Mento Labs Partner Spotlight: Kotani Pay

In the landscape of cryptocurrency adoption in emerging markets, transitioning from stablecoins to fiat currencies plays a crucial role in fostering financial inclusivity and stability. While stablecoins offer users the advantage of reducing volatility against high inflation, the reliance on fiat currencies is fundamental for widespread adoption, particularly in regions where digital assets are still gaining traction. Ramp providers serve as vital entry points in this transition, facilitating connectivity between users' crypto wallets and traditional financial channels. Acknowledging the role of cash in everyday transactions in emerging markets highlights the importance of ensuring interoperability between cryptocurrencies and fiat currency, ultimately driving broader adoption for digital currencies. Kotani Pay stands out as a significant player in bridging the gap between digital assets and fiat currencies in Africa, where cryptocurrency adoption is growing among its youthful, and digitally adept population amidst the demand for currency stability. With a mission to provide a frictionless bridge for new adopters seeking alternative payment systems, Kotani Pay offers on-ramp and off-ramp services to users in Africa through its innovative suite of products.

About Kotani Pay

Kotani Pay operates as an on-ramp/off-ramp platform, offering users connectivity between Web3 businesses and local methods of payment such as mobile money, banks, and cards. Their solutions are designed to simplify the process of integrating digital assets into everyday financial transactions, thereby promoting financial inclusion across Africa. Kotani Pay’s vision is to build a seamless connection between digital assets and fiat currencies, catering to the needs of both new adopters and existing users.

Kotani Pay is recognized as a licensed Crypto-Asset Service Provider (CASP) and is regulated by the Financial Sector Conduct Authority in South Africa. The platform currently operates in eight African countries: Kenya, Ghana, Zambia, South Africa, Cameroon, Tanzania, Uganda, and Rwanda.

Why Partner with Mento Labs?

By leveraging Mento Labs’ decentralized cUSD (Celo Dollar) stablecoin that follows the US dollar, Kotani Pay expands its range of use cases while shielding users against currency devaluation. This collaboration supports mass adoption of digital currencies and contributes to financial empowerment and stability in Africa, where users are impacted by deflationary currencies.

Kotani Pay and Mento Labs’ Partnership Testimonials

“At Mento Labs, we understand the critical role that on and off-ramp solutions play in regions where traditional financial infrastructure is limited. Partnering with Kotani Pay allows us to extend the reach of the cUSD stablecoin on the Mento Platform, and provide users in Africa with seamless access to digital financial services,” said Dr. Markus Franke, CEO at Mento Labs. “Our collaboration highlights the importance of building robust infrastructure to support the growing demand for digital financial solutions in emerging markets.”

“At Kotani Pay, we recognize the value that stablecoins bring, especially in regions with deflationary currencies. By integrating cUSD into our platform, we offer enhanced financial services to individuals in Africa, where currency stability is crucial for fostering economic growth and financial inclusion,” said Felix Macharia, CEO at Kotani Pay. “Together with Mento Labs, we are empowering users to transact confidently and participate more fully in the digital economy.”

Kotani Pay’s Solutions

Kotani Pay offers a comprehensive suite of products designed to streamline the integration of digital assets into traditional financial systems:

API Integration: Kotani Pay's unified plug-and-play API connects Web3 businesses to a diverse range of local payment channels, enabling instant integration across multiple countries and currencies.

SMS Wallet: The SMS wallet provides a fully-functional blockchain wallet accessible through SMS interface, catering to users without access to smartphones. This middleware technology enhances financial inclusion, allowing more African users to benefit from blockchain technology.

Stablecoin Settlement Solution: Kotani Pay's stablecoin settlement solution offers businesses an alternative source of USD through an over-the-counter service. This service provides dollar-pegged stablecoins at favorable market rates with a wide variety of stablecoin/local currency pairs.

Mento Stables in Action

Decentralized stablecoins on the Mento Platform, particularly the cUSD, play a pivotal role in Kotani Pay's ecosystem:

Universal Basic Income (UBI): Beneficiaries receive their weekly UBI in the form of cUSD, which can be cashed out in local currencies such as Ghana Cedis and Kenya Shillings, promoting financial inclusion and providing currency stability for beneficiaries.

Microcredit Pilot: With the pilot conducted by Cinch, Moola Market, Celo, and Mercy Corps Ventures, farmers in Kenya were able to access DeFi credit in the form of cUSD and cash out to their mobile money in the form of Kenya Shillings.

Humanitarian Aid and Transparency: cUSD is used in cash transfers for the Digital Cash for Work Pilot to provide timely and transparent cash disbursements to remote and rural communities in Kenya. The pilot increased transparency of cash transfers and the monitoring capacities of NGOs, while proving that donor-to-recipient direct transfers.

Microwork Pilot: With this microwork pilot, involving Kotani Pay, Appen, NairoBits, Mercy Corps Kenya, and Celo, Kenyan youths participate in microtasking and are paid in cUSD. Findings of the pilot showed that transacting with cUSD via a mobile phone reduced the average transaction fee by nearly 93%, allowing users to save on their earnings.

Measurable Benefits

The impact of Kotani Pay's solutions powered by Mento stable cUSD is tangible with measurable benefits including:

• Serving over 5,000 direct users and 15,000 indirect beneficiaries through UBI payments. Notably, 500 refugee families have been supported through UBI payments.

• Successful implementation of pilot projects such as Cinch-Moola pilot project, Digital Cash for Work, and Microwork, reaching hundreds of participants and disbursing a total of $27,000 in cUSD to support local communities.

• With the Microwork pilot, 200 participants have been provided an opportunity to earn an average of $7.00 per day, contributing to their economic stability and growth.

Next Steps

Looking ahead, Kotani Pay aims to explore additional use cases with Mento Labs, focusing on areas such as real-world assets tokenization, savings, and staking using cUSD. These endeavors highlight the commitment of both partners to drive innovation in the Web3 space and to boost the adoption of stablecoins across the African continent.

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