How the Spread of Cryptocurrency is Revolutionizing Economies Across Africa

The national economies of various African regions could be boosted by the adoption and circulation of cryptocurrency tokens such as Bitcoin. According to statements recently made by Vice President Dr Mahamudu Bawumia of Ghana, the ongoing pilot project being conducted by his central bank, which seeks to test the viability of digital payments and money transfer systems, is a step in the right direction not only for Ghana but also the rest of the Mother Continent.

During a conference organ African Capital Market Institute (ACMI), Bawumia said Bitcoin could be a major development as a means of payment in Africa that may replace traditional cash transactions in the near future.

According to Bawumia, Bitcoin has been designed to replace fiat currency. He says its introduction could bring about much-needed capital, reduce volatility and improve market efficiencies that are often hampered by economic instability related to legal tender. The Vice President reinforced the main goal behind Bitcoin, which was to circumvent the financial system, and its volatility, by adopting a peer-to-peer digital money system that would be entirely digital, borderless and autonomous.

A total of 10 central bank officials from across Africa are participating in the pilot project spearheaded by Ghana. The aim of the project is to enable financial institutions in the respective African countries to use the new technology, while the central bank, in turn, would monitor its effect on the economies of the countries involved and their financial system. One nation that should be participating, but it's not, is Zimbabwe, where Bitcoin has largely replaced the national currency because hyperinflation has rendered it worthless.

Ghana, with a population of about 27 million people, joined the ranks of other African nations that are exploring the digital currency. The country's central bank officials, however, acknowledge there are several challenges that need to be tackled before Bitcoin becomes accepted as a payment method for people. The nation is currently trying to find out whether Bitcoin can handle and accommodate the current electronic payments system.

Digital payments systems in African nations such as Kenya have proven to be very successful; these are countries where Bitcoin will likely find widespread adoption in a more organic manner.