africa. You know, we're doing this investment. You know, not because of you or your numbers, your product, because we love the space. that was helpful at times. But I think when it came down to it, we were an infrastructure company and maybe it wasn't the right model for venture because we had to build so many on and off ramps, so many licenses. It took 13 years. That's not a venture model where they want like three, four years and then go forward. So I think because there was so little investment in that space and so little people in that space, I joined in that crowd. But, actually what we've been building is something a lot different. And that's been hard too. And I think

just so many lessons learned about what it looks like. Now, I surrounded myself with an almost all female team for a while. And then we let the guys in. And, you know, we have 55% female men and a lot of allies. And we won a lot of awards for our team culture. So I think I had a safe haven to go back to in my team and my culture. And, you know, that's been really helping us through. All right. Well, Elizabeth, is there anything that I didn't ask you that you would want people to know? I think what I'd love to say is just, you know, investment in Africa in general, I think has been one of the hardest parts about this journey. I think it's been really, I would always say that I'm so grateful for the early crypto community and being open to Africa in a way that traditional tech investment in the space was not. And I think because crypto was meant to be global and inclusive.

It was just a really beautiful thing to have so many investors be open to that. We were the first African investment in a lot of these portfolios. And I'm really proud of that. And we had a lot of education to do. And we brought a lot of investors to the space. And I don't think a lot of investors realize how early it was. And so now after a fintech bubble and all this stuff, people are like, oh, we tried Africa. Let's go elsewhere.

And I'm like, don't give up on the region and keep coming back. It was very early days when you invested, you know, we didn't have that 20, 30 year history that you had in Silicon Valley or elsewhere. And I think Africa needs more time and most people on planet Earth will be African at the turn of the century. This is the time to keep learning more, to keep digging deep, not to believe the first person with a pitch deck that tells you they'll expand to 50 countries in one year, but to really understand what needs to happen to capture the growth of this continent. All right. Well, it's been so great having you on Unchained. Where can people learn more about you and as a finance? Well, we're on LinkedIn. We're on LinkedIn. We're on LinkedIn. We're on LinkedIn. Well, thank you so much for coming on Unchained. Thanks for having me. Back. Now we have the brief bonus interview

with an exclusive announcement from Ledger. I'm here now with Charles Guillaume, Chief Technology Officer at Ledger, which has a new self-custody product that they're announcing the day this episode airs, and it's called Ledger Recovery Key. Charles, tell us what problem you were trying to solve with this new product. Hi, thank you for having me. Yes, the problem we want to solve with this product is the problem of the backup, like backup and recovery is always, comes always with some friction, and this is part of self-custody. Self-custody is about having your own keys and be, able to prove ownership over your coin. But it works only if you're secure and only if you have a good backup option.

So at Leger, we are trying to innovate in the space and this is what we did in the past with Ledger Recovery. And now we are launching a Leger Recovery Key, which is an other option to do the backup and the recovery for your coin. And so tell us how it works. Yeah, definitely. So it looks like this. It's a small square and it's an NFC card chip that is inside this device.

And when you are doing your onboarding with your flex or your stacks, it works on NFC. So it only works with the recent product. When you do the onboarding of your device, you are going to create a pin for the ledger recovery key. you input the pin on this device, then you tap the card on the device and that's it. You have created a backup for your 24 words. And as soon as you need to recover your wallet, because I don't know, you wiped your device or you lost it or whatever, you need to recover your wallet. Then you just have to get this device with a brand, like this one is wiped, and you will recover

your wallet, not by inputting your 24 words, but by inputting your 24 words, but by inputting this device. the pin of this card, tap it on the device, and then you recover your wallet. And that's it. It's very simple, completely secure, and it provides, like, a new option for creating the backup of your 24 words. Okay. Yeah. Obviously, people have had issues before where they've lost their seed phrase and things like that. Famously, well, there's so many famous stories. Like, I think the CTO of Ripple or former CTO was known to have lost a seat phrase or password. And then there's somebody who, well, I guess it's a little bit of a different story where they drop their hardware in the trash.

And then it lost, he lost the password of his iron key. I know this story a little bit. Oh, okay. Iron key is an encrypted USB drive and you simply lost the password of it. Oh, okay. Okay. Yeah. Well, so still, there is an element of risk in the sense that now there's this other thing where somebody else could potentially, if they get control of both, they could, you know, use that to drain your wallet. So how would you recommend people safeguard this recovery key? So first of all, it's yet another option. Like there is no perfect setup. Your setup really depends on your threat model and everything.

And so I won't give like an absolute recommendation. It really depends on how you see your setup. But a potential possibility is to do like you write down your 24 words on a piece of paper. You put this at the bank in a safe, for instance. And at home you also have this leisure recovery key that you protect with the pin. The pin is a regular pin, meaning that you input three wrong pins and discard is. is wiped. And so that's at home, if you want to recover quickly your wallet,

then you can simply tap the leisure recovery key with this device after inputting your pin. And that's it, you recover your device. So for this one, you compare to the recovery sheet. The problem with the recovery sheet is if someone gets an access to it, it has direct access to your wallet and there is nothing you can do. With this, as there is a pin, then it's protected by the pin, and you don't really have to worry about someone stealing it. Okay. And so just explain the tapping that I think uses NFC technology.

So can you explain what's happening on the back end? Yeah, definitely. So in terms of communication channel, definitely we are using NFC technology, so the same tap and card that you have with your banking card when you do like a wireless payment or the one that you have on your phone. On top of the NFC communication layer, we have implemented our own secure communication channel. And what we are doing is a mutual authentication, meaning that this card is proving it's a ledger one. And this device is proving to the card that it's a ledger one. On top of this, there was another number on this card

so that exactly as you do, when you do a Bluetooth pairing, you have to verify the number. And there is the same thing here. So that you are sure that you are discussing with this specific card, and there is no other card in the room or something crazy like this. And then as soon as the authentication is done on both sides, everything is encrypted.

We are mounting what is called. a secure channel and the secure channel encrypts every single communication that goes from this device to the card and vice versa when you do a week over. So you have like a strong security guarantees, even if there was someone in the room with like advanced equipment that could like listen what's going on on the NFC channel. There was nothing interesting for anyone because everything is authenticated and encrypted. So there was a high level of security. And the second thing we can say is like inside this NFC card, there is a secure element chip.

So we are using the same technology that we have in this device with the secure element technology, which is smart card technology, the one that you find in your banking cards or in your passport. So again, the highest level of security that you can have in the space. So I know that it works only on certain ledger products, but not others. So can you tell listeners which ones will have this capability? Sure. So as we said, it's an NFC type of card. So it only works with our recent devices that are implementing NFC.

And we have the ledger flex and the ledger stacks that are implementing the NFC. So this one and the other one is the one with the curve of the screen. Okay. So, yeah, I think the older nanos are the ones that don't have. this functionality. So this is like a, it's just one of those questions that's going to pull together a couple of different trends. And I'm not sure, you know, how this could connect it with the recent launch. But obviously, there has been a very concerning trend about these increasing physical attacks on, you know, people who are prominent or even maybe not so prominent in

crypto. But, you know, I wondered, you know, and obviously Ledger is very, probably much more information about how, you know, what happens on the back end, obviously because of what happened with your executive this past winter. But, you know, I wondered, are there any thoughts around how the NFC card could help protect users who self-custody in any way from these so-called wrench attacks? Like the wrench attack is always a big problem. So here we are solving really the backup problem. It can avoid the issue when someone would steal your 24 words on the piece of paper. Also we are implementing different functionality, which implements the passphrase function,

for instance. And this one is pretty good for plausible deniability. So for those who are not familiar with this one, so you have the 24 words. And on top of this 24 words, you can add a specific way. small passphrase, you decide whatever word or passphrase you want. And on Leisure, we are implementing this with a different pin. So you can have one pin to access to your first wallet, the 24 words-based wallet, and another pin to access to your hidden wallet, which will be the 24-Words plus passphrase wallet.

So with this feature, you can implement plausible deniability, meaning that if there was someone with a wrench that is the implementing wrench attack, you can unlock the what you want and completely hide the other one. So this is a possibility. Also you can use this leisure recovery in a different manner. I also like this specific feature. So as you can have multiple ledger recovery, that means that you can put different seed in a different recovery with the same device.

So what you can do. And as it's very easy to backup and recover, you can switch from one seat to another very quickly. So in terms of plausible deniability, you can also do that. Like implement, use like two different recovery key, one with a smaller amount, and another one with a bigger amount, like your wealth wallet. And all the time you are using maybe like the smaller one. And whenever you want to really use,

like your wealth one, you can use your recovery key to tap it and recover it on the device. And then you have like one device, but two different recovery key. And you can switch from one seat to another very quickly. So it can also help in this area. Okay, great. Well, thank you so much for sharing your news on Unchained. Yeah, thank you for having me. Thanks so much for joining us today.

To learn more about Elizabeth and As of Finance, check out the show notes for this episode. Unchained is produced by me, Laura Shin, without from Matt Pilcher, Roni Ranavitch, Pamma Jemdar, and Marka Curia. Thanks for listening.