With the emergence of decentralized finance (DeFi), traditional fintechs that are mostly centralized may find it reasonable to try the benefits that come with decentralization.

Still, these fintechs require ideal infrastructure for an ideal, and seamless transition to the Web3 ecosystems – made up of cryptocurrencies and stablecoins – which work differently from fiat currencies.

A platform that provides such infrastructure would therefore be handy.

Developed by Nigerian invest-tech startup ComiBlock, Yuki is a Lagos-based Web3 platform that gives African financial companies an application programming interface (API) that makes it easy for them to create and offer unique and noncustodial crypto solutions for their customers.

The Fall of FTX Birthed Yuki

*(Lagos, Nigeria, the Web3 hub in Africa / Photo by Unsplash)*

Yuki co-founder and CEO, Dennis Mary Chidiebere, says he started the platform in November 2022 just after the fall of the cryptocurrency exchange, FTX, and the challenging experience he had working with foreign crypto API services and counterparties while building ComiBlock.

When the giant crypto exchange platform collapsed, Mary says he realized that something has to be done differently in the way cryptocurrencies are being adopted and used in the African continent.

“I started off with self-custody wallets for retail users and in the process, reached out to these users to get more details about the product. Later I engaged with Route Money, a B2B payments platform based in Kenya, whose CEO sought to find ways to incorporate stablecoin in his app,” Chidiebere tells NODO News. “However, the Route Money CEO did not have comprehensive solutions -including an API-with which he could incorporate these digital currencies in the Route money platform.”

He adds: “In our conversation with Route Money, I discovered that fintechs in Africa are generally left behind when it comes to Web3. They do not have the requisite tools. Flutterwave had somewhat made it easy to build fiat applications, but with cryptos, it is a little different.”

Secure Access to Digital Assets via APIs

With Yuki APIs, businesses can operate digital asset products that are noncustodial and multichain compatible by default, just like their traditional custodial counterparts. This is achievable through Yuki’s Direct custody solution that allows businesses to offer self-custodial and seedless wallets secured with MPC and hassle-free recovery.

For instance, a fintech can deploy Yuki to build a remittance service, stablecoin payments, and crypto trading services in, say, a week instead of months. And the fintechs do not need to write any complex code or worry about compliance.

Chidiebere explains that Yuki is a crypto security-first infrastructure-as-a-service platform. It empowers not only Web2 fintechs but also crypto native companies with scalable and secure custody solutions and projects to build dapps, wallets, exchanges, and more.

Integrating Self-Custody Wallets

“We are super focused on the African fintech space, and I believe by adopting Web3 as an infrastructure, they can move beyond efficiency, stay competitive and crypto primitives like composability programmability, permissionless allow them to build on top of non-custodial protocols and give incentive and control back to users.” In this way, Chediebere explains, customers can be attracted, retained, and rewarded anywhere in Africa on-chain. “Web3 solves customer problems in ways that are impossible with legacy tech, where everything is gated by financial gatekeepers, so it makes sense for fintechs to future-proof their revenue.”

Also, Yuki’s services streamline aggregated liquidity, AML/KYT (Know Your Transactions), on/off ramp, DeFi, and exchange connection into their infrastructure by default to help businesses remove complexities, reduce cost and improve operational cost.

In the coming three to four years, Yuki looks to have 1500 fintech/crypto native companies across the continent using the platform.

APIs Are Key Driver of Open Banking

On APIs, he says that they are an important component because they are business enablers. They help shape the way value is being moved across Africa.

“And when it comes to open banking, it is still a growing trend in Africa. And digital assets are accelerants to open banking since stablecoins adoption and accounts provide users with fiat-backed accounts,” he explains. “The full potential of open banking in Africa will be achieved by digital assets. They are an ideal solution when it comes to the concept of open banking for Africa.”

He also notes that the issue of interoperability between fintechs and tier-one banks when it comes to the deployment of Yuki is one that is still under discourse and a milestone that they’re hoping to cross in 2 years.

However, he opines that banks will come around, at one time, because their primary business is custody, and need will offer custody support for crypto as many banks in the West have done as crypto and stablecoins digital assets continue to become mainstream.

“Crypto adoption in Africa is definitely on an upward trend. And the best way to make people adopt these digital assets is by creating the infrastructure to enable everyday utility,” Chediebere says.

He reveals that this year, Yuki, which in May 2023 partnered with Aladdin Bank, a neobank for small and medium businesses, as it pursues another partner in Kenya, amid its efforts to acquire a pre-seed round to scale up its operations and product development.

It also intends to engage in the education of regulators and compliance advocacy, especially with the regulatory bodies in Kenya and Nigeria.

-Edited by Shigeru Sato
-Top Photo: Dennis Mary Chidiebere, co-founder of Lagos-based digital asset infrastructure startup Yuki