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 on Friday.
The duo is putting 500 bitcoin, which is currently worth $23.6 million, in the endowment called ₿trust. The fund will be set up as a blind irrevocable trust, Dorsey said, adding that the duo won’t be giving any direction to the team.
₿trust is looking to hire three board members. The mission of the fund is to “make bitcoin the internet's currency,” a job application describes.
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 OnJuno, 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."
Africa, most especially Nigeria, on the other hand, has experienced a surge in cryptocurrency transactions in recent years. Last year, Nigerians traded more than $400 million worth of cryptocurrency on major local crypto exchanges, and the country is only second to the U.S. in terms of volume of bitcoin traded in the last five years.
Africans that trade cryptocurrencies rely on them because they offer protection against currency devaluation and for 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 protests began to flow from all parts of the country and in the diaspora, the Nigerian government shut down the bank accounts used for this effort. But bitcoin became a lifeline keeping the crowdfunding activities alive.
Since then, there have been growing concerns that the Nigerian 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, and 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. Balaji Srinivasan, an angel investor and entrepreneur who previously served as the chief technology officer of Coinbase, earlier this month 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.
An earlier version of this story said Kenya was planning to use bitcoin as a reserve currency. That is not accurate and the error is deeply regretted.