While cryptocurrencies face criticism in the Global North regarding energy consumption and emissions, more Africans are now using cryptocurrencies such as Bitcoin and Ripple. For many individuals, such as entrepreneurs and vendors, crypto is seen as an alternative to costly banks and official money often based on weak currencies. The main “Bitcoin countries'' are now Botswana, Ghana, Kenya, Nigeria, South Africa and Zimbabwe, according to gobitcoin.io, a website dedicated to Bitcoin news in Africa.
A related development is also that since 2018, eight African nations have been working on creating central bank-issued digital currencies (CBDCs). This development is connected to the trend of increased amounts of investments and businesses based on start-up entrepreneurship and digital markets.
Also, regarding African economic cooperation and integration, as via the recently ratified African Continental Free Trade Area (AfCFTA), there are even ideas such as creating a single payment system that will lead to regional financial integration.
At the same time, there are challenges for crypto in Africa as well. Several central banks in Africa, such as those belonging to ECOWAS cooperation states, have negative responses towards crypto and are even trying to ban it. This is the case in Nigeria where the nation’s central bank officials have described crypto using words such as a threat, illegal, and flaw. Nigeria is also one of the main countries where there is a growing number of crypto-users in Africa.
According to many financial analysts, trying to ban crypto is similar to trying to ban the Internet because many people still want to use it and it is a question of personal freedom and integrity. One important thing with crypto in Africa, Asia and South America is “banking the unbanked”.
Individuals can easily create wallets and accounts instead of going to a bank around Africa which can still be costly. With crypto, more people can quickly get something similar to a bank account or even become members of decentralized communities based on different cryptocurrencies. It also becomes easier for governments in the global south to find what they see as better methods of payment and investments.
There is also a global aspect of crypto related to older debate about globalization, international finance, and public institutions. Global governance institutions IMF and World Bank have often been validly or invalidly criticized for making things worse for poorer and undeveloped nations such as Haiti, Congo and Peru regarding debt and investments programs.
A similar type of criticism regarding international institutions was made regarding currencies such as the American dollar and Euro concerning the financial dependency of former colonies on such currencies affected by central-banking behaviors such as easy credits and inflation rates.
One can say that crypto as Bitcoin, initially developed in parts of the global north and based on political criticism of governments and the central banks is now getting more popular in the global south as a way to get rid of “monetary colonialism” and improve economies.
By legalizing cryptocurrencies such as Bitcoin, things can change and be improved. This is for example the case in West Africa with the dissatisfaction with CFA Franc.
For example in Senegal, Bineta, who is a young Bitcoiner and entrepreneur, more known as “Mama Bitcoin, became the first retailer to accept cryptocurrency and also stated in an interview with Cointelegraph that the CFA is “disempowering” and that Bitcoin could provide a way out:
“Our money belongs to France, the CFA is made in France and is — for want of a better word, colonial money. Bitcoin, however, Bitcoin belongs to everyone.”
Money is power and power is money. Something that can be seen in criticisms regarding the Central African Republic's legalization of Bitcoin is mainly about geopolitics and the nation lacks enough people and infrastructure to operate with it, such as when it comes to overall access to the Internet.
However, in many ways the future development for Africans is positive and bright regarding crypto, as when it comes to new blockchain initiatives and ideas of a free economic crypto zone in Nigeria. As crypto popularity is growing in Africa, so will the economic growth and social life quality develop as well.
Vladan Lausevic
Social and Crypto Entrepreneur/Analyst
Sweden
