Can and should Africa develop Its own Cryptocurrency? Part 2.

Now here is where it all gets Dark.

During the time of researching on this article, A certain European country was the number 1 seller of gold, yet It does not have a single quarry site that mines the precious mineral. This made their currency among the top 3 most powerful currencies.

Having a resource based currency today was the design of systems of yesterday. A design in which by its very nature should have made an African country or two to make it on the top most powerful countries ( Of course currency wise) list. But this was never the case and is still not the case today, it might never be the case for many years to come. Yes it is true that it is not the result of monetary policies only but other factors too that are keeping Africa at bay.

Also I have come to the realization that a certain currency in the top 10 powerful currencies of 2021 list (see list below) have the value of their currency determined by the government a decision which in turn affects the value of other countries it is then pegged with. Meaning to say the value of that currency today was made in a board meeting somewhere. And then here comes Africa, rich in everything really, having all it’s currencies being pegged to that 1 currency in a way favorable not to the African nations…. That’s right not even 1 African currency is equal to that 1 currency that is backed by nothing but a decision. So why is this so bad? you may ask. Well the answer is simple; big activities such as Trade, Stock markets and Debt are affected tremendously. Not to mention development and poverty eradication. Unemployment rates etc.

How will a Digital currency help?

With all the negative aspects listed above, a digital/cryptocurrency in this view will offer quite the opposite, that is a favorable platform to both African nations and non-African nations, call it a level playing field.

By Nature, Digital currencies are not centralized to a particular banking system, meaning no one particular “Big Financial entity” has all the power. This is definitely bad news for those “entities” but it is good news for the small players trying to get out of debt or poverty.

“Money is just money, and it’s value should be the same across globally.”

Digital currencies have all intrinsic properties like physical currency, and they allow for instantaneous transactions that can be seamlessly executed for making payments across borders when connected to supported devices and networks.

For instance, it is possible for an African to make payments in digital currency to a distant counterparty residing in Hong Kong, provided that they both are connected to the same network required for transacting in the digital currency.

Digital currencies offer numerous advantages. As payments in digital currencies are made directly between the transacting parties without the need of any intermediaries, the transactions are usually instantaneous and low-cost. This fares better compared to traditional payment methods that involve banks or other financial agencies. Digital currency-based electronic transactions also bring in the necessary record keeping and transparency in dealings.

This is just Step 1. It is important now therefore to understand that there is a difference between digital currencies and Cryptocurrencies and understanding this will make Step 2 brilliant and why perhaps Africa should come up with a Cryptocurrency of its own.

To be continued…

The top 10 highest currencies in the world for 2021 are:

This list was taken from : https://clacified.com/business/16/top-10-highest-currencies-in-the-world-in-2021

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