Cryptocurrency is not constrained by geography. It is centered on the internet; the transactions are held in a network named blockchain, a collection of linked machines that document transactions in a ledger in real-time. The distinction between cryptocurrency and Visa or Mastercard is that cryptocurrency is not governed by the government and may not need intermediaries. Transfers depend on the Internet, ensuring that they will happen anywhere in the world.
Prominent cryptocurrency global brands include Bitcoin, Litecoin, XRP, Dash, Lisk, and Monero, but Bitcoin is leading the pack in Africa. Created in 2009 by an individual or people with the pseudonym Satoshi Nakamoto, investors expect that Bitcoin could become a modern form of financial exchange in the digital age. Bitcoin has become such a norm in Africa that you can easily buy it from different countries. You can now buy bitcoin with mobile money in Ghana.
Stealing a march
According to the World Bank, South Sudan’s inflation rate was 10% between September 2016 and September 2017. Other countries with double-digit inflation are Egypt, Ghana, Malawi, Mozambique, Nigeria, Zambia, and Zimbabwe. It is no wonder that several of these countries are among the largest economies of Bitcoin in Africa. The major countries of Bitcoin are Botswana, Ghana, Kenya, Nigeria, South Africa, and Zimbabwe, according to bitcoin.io, a platform devoted to Bitcoin news in Africa. BBC adds that crypto-currency is gaining traction in Uganda.
As Zimbabwe’s inflation soared in 2015, prompting officials to print $100 trillion ($40 trillion) of notes, some Zimbabweans switched to Bitcoin. Bitcoin has gained a lot of traction in African millennials.
Hedge Fund managers take a long-term view
Well-known hedge fund investors gradually call bitcoin a long-term bet. Legendary bosses, including Paul Tudor Jones II and Stanley Druckenmiller, have recently indicated that the cryptocurrency price, denominated in US dollars, could increase when the Federal Reserve prints money to help fund the government’s emergency stimulus bills. So far, the central bank has produced more than $3 trillion in new capital in 2020 or more than three-quarters of the total sum raised in its previous 107-year existence.
The analyzes are constructive
Wall Street analysts have made optimistic remarks over the last few days. AllianceBernstein, a $631 billion fund manager, released a study claiming that the post-pandemic economic climate could establish a role for bitcoin investors’ asset allocation, CoinDesk posted Monday. Inigo Fraser Jenkins, co-head of Bernstein Research’s fund management unit, wrote that when it comes to the position of hedge against inflation, “the Bitcoin driver is similar to the Gold driver.”
African policymakers are not controlling cryptocurrencies, which could boost their development on the continent; nevertheless, there is no assurance that governments will not shift their current thought.
Instead of just not having to, governments could not control cryptocurrencies, the Nigerian central bank said recently. Currently discussing the country’s 12 percent inflation rate, the Nigerian apex bank declared that it could not monitor or govern Bitcoin.
Others in specific cryptocurrency-based remittance systems are emerging in different countries. These services include Abra, which runs in Malawi and Morocco, GeoPay in South Africa, BitMari in Zimbabwe, and Kobocoin, founded in London, launched by Nigerian entrepreneur Felix Onyemechi Ugoji.
Feasibility thanks to MPESA
Launched in 2013, Kenya’s MPesa allows virtual remittances to both African and foreign places and private mobile wallets, where cryptocurrency is kept. LocalBitcoins.com posted trade volumes of more than $1.8 million in Kenya as of December 2017, underlining the market’s lucrative existence.
Not to be left behind, several policymakers are pushing into virtual currency territories. Tunisia’s dinar is a digital currency provided by the nation. Senegal is in the process of developing a CFA that, if practical, could be emulated by other French-speaking countries in Africa.
There will be government-issued cryptocurrencies in Africa in the immediate future, predicts Shireen Ramjoo, CEO of Liquid Crypto-Money, a South African cryptocurrency consultancy company.
Industry analysts agree the blockchain would remain around for years to come. The Bitcoin users may transfer money to just about wherever there is a reasonably limited internet link. No intervention from other parties is a benefit that traditional government-issued currencies cannot give.
Another suggestion is that purchases are confidential, and user identification is private and secure; there is no risk of identity fraud, as is to other modes of digital payment.
As of December 2017, the worldwide market for blockchain rose to the point that Bitcoin traded $20,000. It was worth $1,000 a year ago.
The impact of PayPal
PayPal (PYPL) enables users – around 346 million active accounts – to acquire Bitcoin. The person-to-person payment network revealed on October 21 that it would allow customers to purchase, sell, and keep bitcoin. According to the firm, the cryptocurrency would become the “funding source of purchases for its 26 million merchants worldwide.”
Bitcoin’s eye-watering price rise over the past year is proving too enticing to ignore amid concerns that cryptocurrencies are a bubble that is floating toward an imminent explosion. Africa is taking the next step of rapidly progressing towards digital currency, which is drastically boosting its economy.