Cryptocurrencies have the potential to change the lives of some of the world’s poorest and most desperate people for the better. Cryptocurrency can improve lives by helping residents of developing countries like Africa, Nigeria to participate in the global economy and escape from poverty.
Hyperinflation, poverty, lack of jobs, lack of access to banking, lack of capital, and poor access to markets are among the problems that Bitcoins can help people in developing nations solve. This will be achieved by giving everybody in the world access to modern banking and financial services through the blockchain.
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For years there is a dream of East and west regional blocs to have a common currency in which they can trade among the member states, but now this is possible with the help of cryptocurrencies like Bitcoin. There are now many entrepreneurs, economists, aid officials, and bankers who believe a combination of cryptocurrency and mobile phones, will give the world’s poor access to the global economy.
In recent years there has been increased cross-border mobile money use. Now cryptocurrency is coming to play, presenting another level that African countries can engage in their efforts to build cross-border trade. Crypto removes the regulatory challenges presented by conventional currencies, so the African countries now can easily do business with member countries in the eastern bloc.
Crypto has worked very effectively where there exist parallel exchange rates in Zimbabwe and Nigeria. Fear of the return of hyperinflation that made $1 worth 35 quadrillion Zimbabwean dollars at the dawn of the century pushed investors to the safety of Bitcoin, nearly doubling – at the time – its price to $13,499. Bitcoin, which expanded faster in emerging markets this year, has since skyrocketed past $16,000, more than 1,300 percent return to investment year-to-date, creating a new crop of dollar millionaires in its wake.
Now with Africa, the second largest user of Bitcoin on earth many Bitcoin Wallet companies have also entered the African market, where the people can safely store their Bitcoins. Africa is not the only country where investors have turned to cryptocurrency as a viable asset class. About a year ago, Senegal joined Tunisia in introducing a digital currency based on blockchain — the technology behind cryptocurrencies — that is regulated by the country’s central bank.
With cryptocurrency, it is now possible for an African company to set up a payment corridor between say East Africa and China and completely bypass the U.S. dollar. This saves time, money and ease of doing business. Cutting through the regulatory resistance and the unwarranted euphoria, the role, and importance of crypto cannot be overlooked, first as a store of value and a second as a peer-to-peer trading enabler.
Nigeria, Africa’s most populous nation, and the second largest economy are now considered one of the largest players in the world in peer-to-peer Bitcoin transactions after China. Crypto has a bright future in Africa as can be seen by peer-to-peer trading volumes.