Connect with us


The story of the CFA and Bitcoin in Africa



Almost 150 million individuals use the franc of the Monetary Group of Africa (CFA) each day, from Senegal in the excessive west to Gabon in the middle of the continent.

Used in 14 international locations, the CFA franc is pegged to the euro, printed in France and its financial coverage is managed by Western powers. As Fodé Diop, a Bitcoin (BTC) Lightning developer hailing from Senegal particulars, “The IMF and the French government still control the currency.”

Whereas the official peg to the euro is 1 euro to 655.96 CFA francs, its buying energy has eroded over time. In 1994, the World Financial institution devalued the CFA franc towards the French franc from 1:50 to 1:100. That yr, West Africans woke as much as understand the worth of their life financial savings had been slashed in half.

Gloire, the founder of Kiveclair, a Bitcoin Seashore-inspired refugee mission in the Congo, informed Cointelegraph that the CFA “makes whole countries dependent,” and “It is usually the poorest who suffer.” He defined the scenario in 1994:

“The most striking example is that of 1994 when France and a privileged few decided to devalue the CFA Franc. There is no guarantee that such a thing will not happen again, especially since the global economy is threatened.”

Previous to the creation of Bitcoin, West Africans might retailer their cash in euros, U.S. {dollars} or conventional shops of worth: actual property and commodities. For on a regular basis individuals, nevertheless, these choices are usually not available.

Mama Bitcoin, the first retailer to just accept cryptocurrency in Senegal, informed Cointelegraph that the CFA is “disempowering.” She means that Bitcoin might present a method out.

“Our money belongs to France, the CFA is made in France and is — for want of a better word, colonial money. Bitcoin, however, Bitcoin belongs to everyone.”

With the arrival of Bitcoin and cryptocurrencies, certainly, there’s now a viable various. Gloire means that “Bitcoin can help the countries of the CFA Zone to free themselves from France to finally turn the dark page of colonization.”

In Senegal, Mouhammad Dieng, co-founder of SenBlock, a nonprofit group for crypto promotion and adoption, informed Cointelegraph that he doesn’t “like the CFA, because its monetary policy does not allow us to develop. Bitcoin is a less risky alternative to make the transition to an African digital currency.”

Curiously sufficient, the hope to exchange the CFA isn’t restricted to grassroots cryptocurrency advocates. Governments of West African international locations have been vocal in their efforts to enhance the CFA and develop some autonomy.

With the present financial coverage, CFA zone international locations are obliged to ship extra money to France than different international locations because of colonial ties — there’s zero sovereignty over the forex.

A brand new forex known as the ECO was flouted as a substitute for the CFA. Nevertheless, it will nonetheless be pegged to the euro and biased to France. Regarding digital currencies — which Dieng mentions — the e-Naira, the digital model of neighboring Nigeria’s forex, has influenced the view of the CFA governments with regard to digital currencies and CBDCs. Nevertheless, an e-ECO or e-CFA has not but been deliberate.

However, the alternative for a stronger forex in the CFA African territories is huge. The GDP of the CFA area is roughly $170 billion and covers 14 unbiased international locations. It’s an enormous area with large untapped sources, notably agriculture and minerals.

Pape Alioune, a software program engineer who based Shintsha, a cryptocurrency trade that permits funds through cellular cash, informed Cointelegraph: “‘What country can develop without its own money or, better yet, a neutral money?”

The Senegalese–South African team behind Shintsha — which will soon rebrand to Mole App — has created an innovative way of addressing the low banking levels in Africa. The exchange hopes to onboard more and more Africans into Bitcoin and crypto through mobile money, an Africa-centric solution.

Mobile money, originally derived from a Kenyan invention called M-Pesa, allows sim cardholders to pay each other with credit. It is incredibly popular in Subsaharan Africa, from Senegal to Somalia to Malawi. Orange money is one of the most popular outlets, although Free Mobile and Wave also exist.

The myriad of mobile money options available to West Africans. Source: Cointelegraph  

Alioune estimates that “more than 80% of the adult population uses mobile money in Senegal, and it’s comparable in different international locations that use the CFA.” Africans use the tech the identical method Northern Europeans use contactless funds — it’s develop into a reflex, half of the each day routine.

Whereas there’s a sense of optimism in West Africa almost about the future of cryptocurrency and extra routes to buying crypto, “Education remains the most significant hurdle to overcome.” That’s in line with Nourou, the founder of Bitcoin Senegal who’s on a mission to facilitate Bitcoin adoption in his residence nation.

For Nourou, provided that literacy charges in his residence nation are simply 50%, he speaks with enterprise homeowners, entrepreneurs and educated members of the neighborhood. “Most people in West Africa have at least heard of Bitcoin. It’s a question of getting through to the right people and spreading awareness,” he informed Cointelegraph.

Nourou agrees with Gloire in that it’s not nearly Bitcoin, it’s “absolutely necessary to educate people about money.” Gloire provides that whereas studying about cash is vital, individuals should “perceive that it’s doable to determine one‘s destiny without asking permission.”

He brings up the example of smartphones which are “penetrating Africa at a good pace,” to illustrate that Africa can pick up new technologies and run with them. As much as 46% of the Subsaharan population in Africa has a smartphone and, as evidenced, mobile money is booming.

“The biggest challenge is to teach young people that a simple telephone and an internet connection are effective weapons to protect themselves from the CFA by adopting Bitcoin.”

For Idrissa Seck, a Bitcoin enthusiast and a payment agent at French bank Société Générale, understanding money is the key to unlocking an understanding of Bitcoin. “In order to understand and ultimately fall in love with Bitcoin, you have to understand money and the current financial system,” he told Cointelegraph.

Mobile money payments next to MasterCard, Visa and now Bitcoin. Source: Cointelegraph

Dieng repeats, “education, education, education,” adding that you must spend “at least 50 hours learning before investing in crypto.”

With regard to the future of Bitcoin and cryptocurrencies in the CFA zone, Gloire takes inspiration from the “Salvadorian experience,” which is “going quite well.” The first country to adopt Bitcoin as legal tender, El Salvador’s hotly awaited Bitcoin bonds are imminent. For Gloire:

“Several other countries could certainly include Bitcoin among the means of raising funds without going through institutions with rarely positive interests for the abundance of populations.”

Africa has all the substances to make significant use of cryptocurrencies, in line with Mama Bitcoin. It’s on a path to higher freedoms. It comes again to the notion that “Bitcoin belongs to everyone.”

Nourou of Bitcoin Senegal sums up Bitcoin and Africa’s relationship finest. When requested if the creator of Bitcoin, Satoshi Nakomoto could possibly be an African, he replies:

“What do you mean? Satoshi is African.”

Sourced Merchandise