When Satoshi Nakamoto (pseudonym) came up with the bitcoin concept in 2009, he may not have envisioned that in less than a decade there would be more than 800 other cryptocurrencies, all gearing towards global freedom from FIAT currencies.
And as this journey continues, Africa must not be left behind in the financial revolution and evolution of our times. When history is being written, and when it shall be read, it would be important that Africans do not become a loose thread in the economic fabric.
Slow but steady, African countries like South Africa, Nigeria, Ghana and Kenya, have set the pace in cryptospace, with South Africa opening the door for the first Bitcoin ATM in August 2014, notwithstanding that it would initially accept cash in exchange for virtual currencies (Bitcoins).
In 2013, Bitpesa was launched in Kenya, with the key intention of bridging the transaction gap between East African countries and China.
In this regard, today we are talking of Afrikoin (annual conferences to discuss cryptospace), as well as the African Digital Currency Association (ADCA). Many others are doing blogs, films, consultancies, and even news items in mainstream media.
Elsewhere, you get to hear of awareness and recruitment seminars in different parts of the continent, a very fantastic adoption strategy.
Owing to the antediluvian and discriminatory payment network that excludes Africa in trading with her allies (Latin America, Europe, Middle East and America) there is a dire need for Africans to continue learning and embracing Bitcoins and other cryptocurrencies.
Taking a look at the following reasons, one would with gladness of heart see a silver lining in the dark clouds of conversion fees, commissions, delays in banking & processing, foreign exchange fees, exploitative exchange rates, among others. Let’s take a look.
1. The Challenge of Banking Services
It’s a pity that in this era, more than 300 million Africans still do not have access to basic services in banking, especially in the rural areas of the continent.
With cryptocurrencies, this could be the end of referring to Africa as the ‘dark continent’, because the cryptospace has no geographical boundaries, regional or otherwise.
It’s a global currency for all people, of all times, in all places! And without regulations by states and central banks, with no distance to cover and no requirement of legal documents, with complete anonymity except for the blockchain where transactions are captured with no details of persons, this is a new dawn for Africans from all walks of life.
Even the few Africans who have access to Banking services still have to strive with delays in completing transactions, sometimes taking between 3 to 7 days! With the huge diaspora remittances, emergencies and developmental agenda would be fast tracked by adopting cryptocurrencies for instant payments!
2. Ownership of mobile phones and Smartphones: Africa is Warming up to Instant Mobile Payments – Kenyan Mpesa?
Thanks to advancements in information technology, owning a phone (and a smartphone for that matter) is no longer a luxury or a big deal in Africa.
Indeed, it is estimated that use of mobile phones is experiencing an annual growth at an average rate of 18%. Already, strong inroads have been made in Africa with regard to mobile payments, a great recipe for cryptocurrencies.
The case of Mpesa in Kenya for instance makes it very primed for the cryptospace, and many other countries should follow suit. Mpesa, a platform where transaction of FIAT currencies is captured through SMS notifications, and already channelling almost 45% of Kenya’s GDP, speaks volumes about how tired Africans are becoming of traditional banking models.
It’s for this very reason the cryptospace should be embraced to take the game to the next level. Apart from other East African countries, other countries have also embraced Mpesa payments using platforms like worldremit, paypal, and skrill.
3. Huge Fees in Transaction (sending or withdrawing)
Transaction fees are a nightmare in Africa, with between 12-20% of funds disappearing into transaction costs.
More than any other migrant group, even the World Bank acknowledges that Africans are the most adversely affected when sending money home. Africans continue to suffer under monthly fees in bank account maintenance, reactivation of dormant accounts, sharing profits from their hard earned savings with SACCOs, and many other hidden costs.
If Africa would fully adopt virtual currencies, her people would save up to 60% of transaction fees.
An example in time is the Bitpesa website, where the fees are tremendously reduced to 3%, in addition to making payments swift, convenient, and affordable!
And instead of experiencing losses, fast and instant crypto payments would translate to more business, increased profits, and poverty alleviation. And the earlier this happens, the better!
4. Dealing with Corruption and Money Laundering: no third parties, no cash exchanging hands
According to Transparency International, more than 90% of countries in Africa continue to fall way below the globally accepted levels in the corruption index, with minimal signs of growth and improvement.
The ease of carrying FIAT currencies makes it very easy for people to bribe their way out of law and justice, by simply digging their hands into their pockets for a few notes and coins!
Traffic police officers are renowned for harassing motorists for cash bribes, whenever they flout traffic rules.
The misconception that people working in an office and paid to do their job could be doing anyone a favour will be long forgotten, if cash money is eliminated.
The billions of dollars lost in corruption could just do Africa an economic miracle!
Instead of fearing anonymity in virtual currencies, it could be a great plus in overcoming tribalism and corruption in the continent! The absence of third parties is Bitcoin transactions is another plus in this regard.
5. Dealing with Inflation Menace in Africa
Inflationary troubles have hard hit African economies, with the worst scenario being the case of Zimbabwe. Africans are fast getting fed up with these situations, and Bitcoins and Bitcoin Education could be the long awaited saviour, to fill in the gap created by worthless currencies, and in so doing safeguard economic stability.
While it’s never easy to convince people to transfer their trust in a new money system, it’s highly possible that Bitcoins and other currencies could be the light at the end of the tunnel for African countries, families and businesses.
Every African must for the simple reasons, remain curious and follow trends in the cryptospace, lest they join the ‘I wish I knew’ bandwagon.