Crypto currency: is Africa ready to enter the blockchain?

Put simply, cryptocurrency refers to private money. In other words, this currency is not issued by any government or traditional monetary body like central banks or any other financial institutions. Crypto currencies (yes there are several) are issued through blockchain technology. They are governed by a code secured by cryptography, making them inviolable. The scams they are subjected to are related to the wallets in which they are held and not to the cryptocurrencies themselves. Certainly without central banks at their head, transparency and security are their watchwords.

Role of crypto currency

Cryptocurrency can have several uses:

• Means of payment for goods and services: Bitcoin, for example, allows you to make purchases of classic consumer goods on many platforms such as Shopify or Overstock. Ether enabled in 2017, the purchase of works of art by young artists exhibited at La Compagnie (Paris X);
• Financial asset for investing: it is a potentially profitable investment;
• Crypto-equity crowdfunding: Investors can finance projects by raising funds using cryptocurrencies.

The main crypto currencies

There are quite a few crypto currencies: Bitcoin, Ethereum, Litecoin, Dash, Monero… Yes. There are so many that it is becoming difficult today to determine their exact number. But we can still estimate them today at around 2,000. However, we can come out with a fairly popular ten. This popularity refers to their market capitalization (value of all tokens in circulation).

The entry of crypto currencies into Africa

Before the end of 2019, access to cryptocurrency exchange platforms was restricted to holders of euros or dollars. Now, the Binance platform, in collaboration with Nigerian fintech Flutterware (which already allows small entrepreneurs to transact in nearly 150 currencies), allows Nigerians to store, buy and resell naira for Bitcoin. Later, the Kenyan Shilling and South African Rand are expected to join in the dance.

Crypto currencies exclusive to Africa

There are many crypto currencies exclusive to Africa that are intended to change the way Africans live. One can quote among others the Akoin, virtual currency of the American-Senegalese star Akon. We can also cite: Afro, Africa Master Coin (developed by Trapeace Holdings in 2018), Nurucoin (Kenyan crypto currency developed by Kenyan Isaac Mwendwa). These African cryptocurrencies are trying to find their way despite the meteoric popularity of Bitcoin in Africa.

In countries like Morocco, cryptocurrency is prohibited. The government however supports professional or international blockchains. Despite the government ban on the use of cryptocurrency by individuals, many Moroccans use it underground. Here is an excerpt from the global ranking of volumes traded on the Finnish platform LocalBitcoins:

With the exception of certain states such as Morocco, Zimbabwe, Egypt banning the use of cryptocurrencies or even South Africa and Kenya regulating their use, the other states are in a wait-and-see situation. Cryptocurrency represents a solution for Africans who do not have a bank account or who live in politically unstable countries.

Crypto currencies and observers’ concerns?

In addition, some observers consider cryptocurrency to be not only risky but also stable. This by referring, for example, to the fall of Bitcoin in February 2018. Despite the fact that some analysts compare crypto currencies to a Ponzi scheme, some Africans are willing to take the risk.

An average and unbalanced penetration rate across the continent and the problems of electricity distribution in many countries, do not really promote access to crypto currencies by Africans. Despite this, opinions are mostly optimistic: Africa needs blockchain technology as well as the cryptocurrencies generated by it.