[0:00]We always say, like, we think Bitcoin was made for us, not for you guys. Because when you guys talk about Bitcoin, you talk about Bitcoin in a way that we don't fully comprehend. We don't understand what your issues are. You guys are number go up, number go down. You worried about the price. We like, have you forgotten what this thing is? It's immutable. It's decentralized. It gives me power that I've never had before. So if you go back to Africa, I think you go back to what Bitcoin was made for.
[0:26]Hey everybody, welcome back to the show. Joining me this week is Stafford Massi. He is the executive chairman and director of Bitcoin Strategy at the Africa Bitcoin Corporation, ABC. Stafford, thanks so much for joining me here in New York. Thanks for having me. Finally, Africa's here. Yeah, you just joined me from what, South Africa is where you're based. South Africa where we flew in, and New York's freezing. Um, but what a privilege. Uh you, we are huge fans, and I think the impact that you've had in South Africa, in Africa, is significant. You've orange-pilled a lot of us, and it's surreal to sit across you and and to speak to you in person. Thank you. Oh, that means the world to me. I can't wait to talk to you because I feel like so much is happening on your continent. You actually have the youngest population, right? A lot of people getting into Bitcoin. So first just share your backstory. For those who aren't familiar with who you are, what you do. Um, share with us your backstory, how you got into Bitcoin and what ABC is. So my backstory is, uh, I've been in Bitcoin since 2014. I got in when I was building a little device that plugged into a phone that converted the phone into a card acceptance machine. It was more or less the same time Jack Dorsey was doing it. Um, but when Square was doing it, he was plugging a little white dongle into the phone and he had an easy job because you guys in the United States were doing only max swipes. Uh where we were, we had adopted EMV, so I had the chip and pen. So I had to actually do a secure card across a non-secure device into a PCI DSS data center, and then the whole acquiring and issuing and switching and someone came along and said this thing allows you to convey or transmit value. No intermediary, more securely, than we've ever been that say then it's ever been down the history of humanity and I looked at it and I went, this is absolutely rubbish. And it took me at some time to get to it, but you we all approach it in the skew morphic way. Um, and I looked through kind of the traditional banking lens, but when it finally dropped, it dropped. And uh, I've been a Bitcoin maxie ever since. And I joined the board of uh, ABC, before it was called ABC, it was Alfvest Capital. And the reason I loved the business, it's uh, Warren Wheatley founded it at that CEO, it's a business that was a private capital business, a private credit business that deploys capital into SMMEs in Africa. And it it had a huge impact story, and what he wanted to do with it, and I saw the evidence of it. And what I loved about it, it was skewed towards African females. So if you an African female and you apply for private credit loan, um, you actually get biased in a positive way. So it's cheaper. And I love that story and I thought, let me be a part of it. I became the chairman of the board, and we did a lot of board change, etc. And then I tried to do the Bitcoin Maxie thing with him for a while. It took him a little bit, but then he got it. And when he got it, we sat down and said, how could we take a private credit, traditional private credit business, and shove a Bitcoin nuclear weapon into its engine? And do kind of what Saylor did. What Saylor's done with digital credit. We thought, why can't we do it with private credit in Africa? And that model works better for us over there because our market's completely different from your market. Your markets are, you know, you guys have low yield. High, high, um, capital, like lots of capital, low yield, so you yield start. I'm the exact opposite of that. I have huge yields, but I'm capital staffed. So what are we doing with the Bitcoin, is not generating yield. I don't have to generate yield. I take Bitcoin and I, I harvest yield, right? So I've got a I've got a lightsaber. I have the capability to take a private traditional credit engine that gets money from fixed income allocators like pension funds, and it's weighted average cost of capital is about 12 to 15%. So we lend out at 18 to 25%. And that's cheap. That's really, really cheap compared to any of our competitors. When you go into Zimbabwe, you make a loan, as an SME in Zimbabwe, you pay 20% per month. What's an SME? Uh small and medium enterprise. Okay. Yeah, so you pay 20% you know, interest on your loan. That's crazy. So it's high yields, right? So if imagine we could take Bitcoin, put it on our balance sheet, lower the cost of capital. So actually lent it. So for the first time, we have a piece of collateral that someone anywhere in the world will accept and we can lend against it. We've never had that in Africa. Wow. I can't take my Cape Town apartment that's worth a lot of money, right? And fly to Switzerland and lend against it. No one will do anything. I can't take gold. Gold doesn't work for us because what am I going to do? Put on a ship and then send it. It's it's doesn't it's not practical. Bitcoin's come along and we have this pristine perfect money. that we can go anywhere in the world and we can lend, we can we can do an LTV of 30% on it and get a loan at less than 5%. That drops my way to that that cost the capital by 10%. That's fascinating. Is it are the yields higher because there's essentially more risk? Yeah, it's risk. It's it's a risky environment. That's how bonds are high. Coin Stories is proudly brought to you by Gemini. Start your Bitcoin savings account today. Plus, investing in Bitcoin has never been easier thanks to Gemini's orange Bitcoin credit card. I've got mine right here. Earn up to 4% Bitcoin back on everyday purchases like gas, dining, groceries, and more. No annual fee, no foreign transaction fees, and no exchange fees on your rewards. Head to gemini.com/natalie. 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As COO Dan Edwards says, when customers choose to pay in Bitcoin instead of credit cards, we are saving about 50% in our processing fees. This led to more support from Bitcoin users and a 10% revenue boost. Getting started is easy. Sign up at tryspeed.com or integrate the API in hours. Start accepting Bitcoin today. Download Speed at speed.app/coinstories or the QR code on the screen and use code coinstories10 for 5,000 free sats. Let's maybe step back a second because I feel like when we say Africa, I mean, Africa's a massive continent with so many countries, different languages, different currencies in there. Um, you're talking about specifically the stock market or the credit market, or are you zooming in on South Africa? Or is this a continental stock market? And how big is this? Like, I mean, give us the full picture of what we're, what we're looking at. So, what makes us different underlying the substrate is, you know, it's high yields, low capital. Um, you live in a market where the median age is very high, where I live, it's the average age is 19. Yeah, more than 25% of the continent is below the age of, uh, 20. It's wild. It's wild. And you know what's really cool? AI is unlocking so much latent human potential. So when SMEs sit in front of us, these small and medium enterprises, their ideas, the, the, the collateral that they have to securitize their loans, it's extraordinary. So people always think about small and medium enterprises in Africa is just like shacks and chickens, and no. These are businesses that come from an informal economy that's extraordinary. And young people that are unlocking all the natural resources in Africa, utilizing AI, and they love Bitcoin. So Bitcoin, where I come from, Bitcoin is money. You guys talk about Bitcoin, when we come here, we laugh, and we're like, The store of value. And we're like, huh, it's money. It's money. It's in some places where I come from, there's circular economies where it's a unit of account. They won't accept dollars. They'll accept Satoshis. They don't want your dollars, they want Satoshis. And when we bring Americans or Europeans to South Africa, and they look at this, it's very fascinating because you'll see European tourists coming and we have this little black kid teaching this European tourist about a Bitcoin wallet. It's like, this is how it works. So we leapfrogging, just like we did with mobile, we had nothing, and we went to mobile. So we're going from broken money, debasement, when you guys talk about debasement, you talk about 4% and 5% annually, we talk about 4, 5% in an afternoon. That's a world where we come from. So when you give us pristine capital, it becomes a substrate, not a store of value. It becomes a capital substrate. It's something that we can, you know, you can build off this thing. You can live off this thing. And when you guys see them, you know, it's it's it's going to go to 40k, it's going to go to 50k. Yeah, that's a very like westernized view. First world problems. Well, so okay, when we hear, you know, the the different asset bubbles, how much they're worth? We see equities and they're worth like I think now it's 135 trillion dollars. So of that, like what is African equities? What's that worth? It's massive. I mean, the unlocked capital in in the equities is extraordinary. We see dry, just dry money in corporations across Africa. We, the it's pegged at about 100 trillion dollars, um, 100 billion dollars. Um, SME unlock is about 350 billion dollars. Wow. Our plays Pan-African, so we listed on the Johannesburg Stock Exchange. And what makes us different as a treasury company is not the fact that we just listed and we're representing a country, like, you know, we got MetaPlanet in Japan. You got strategy USA. You got SmartWeb UK. Um, Africa Bitcoin Corporation is Africa. It's continental. So our JSC is the most mature stock exchange, and we represent the entire continent when we represent it to investors. And that's the opportunity. So 1.5 billion people. We're going to be 2 billion people by 2030, youngest population, fastest growing in the world, natural resources unmatched. Our SME base is dying for capital, and they can't gain access to that capital. And that's that's a tam for us. Well, and your continent is so rich with resources. Yes. And I think that people underestimate, um, how much development is going to happen there, especially over the coming decades with this young population growing up with tools like Bitcoin. Can you maybe, um, explain a little bit more about how it's being used as money, especially for those who again here in the West, we see it as this store of value, and I think a lot of people are like, no, it can't be money because it's too volatile. How could you, you know, you earn Bitcoin and then tomorrow it's worth half of what it was, that's even worse than the inflation rates in some of these currencies. What do you say to that? So first of all, if you take a look at how informal economies, so, you know, if you look at Jesse Myers's breakdown which you refer to earlier, which is like equities, cash, and you know, you got collectibles, etc. In Africa, our informal economies are cash economies. They massive. They big. In South Africa, the, the cash, we call it informal. And when we say informal, I think it's unfair because it always makes them less than the formal economy. But it's massive. I grew up in an informal economy. Um, you know, I saw money broken. You know, when when payments don't work in Africa, people die. And we don't really comprehend that. And and so when when you take a look at what we do with money in the informal economy, first of all, the size of that, arguably, in South Africa alone is 30 times the GDP of South Africa. But it's unmeasured. We don't know how big it is. We think it's about 30 times the size. But when I grew up, cash was very well structured, very sophisticated. Um, an ATM to me, when I grew up was a was a a black lady that lived a couple of streets from our block. I knocked on her window at 11 o'clock at night, and I told her I need 100 Rand, and she'd give me 100 Rand and she'd say, remember, tell your dad, I want my 110 Rand back on Wednesday, and when I looked over her shoulder, money was laying piled up on her kitchen. I could get a bar of soap, I could get a beer, I could get the money, and I could walk away at 11 o'clock at night. It's extraordinary. No one will touch that money. She's protected. Everyone knows her history, she knows everyone else. That's extreme sophistication. Gosh, that's Yeah, that's really extraordinary. That's really extraordinary. So if you take a look at that, you and you look at the banking world, the banking world's inconvenient. But if you take a look at how the informal economy has emerged around cash, it's extraordinary. We also see people that have built, they have so much money. We have SMEs, small and medium enterprises that approach us for loans. Banks won't look at them. Banks just won't touch SMEs in Africa because the yields are so big in just government bonds. So they won't touch them. VCs won't go anywhere near them. But when we take our analysts and we actually sit down with them, it's extraordinary what we see coming back. I mean, people have, there's a lady that came to us, and she wanted a loan, and we said, okay, how do you securitize this loan? And she showed us that she had built houses and put money into the houses. She had houses with money inside of it. Because she didn't put the money into the bank. Gosh, that's Yeah, that's so crazy. So, do you feel like there's a lot of just untapped potential with, um, entrepreneurs and builders in Africa who just are not able to secure capital because of how high the interest rates are and Bitcoin could be used as a solution? That's the totally. That's exactly that's our model, right? So it's already being utilized by the young folks, but the, the untapped latent human potential in Africa. We've always said Africa's rising and people have been come skeptical of that. Like, when is it going to rise? When is this going to happen? And I think we've been waiting for two things. I think we've been waiting for perfect money, and it's here. We, in Africa, we know the age before 2008 and the age after 2008, right? It's like, after the Bitcoin white paper and before the Bitcoin white paper. Our lives changed because suddenly we had something that couldn't be debased. It was immutable. It's decentralized. It's it it gives me power that I've never had before. So if you go back to Africa, I think you go back to what Bitcoin was made for.
[14:32]You go back to what Bitcoin's supposed to be doing for us. And that's when you get like, we have this measuring like a little on our, on our little dashboard, that's our real time analytics. We show MNIV and we, you know, we show BTC yield. But there's a number that sits right in the middle, which it's called, um, human yield. So we've, back of a matchbook math, but we've shown where if we raise one Bitcoin, it results in five African jobs. Wow. So every Bitcoin raised in on our in our Bitcoin treasury results in direct five African jobs, and that's how human yield figure. And that's when so when we went to, you know, Amsterdam last year, we went to Bitcoin Mina. We listened to all the Bitcoin treasury companies, and we're like, guys, where's the humanity? Where's the thing, why are we building this stuff? Is it just so we can build a hoard and and replicate what strategy is doing?
