Can cryptocurrencies replace paper money in Africa?

Interest around the world for Bitcoin has spiked, with global searches for “Bitcoin” having reached their highest levels in a year. Africa leads the way, with 3 out of 5 of the top regions for Bitcoin-related searches being African: Nigeria, South Africa, and Ghana, with Nigeria taking out the top spot.

For many analysts, the African continent will soon become the next big market for cryptocurrency trading. Twitter’s CEO, Jack Dorsey, recently spent a few months in Africa. He declared that there is no doubt that Africa will define the future – especially Bitcoin’s (BTC).

Can cryptocurrencies replace paper money?

Whether cryptocurrencies like Bitcoin will eventually replace paper money or not in Africa is difficult to say – no one knows and only time will tell. But what’s sure is that even if paper money still exists, cryptocurrencies and blockchain will help address many of the challenges that African financial systems face.

“The banking system there is disconnected from the rest of the world,” Paxful’s CEO,  Ray Youssef, explained in an interview. “If you’re in western Africa and you want to send money out of the country, it’s nearly impossible. You have to go to three or four or five hops–you have to use your friends and family networks.”

Cryptocurrencies like Bitcoin are a solution. Why?

Because Bitcoin can be used “as a means of exchange, as a means to move and transfer and convert your money, and move it around your world to solve real problems based on real use cases: remittance, payments, e-commerce, wealth preservation,” Youssef added.

As surprising as it may seem for such a volatile asset class, some cryptocurrencies are considered safe havens in countries with high inflation, scarcity of currencies, monetary control, or political and economic unstable situations, like many countries in Africa.

The true innovations offered by cryptocurrencies is the blockchain technology

Around the world, this technology offers safer and faster alternative financial solutions. Africa is no exception, where the adoption, popularity and use of many cryptocurrencies is expected to increase exponentially in the coming years.

The potential of the blockchain technology in Africa could therefore enable the continent to address some of the challenges it faces in the search for greater financial inclusion and autonomy.

Is this really that surprising?

After all, the attractiveness of solutions derived from the blockchain technology is boundless and borderless. Blockchain and the use of cryptocurrencies could intensify the flow of money circulating in Africa, thereby increasing the reputation and confidence of customers, as well as lowering transaction costs, while making exchanges more secure.

Bitcoin isn’t the only cryptocurrency with a promising future in Africa

While Bitcoin is very popular in Africa, it isn’t the only cryptocurrency that’s gathering momentum.

There are indeed other many interesting and promising projects. One of them is the Akoin, developed by the Senegalese-American rapper, Akon, who wants to create Akon City – an ambitious business project to build the first completely green city in the world in Senegal, relying solely on cryptocurrencies.

“[Akoin] will be the primary digital payment solution and currency within the city… for all kinds of things that are city-related, like paying utility bills. They will ultimately pay employees in the hospital and the supermarket in Akoin,” said Akoin co-founder and Hollywood producer Jon Karas. “The government has asked people to go digital and not be using physical currency, overall, throughout the country.”

Interested in cryptocurrencies?

There are many events you can attend in Africa about cryptocurrencies, like the Crypto Fest 2020 in Cape Town, or the Blockchain Africa Conference in Johannesburg, to learn more about cryptocurrencies.