Twitter and Square CEO Jack Dorsey and rapper Jay Z have created an endowment to fund bitcoin development initially in Africa and India, Dorsey said Friday.
The duo puts 500 bitcoin, which is currently worth $23.6 million, in the endowment called ₿trust. Dorsey said the fund will be set up as a blind irrevocable trust, adding that the duo won’t give the team any direction.
₿trust is looking to hire three board members. The fund’s mission is to “make bitcoin the internet’s currency,” a job application describes.
The government in India has so far been reluctant to embrace bitcoin and other cryptocurrencies. Friday’s move comes as New Delhi is inching closer to introducing a law that would ban private cryptocurrencies in the nation. It is also looking to create its own digital currency.
“Even though India is the software development capital of the world, we haven’t contributed to bitcoin core development in any significant way,” explained Varun Deshpande, co-founder of Juno, which is building a digital banking platform from India for Asian Americans, to TechCrunch.
“India always had the skills to contribute but lacked the right incentives. Today’s initiative is even more significant since it provides the right incentives for developers from the world’s largest democracy to contribute and have a say in bitcoin’s protocol development and bring in a diversity of thoughts in shaping the future of money. The irony is as India prepares a bill to ban bitcoin in India, the world is turning to our massive technical talent in India to secure and safeguard the bitcoin network.”
On the other hand, Africa, most especially Nigeria, has experienced a surge in cryptocurrency transactions in recent years. Last year, Nigerians traded more than $500 million worth of cryptocurrency on major local crypto exchanges. The country is only second to the US in terms of the volume of bitcoin traded in the last five years.
Africans who trade cryptocurrencies rely on them because they protect against currency devaluation and value exchange during cross-border transactions. In Nigeria, bitcoin trading became ubiquitous last year during the #EndSARS protests that rocked the country. When donations for the demonstrations began to flow from all parts of the country and in the diaspora, the government shut down the bank accounts used for this effort. But bitcoin became a lifeline keeping crowdfunding activities alive.
Since then, there have been growing concerns that the government had intentions to regulate cryptocurrency in the country. Last week, those doubts were actualized as the country’s apex bank gave a directive to banks and financial institutions from dealing in cryptocurrency or facilitating payments for cryptocurrency exchange platforms.
Dorsey has long supported the adoption of cryptocurrency. Square already supports bitcoin and last year acquired about $50 million worth of bitcoin for its corporate treasury. Twitter is studying the potential use of bitcoin to pay its employees and vendors.
In an interview with CNBC earlier this week, Twitter Chief Financial Officer Ned Segal said, “We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they ask to be [paid] in bitcoin and whether we need to have bitcoin on our balance sheet should that happen. It’s something we continue to study and look at, we want to be thoughtful about over time, but we haven’t made any changes yet.”
Many high-profile industry executives have called for nations to embrace bitcoin. Earlier this month, Balaji Srinivasan, an angel investor and entrepreneur who previously served as the Chief Technology Officer of Coinbase, made a case for why India should embrace bitcoin.
“India has the talent to pull this off. Such a move would make international headlines, attract global support from the world’s technologists and financiers, differentiate India from the increasingly zero-sum economic policies pushed by America and China, and put the country at the forefront of a trillion-dollar industry,” he wrote, envisioning the potential unblocking bitcoin would create for India.
Meanwhile, the Central Bank of Kenya said this week that it will use bitcoin as a reserve currency amid the Kenyan Shilling volatility against the dollar. Last year, the country was only second to Nigeria in bitcoin trading in Africa. Dorsey’s plan is a follow-up on his visit to the continent in 2019. When meeting with crucial political and tech stakeholders, he made a startling reference to the continent’s budding cryptocurrency usage. “Africa will define the future (especially the bitcoin one!),” he said at the time.