Can Blockchain Brew a Fairer Coffee Trade? An Ethiopian Startup Thinks So

Waga Token, an Ethiopian blockchain startup formed earlier this year, has completed and fully deployed its Minimum Viable Product (MVP) on Coinbase’s Base Sepolia testnet. The company claims this marks a comprehensive digital coffee value chain built on blockchain infrastructure.

The MVP integrates 24 interconnected smart contracts, self-executing digital agreements that manage both operational and financial workflows. It also incorporates zero-knowledge proofs, a cryptographic method that allows users to verify claims such as compliance with European Union sustainability standards without revealing confidential details like supplier names or pricing.

“What we’ve built is a highly comprehensive blockchain-based coffee value chain,” said Emanuel Acho (PhD), one of Waga’s cofounders. “This isn’t another cryptocurrency experiment. It’s real infrastructure solving real problems for real people in the coffee industry

Unlike traceability projects that merely record origin data, Waga aims to create an entire digital coffee infrastructure, a functional marketplace with integrated compliance, payments, and verification systems. Each coffee token represents verified physical coffee, green, roasted, or retail-grade registered with full traceability data on the blockchain. Crucially, tokens are only minted once there is confirmed customer demand.

For example, when a cooperative in Yirgacheffe lists a batch and a distributor in Berlin receives an order from a café, on- and off-chain verifiers confirm the coffee exists and meets quality standards before tokens representing the batch are created. The distributor redeems and pays for the tokens upon delivery, a “pay-as-you-sell” model Waga says eliminates inventory risk and ensures farmers produce only what will actually be sold.

The system also addresses a longstanding problem in coffee trade: verifying compliance without exposing competitive information. Using zero-knowledge proofs, Ethiopian exporters can demonstrate that their coffee is deforestation-free and meets EU regulations without revealing sensitive supplier or pricing data.

“It allows coffee cooperatives to prove compliance with the new EU Deforestation Regulation while keeping supplier relationships and pricing strategies private,” Emanuel said.

The MVP includes a compliance automation system that can be integrated with the Ethiopian Coffee and Tea Authority’s standards. It can automatically verify that each batch meets export standards, holds the proper certifications, and complies with destination-country regulations, particularly in the EU. For exporters, this can mean faster processing times and a lower risk of rejected shipments.

On the financial side, Waga has built dual payment rails. Distributors comfortable with cryptocurrency can pay in USDT, a U.S. dollar–pegged digital currency, via Coinbase Commerce for instant, transparent payments. For those using traditional banking systems, the platform supports regular bank transfers through off-ramping partners. This design allows farmers to receive payments locally while enabling the National Bank of Ethiopia to maintain oversight of foreign currency inflows.

While the MVP is fully functional on testnet, Waga has yet to secure partnerships with Ethiopian banks. Emanuel said these relationships will be established ahead of a pilot expected at the end of the year. Securing a partnership with banks is a necessary prerequisite for a launch.

“To be completely transparent, this is an MVP on testnet. While we have built and are testing the infrastructure, we still need real-world partnerships with cooperatives, shipping companies, quality verification labs, and banking partners,” he told Shega.

One coffee exporter praised Waga’s ambition to digitize the coffee supply chain infrastructure, noting the escalation of traceability standards in recent years. However, he questioned the ease with which stakeholders might be able to integrate, considering that even modest digitization efforts take a lot of time to be adopted in Ethiopia.

“The project will need to find support from the government first,” the exporter told Shega.

Regulations around crypto-infrastructure also have to evolve with Ethiopia’s current legislation’s apparatus, imposing varying degrees of leeway depending on the product. Bitcoin mining is permitted, but trading crypto remains prohibited. However, with firms like McKinsey forecasting that the value of tokenized assets (excluding cryptocurrencies and stablecoins) to reach $2 trillion by 2030, several countries are seriously looking into blockchain and stablecoins.

If successful, Waga’s project could mark a turning point for Ethiopia’s most famous export, moving it from a centuries-old commodity trade to a digitized, data-rich ecosystem where compliance, trust, and value flow as seamlessly as the aroma of freshly roasted coffee beans.