ACCRA, GHANA – On the afternoon of Dec. 26, 2022, Chris Maurice finally capitulated and went to the emergency room at Hospital Clinic de Barcelona, just west of the city’s gothic quarter. For roughly ten months, the 26-year-old CEO of the largest centralized crypto exchange in Africa had ignored many of the symptoms consistent with malaria as he bounced between 21 different countries on the continent, advising heads of state on bitcoin adoption and setting up institutional accounts for his business, Yellow Card.
By the time Maurice was admitted to the intensive care unit, plasmodium parasites had been wreaking havoc on his red blood cells for nearly a year, multiplying in his liver and threatening to shut down many of his major organs, including his kidneys. His face and eyes were yellow from jaundice. As his hemoglobin levels plummeted in response to the intravenous meds administered as treatment, four days of blood transfusions helped save his life.
But to Maurice, his brush with death was simply the price of doing business. Since graduating from Auburn University in Alabama with a finance degree four years ago, he has traded security and stability for a career on the road, all with the goal of fundamentally disrupting Africa’s broken financial system.
“I’ve slept more nights than I can count in the Joburg airport,” Maurice told CNBC on the sidelines of the Africa Bitcoin Conference in Ghana. “I’ve mastered the art of where to go to find chairs with no armrests. I’m six-foot-five, so I need my space.”
For nearly 1.4 million users across the continent, Yellow Card – which offers an experience similar to Block‘s Cash App – is a vital lifeline to money.
“We wanted to make it as easy as possible for anybody to be able to come on and buy crypto within three minutes,” explains Maurice in an Uber ride cutting due south through the Ghanaian capital of Accra.
From there, Yellow Card users can send or receive digital cash in eligible markets. But unlike a centralized exchange like Coinbase, where many customers store their tokens for an extended period of time hoping that their digital assets will appreciate in value, the average customer on Maurice’s exchange keeps money on the platform for under five minutes. People take their local fiat currency, turn it into bitcoin or a U.S. dollar-pegged stablecoin like tether to send it across a border, and the recipient instantly cashes it out.
“It’s literally like, I deposit a million Francs in Cameroon, I buy USDT or BTC, and then I send it off,” continued Maurice.
Yellow Card customers can receive cryptocurrency from anywhere in the world and pay only a network fee, which typically ranges from 5 cents to $1, according to Maurice. That is especially helpful for people who would customarily turn to a money service provider like Western Union and MoneyGram, which sometimes charge heavy commissions on remittances.
The service is a game-changer for many Africans, who rely on money sent home from abroad, especially in countries where unemployment and inflation is rife. The latest data from the World Bank shows that in Sub-Saharan Africa – where up to 65% of adults are unbanked – remittance flows reached $50 billion in 2021, the most recent year for which data is available. The actual number is likely much higher when you factor in money transferred over informal channels. Meanwhile, World Bank data shows that it is more expensive to send remittances to Sub-Saharan Africa than to any other region in the world. On average, it costs $15.60 (7.8%) to send $200 to or from Africa. That percentage can be as high as $38, or 19%, in some countries.
Building the crypto payment rails necessary for Yellow Card requires jumping through a lot of legal and regulatory hoops, which is why Maurice spends about nine months a year in the countries where he operates or plans to launch crypto services. He has local lawyers in pretty much every country on the continent, and he meets with elected officials and regulators to further foam the runway for adoption. The level of hospitality varies widely across the continent.
Maurice stands out pretty much wherever he goes thanks to his height and plume of curly black hair. His speech is punctuated with laughs and smiles, and that friendly demeanor puts people at ease. But it’s underpinned by an intense work ethic — he’s got a black belt in TaeKwonDo, was an Eagle Scout in his youth and a finalist for Rhodes and Marshall scholarships in college. He also cares deeply about revolutionizing a broken financial system. These traits help enlist supporters for his longshot ideas – like launching a centralized cryptocurrency exchange in Africa from his dorm room in Auburn, Alabama.
Yellow Card has facilitated $1.75 billion in transactions since launching in 2019 and has about 220 employees – mostly in Africa. The exchange lets users send money to 16 countries on the continent – and crucially, at the other end of that transaction, the platform has streamlined the process of converting crypto back to local currencies.
On a good day, the service will do $5 million in transactions. On a slow day, it is closer to $1 million, according to Maurice.
The company has also raised $57 million, including from Jack Dorsey’s Block and Valar Ventures, a venture capital firm co-founded by Peter Thiel. Maurice says his ultimate goal is to expand service to the rest of the continent and turn Yellow Card into a billion-dollar company, up from its current valuation of $200 million. In practice, that means capitalizing on the exchange’s first-mover advantage.
“I realized very early on that there’s so much opportunity in all these countries and that we needed to be the first one there,” said Maurice.
“I drove from South Africa to Botswana, Zimbabwe to Zambia, then flew up to Ethiopia, Ghana, and Uganda. In all of these places, I was doing the grunt work – things like company registration and opening bank accounts, so that we would be ready to go.”
Maurice doesn’t stay anywhere for long, but the transient lifestyle suits him. He’s currently in Barcelona, but it’s just an apartment in a timezone that lets him take his morning work calls from a desk, rather than the shower.
“I can brush my teeth in peace,” Maurice says with his trademark smile.
How money moves in Africa
Moving money in Africa is an expensive and complicated process.
Commercial bank branch access is limited, especially for people living in remote and rural areas. Digital banking options are also limited. The latest stats from the World Bank show that just 29% of the population in Sub-Saharan Africa uses the internet. Tack on rampant hyperinflation, widespread government corruption, and capital controls trapping domestic cash in banks, and money can stop making sense altogether.
“If someone wants to move money to the country next door, normally, you’d have to fill up a suitcase full of cash and move it over the border,” explains Ray Youssef, the CEO of Paxful, a peer-to-peer crypto marketplace where users can exchange tokens with one another.
Companies like Western Union and MoneyGram offer an expansive physical network of storefronts around the world designed to move money for those who are unbanked. That cash network was extraordinarily difficult and expensive to build, which is why there aren’t a lot of direct competitors. It is also why those cash transfers often incur substantial fees.
“The entire system of cross-border payments is all about rent-seeking. That’s what it’s designed to do,” argues Alex Gladstein, chief strategy officer for the Human Rights Foundation, an organization that works with human rights activists from authoritarian regimes around the world.
“It’s not designed to help you move money from A to B. It’s designed by someone who’s going to make money off you moving money from A to B,” continues Gladstein.
If someone wants to move money to the country next door, normally, you’d have to fill up a suitcase full of cash and move it over the border.Ray YoussefPaxful CEO
Part of the problem stems from the continent’s quasi-colonial payment framework, in which roughly 80% of cross-border payments originating from African banks are processed offshore, mostly in the U.S. or Europe. That translates to higher costs and processing times that are sometimes measured in weeks.
“The mainstream way of approaching this is, ‘Oh, let’s just Africanize it. Let’s replace the intermediaries over there with intermediaries here,'” explains Gladstein. “That’s probably even worse because they’re going to be corrupt and expensive.”
Across the continent, there are fintech companies built on top of the existing banking system. These platforms abstract away the complicated back-office processes, but the fundamental problem remains. These businesses go through the same legacy payment networks, where they spend a lot of money settling payments — costs which they then pass on to customers.
The Pan-African Payment and Settlement System, or PAPSS, launched in Jan. 2022 with a goal of bringing existing payment systems together under one interoperable network. But it’s too early to tell through official metrics whether PAPSS has begun to deliver on its promise of saving African users more than $5 billion in annual transaction fees.
Then there’s mobile money, which has been around since the early 2000s. Think of it like an electronic wallet tied to a phone number that does not require a smartphone or data to operate. Users can pay bills and shop with their phone through SMS texting, instead of having to rely on traditional banking options.
Africa’s mobile money transactions rose 39% to more than $700 billion in 2021, according to data from the GSM Association, a non-profit representing mobile network operators worldwide. World Bank data shows that account ownership at a financial institution — or via a mobile money service provider — has more than doubled in the last decade, rising to 55% of adults in Sub-Saharan Africa.
But even as adoption proliferates, mobile money users don’t get the perks of legacy banking, including earning interest on banked savings and building up a credit score based on a history of spending. Interoperability on the continent also remains a major issue with this alternative way of banking.
“The entire banking system in Africa is completely and utterly broken, even amongst the mobile money providers, the telcos,” said Youssef from Paxful.
“Two thousand payment networks and only 2% of them talk to each other. That number continues to grow. It’s not getting better, it’s actually getting worse,” continued Youssef.
Take M-Pesa, short for “mobile” and the Swahili word for money — “pesa.” It’s Kenya’s version of mobile money, and it’s incredibly popular there. M-Pesa operates in seven different African countries, but you can’t send money from M-Pesa Kenya to M-Pesa Ghana.
“Even on the same network, owned by the same company, because of regulations, those two networks don’t talk to each other,” said Youssef.
One solution for moving money across borders is the centralized crypto exchange that Maurice built. The Yellow Card CEO says he would ultimately love to tie in with the Western Union network to help bring those costs for the customer to essentially zero through crypto, given that half of all the world’s remittance is still cash on both ends.
Another option for making international payments on the continent are peer-to-peer digital asset marketplaces, like the one that Youssef runs.
“People find each other, they do a trade, there’s an escrow which removes the trust from at least one side, and the deal is done,” Youssef told CNBC on the sidelines of the Africa Bitcoin Conference.
Paxful has facilitated $5 billion in transaction volume in Africa since it launched, though Youssef says it’s only a small fraction of the entire peer-to-peer market.
“Most of it happens on instant messenger, or on the street,” he said. “Africans have been doing peer-to-peer finance for a very long time; one might say over 1,400 years. So this is nothing new to them.”
From Taco Bell to Nigeria
On a 15-minute drive from Accra’s embassy-heavy Labone District down to the Atlantic Coast, Maurice describes himself as being as Southern as it gets. Before touching down in Nigeria in 2019 to launch his company, the New Orleans native hadn’t traveled much beyond the Southeastern seaboard of the U.S.
“My entire worldview was essentially confined to two states – Louisiana and Alabama,” said Maurice. “I had only been on a plane four times before flying to Lagos on a six-day-old passport with no visa and no shots.”
Despite his limited travels to that point, Maurice was no stranger to the difficulties associated with moving money around the planet.
Starting in the fifth grade, he used his father’s eBay account to sell Pokemon cards and other collectibles online – a venture that would ultimately cover his college tuition at Auburn. But the business of sending and receiving cash internationally wasn’t always straightforward. Some of his customers in Pakistan, for example, weren’t able to use PayPal. Bank wires were also not an option.
To get paid, Maurice instead had to wait in line at a local Western Union branch. It cost the buyer a hefty fee, and it cost Maurice time – and gas money.
At the age of 18, Maurice turned his attention to bitcoin and soon grew convinced that the world’s biggest cryptocurrency was the answer to his problems. It also presented a new business opportunity.
In 2015, Maurice and his freshman roommate’s best friend, Justin Poiroux, decided to get into bitcoin trading by running their own over-the-counter trading desk out of the Taco Bell on South Gay Street in Auburn.
“We started putting out ads on Craigslist that basically said, ‘We have bitcoin. Come give us cash,'” explained Maurice.
Every Wednesday at 7pm, he and Poiroux, a tech-savvy coder, would grab a spot in the back and split a 12-pack of Doritos Locos Tacos while drop-ins would swap dollars for bitcoin. Customers would slap a couple hundred dollars down on the table (bitcoin was trading at around $250 at the time), scan a QR code, and that was it. On the backend, Maurice and Poiroux were using LocalBitcoins, a peer-to-peer exchange, to carry out the trades.
At the time, Maurice says, his OTC desk offered an easier onramp to crypto than Coinbase, whose interface was tough to navigate. Profits came from the arbitrage play between payment methods, since bank transfers and cash had different fees.
As for the location? Maurice says he chose Taco Bell because it offered the “perfect amount of apathy.”
“This operation would have never flown at a Chick-fil-A,” he said.
After two weeks, business was booming, so they decided to expand the franchise.
“We started calling up friends from high school who were now at LSU, Yale, Georgia, Alabama, anywhere that we knew someone,” continued Maurice. “A few weeks later, we had seven Taco Bells on the eastern United States, all within college campuses, where you could walk in and buy bitcoin.”
Four months later, the Taco Bell trading desks were moving thousands of dollars in bitcoin. They weren’t too rigorous on the accounting at the time, but Maurice estimates that roughly thirty thousand dollars was exchanged across the entire franchise.
“Then one day, Justin and I were talking and we said, ‘Man, we should really do something less sketchy with our lives’.”
Then Maurice had a chance meeting at a Wells Fargo near campus that changed his life.
“I meet this Nigerian guy who is sending $200 to his family, and the bank charged him $90,” Maurice recalled.
“I’m like, ‘Man, have you heard of bitcoin?'” continued Maurice. “I explained to him what bitcoin is and how he could try it out by downloading Coinbase.”
There was just one problem: He had no idea what would happen on the other end of the transfer.
“What on earth is this guy’s mom going to do with $200 worth of bitcoin?” he said.
“I started skipping class and researching what the banking system was like in Nigeria – and the currency,” said Maurice. “Could you buy bitcoin in Nigeria? Could you sell it?'”
Maurice and Poiroux decided that the core market for Yellow Card should be the people who stood to benefit the most from an alternative, international payment network that cut out extra transaction fees and wait times.
While Poiroux stayed behind in Alabama to continue building and maintaining the tech that fueled the entire operation, Maurice set off to Lagos to establish a physical presence, including laying all of the regulatory groundwork needed to get the business off the ground.
Centralizing crypto payments seemed like the obvious thing to do. Up until their launch, peer-to-peer crypto payments on Binance, Paxful, or other more regional exchanges had been the status quo for many wanting to trade and invest in digital tokens.
“Generally, the reason that people use centralized exchanges is for the experience, right? It’s significantly easier to use Coinbase than it is to use MetaMask, which involves trying to figure out how to get your own ethereum and store your own keys,” explains Maurice.
Having the edge on general licensing has also put Yellow Card ahead of the competition.
“The amount of local expertise that is required to get some of these payment service providers signed, as well as registering entities and setting up bank accounts — it is such a different way of doing business than in other parts of the world,” Poiroux tells CNBC.
Running Yellow Card
Poiroux doesn’t crave the limelight — he has always worked behind the scenes, unconcerned with notching public accolades. If Yellow Card were a band, he’d be the drummer or bass player, keeping everything solid in the background while Maurice took center stage as the lead singer.
Poiroux started coding when he was 10, because he wanted to make his own video games. But after reading the bitcoin white paper, he became obsessed with the idea of decentralized, unstoppable software.
The Yellow Card co-founder and chief technology officer dropped out of college freshman year, and instead holed up in his off-campus apartment teaching himself how to be a full-stack developer through a combination of YouTube tutorials and engineering blogs. It took a year and a half of coding for 16 hours a day for him to build the beta of Yellow Card, and he mostly did it himself.
“If something needs to be built, I will learn, figure it out, and build it,” Poiroux says, with a hint of a Southern drawl. “Fairly confident this comes from my background as a farmboy from Alabama.”
Poiroux, who had been on a presidential scholarship to Auburn before quitting school, said he kept his off-campus apartment all four years so that he could still get the college experience of going to bars and football games. His parents eventually got on board after he and Maurice landed their first $100,000 in venture funding.
Today, Poiroux runs his own fleet of 40 software engineers across 13 countries who are responsible for keeping the entire operation going. His team is in charge of everything from patching bugs in the code to creating technical workarounds for nationwide internet cuts.
“A lot of the infrastructure dependencies in Africa aren’t reliable and so you have to build a lot of logic surrounding it that you wouldn’t necessarily, originally think of,” explains Poiroux.
In Zambia, for example, it is not uncommon for the largest mobile phone network, MTN, to go down for two to three days. Extended network downtime means having to deal with pending transactions and bracing for more extreme edge cases. Third-party infrastructure dependency is another big sticking point, particularly when it comes to the availability of the network and the payment service providers.
Poiroux first went to Lagos in 2020, and he now makes it back to Africa every three to four months, rotating between Yellow Card engineering hubs in Kenya, South Africa, and Nigeria.
Part of what makes Yellow Card so convenient for users is its interoperability with existing banking options, as well as alternative payment service providers, including mobile money. While the platform will custody crypto assets if users want to keep their tokens on the exchange, very few choose to do so. Poiroux emphasizes the fact that they are really more the gateway to crypto.
As the counter-party for all trades, Yellow Card also market makes on the exchange against African currencies, a feature which proves crucial when it comes to reducing price volatility and fairly pricing assets.
“We’ll buy several million dollars a day worth of naira,” Maurice says, referring to the Nigerian local currency. “We’re one of the few companies that will actually take on local African fiats.”
35-year-old Franklin Okoye, who works in the Nigerian capital, Abuja, earns a living by helping businesses to import goods like clothes and chemicals from China. Okoye says that he and other merchants use Yellow Card specifically because it offers “very competitive” market rates when he has to convert between tether and the Nigerian naira.
“We have difficulty in Nigeria here accessing dollars to make payments abroad. So everyone is looking for alternative ways of making payments,” said Okoye, adding that he swaps more than $1 million worth of naira for tether (and vice versa) on Yellow Card each month. “Everyone is going to crypto.”
Beyond the remittance use case, many customers use the platform to hedge against inflation and currency devaluation by holding some of their local currency in a U.S. dollar-pegged stablecoin like tether, according to Yellow Card’s director of special projects, Oparinde Babatunde. He thinks that’s a big reason why crypto’s latest bear market didn’t hurt their business — the need to protect against inflation has only gone up as governments around the world began printing cash during the pandemic.
Maurice tells CNBC that Yellow Card’s business customers are also using the platform to pay for expenses like their Amazon Web Services bill, and Poiroux added that they have seen some of their retail customers earn money by informally day trading and trying to find arbitrage opportunities between coins.
“We have tons of people who use Yellow Card essentially as a full-time job,” Poiroux said.
Spreading the bitcoin gospel
Nowadays, Poiroux spends less time in the weeds of coding. Instead, he devotes most of his waking hours to thinking about what comes next and how to scale the business specifically to meet the needs of the people for whom he built the platform.
“Our approach is — and this has been my approach on the technical side — to build one solution, one platform — where we can quickly plug-and-play other functionalities,” Poiroux tells CNBC from Atlanta, where he’s working between visits to his production hubs in Africa.
“Think things like new payment service providers, so that we can scale quickly and make crypto as accessible as possible,” he said, noting that other crypto payment platforms have taken the opposite approach, hyper-focusing on big markets like Nigeria instead of the entirety of the continent.
Poiroux says that in addition to the retail-facing part of the business, the enterprise side of the operation is also a major priority. Yellow Card offers a Payments API that enables companies around the world to collect and disburse funds in Africa without currency devaluation risk.
“The super-cool part is that it uses the same infrastructure as our retail platform,” Poiroux explains of yet another project he architected and helped to code. “So if we expand our retail business, we can instantly make that available to the companies that have integrated this service already.”
In the meantime, both Maurice and Poiroux are spreading the gospel of bitcoin pretty much everywhere they go. Last summer, for instance, Maurice advised Central African Republic on adopting bitcoin as legal tender.
Maurice and his Cameroonian lawyer were brought to Bangui to meet with the minister of public works, who is in charge of the country’s crypto strategy. About halfway through the meeting, the electricity cut out, which meant no AC and no light for the remainder of the conversation.
“We were in a dark room with no windows talking about how the country would be tokenizing everything from their natural resources, to Makumba gorillas,” Maurice recalls.
The conversation didn’t miss a beat, because everyone at the table was engrossed in the conversation at hand — how other countries had been taking advantage of Central African Republic through currency controls for its entire history and how bitcoin presented the country with its first real opportunity to determine its own finances.
“Bitcoin gives them a chance to control their own destiny — to keep their money outside of foreign banks, in their own country, to use how they see fit,” Maurice said. “It really is financial freedom.”