As the African continent makes strides toward economic autonomy, many of its citizens are still left without their own personal bank accounts. Poverty and corruption are still major concerns for the continent, and banking facilities where people can learn how to save money are not readily available. This is due to insufficient banks on the continent and the banks that are available are not easily accessible to the common man. It must be asked how African governments will respond to something like this as lack of financial facilities will leave many without a chance of learning how to handle their money.
Bitcoin and other forms of digital currency can be used to provide banking solutions to many as its openness and government’s inability to infiltrate makes it accessible to all peoples. Bitcoin is the world’s first decentralized digital currency meaning it does not have a central issuing authority or political institution that governs it. Those not supporting bitcoin might see it as a possibility for chaos because the lack of government involvement might influence people to use it for something negative such as money laundering and evasion of taxes.
Bitcoins volatility is also a concern as its value is based on a general consensus of random individuals who chose to invest rather than a governing body. The Central bank of Nigeria has distanced itself from Bitcoin more than once in the past and warned the citizens of Nigeria that there is no legal safe haven for those who chose to get involved with it. Despite this backlash, bitcoin trading is very popular in Nigeria. It is possible that those investing in it see a great potential not only for themselves but for all Africans as it potentially creates a more fluid banking system, where transactions and information are stored in online databases, making it easily accessible at any time.
Embracing a system such as bitcoin would authorize the people to determine what their money is worth; potentially elevating their economic status because they can chose to put a high value on their money based on the fact that a large number of people are choosing to invest in bitcoin. It seems that the banking industry in many of these African nations where banking is scarce is only available to the elite members of those societies. Bitcoin puts the system of wealth in the hands of the common people, without government involvement, whose best interest is not for the average person.
Another benefit of bitcoin would be no physical bank, as setting up bank accounts in certain African countries is often a difficult and expensive process, which is probably one of the many reasons why many Africans are without accounts as most people cannot afford to open one. As much as 66% of the population living in Sub-Saharan Africa are without a bank account. The introduction of bitcoin would eliminate the above mentioned obstacles as all transactions done with Bitcoin are done online, and because internet use is very high and on the rise in Africa many Africans will have the chance of gaining full control of their money since they will have access online
Kenya’s mobile payment system M-Pesa has 30 Million users across several African nations, as it provides international transfers, loans, and health provision all through online transactions, which gives anyone who chooses to sign up for the service access to all of this from even the comfort of their smartphones as there is no physical bank that would charge them a fee for the above mentioned services. It is companies such as M-Pesa that have allowed Africa to see a rise in the use of non-traditional payment service providers. Users just need to sign up and they are ready to go. There is no middle man, with the sender and the receiver being able to conduct the transaction discreetly between them. The benefit of a system such as Bitcoin is that it benefits those living in countries where corruption is prevalent since corrupt governments would not have the ability to tamper with any of the transactions between individuals. 2% of Kenyan households have been able to escape extreme poverty through a service like M-Pesa. M-Pesa is only limited to a certain number of countries, whereas Bitcoin is global, giving it the potential to possibly be bigger as it is accessible to anyone, no matter where they are.
Bitcoin has the ability to provide many Africans a chance to take charge of their economic freedom as it provides individuals with a chance to dictate how they want to move when it comes to making financial decisions without interference. Many Africans are living in corrupt jurisdictions where governments control who has access to money and who does not. A system like bitcoin defeats this corruption and will allow the common man to be in control of his or their own money.
Featured image | Gold colour bitcoin | André François McKenzie | unsplash
The views and opinions expressed here are those of the author and do not necessarily reflect the views of The Best of Africa.
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