Bitcoin and Africa: A New Way to Think About Savings?
Recently, the head of South Africa’s central bank, Lesetja Kganyago, asked a question at a big meeting in Davos: “Why not a strategic beef reserve?” This might have been a joke, but it also made us think about how Africa could change its economic plans to deal with changes in the world’s money.[5]
Understanding Africa’s Economy
Africa is full of natural resources, like oil, gold, beef, and cocoa. But having an economy based on these things can be tough. Prices can go up and down a lot, there can be problems with politics and the environment, and many people don’t have access to financial services.[5]
For example, the price of beef can change a lot because of things like diseases or trade rules. This is like how the value of money can change when it’s traded against digital things like Bitcoin.[5]
Cryptocurrency in Africa
More and more people in Africa are using cryptocurrency. In some countries like Nigeria and Kenya, about 19 out of every 100 people who use the internet also use crypto.[3] This is because crypto can help people who don’t have access to regular banks, and it might help Africa’s economy grow.[1]
By the year 2030, people and businesses in Africa are expected to spend $6.7 trillion.[1]
Why Bitcoin for Savings?
Bitcoin has some big advantages over things like beef or gold. It’s easier to move around, you can divide it into smaller parts, and it’s useful in many ways.[5] Over the past 10 years, Bitcoin has done better than almost any other kind of investment. This means it can help protect money from losing value, which is a big problem in many African countries.[5]
For instance, in Nigeria, the price of things went up by 34.80% in 2024, which made the Naira worth less.[5] If a country had some Bitcoin, it could protect its money from this kind of problem.
What Could Happen if Africa Used Bitcoin?
If Africa put just 1% of its savings into Bitcoin, it could make a lot of money. If the continent’s $500 billion in savings included $5 billion in Bitcoin, and the price of Bitcoin went up by 10 times, that would be $50 billion in profit![5]
This could help African countries be more independent and find new ways to be successful in the long run.
Challenges and Chances
While using Bitcoin for savings sounds good, there are some things to think about. We need clear rules and better ways to use it.[3] But there are also good things happening, like a project called StarkWare that’s helping startups in Africa use blockchain technology.[1]
What’s Next?
In short, thinking about using Bitcoin for savings in Africa isn’t just a new idea, it could be a big change for the better. By using the good things about Bitcoin, Africa could skip old-fashioned money systems and make its economy stronger.[5]
As Africa keeps growing and finding new ways to do things, using digital money like Bitcoin could help it become truly independent and successful.
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Sources:
– bitcoinmagazine.com
– lucidityinsights.com
– coinlaw.io