Bitcoin Might Blow Up Africa’s $86 Billion Banking System

March 26, 2023 11:03 am Comments

As many within the African continent may be aware, the current banking system in Africa is expensive and is extremely inconvenient for most people..

This is because there are a lot of remote and rural areas which means that digital banking options are extremely limited.

Due to this, much of the continent has been excluded from the existing traditional banking system and the majority of financial services are out of reach for the average person.

What makes crypto and Bitcoin especially good for Africa is that it is available for everyone and is a way to do transactions in real time without any need for insitutions.

It also helps bypass all the other problems that Africa is facing such as corruption, hyperinflation, and bank restrictions that all limit the financial freedom of the people.

CNBC reports:

“The entire banking system in Africa is completely and utterly broken, even amongst the mobile money providers, the telcos,” said Youssef from Paxful, a peer-to-peer crypto marketplace where users can directly buy and sell tokens with one another.

“Two thousand payment networks and only 2% of them talk to each other. That number continues to grow. It’s not getting better, it’s actually getting worse,” continued Youssef.

Bitcoin could eliminate all these intermediaries, allowing citizens to send digital payments directly to one another, without relying on credit and without incurring multiple settlement fees along the way.

“We’re going to move to a model where we can make payments without IOUs, or credit, or promises, or fiat,” said Alex Gladstein, chief strategy officer for the Human Rights Foundation, an organization that works with activists from authoritarian regimes around the world. “It’s literally like sending a piece of gold or a $20 bill instantly somewhere else.”

Basically, anyone with access to the internet can setup a crypto wallet and can settle Bitcoin payments.

This is also something that the government can’t do anything about due to the decentralized nature of digital assets and how it is not controlled by a single authority.

Of course, there are still downsides as there may be delays during peak demand times, but it overall provides a viable solution that solves many of today’s existing problems.

Investors and speculators believe that Africa will likely play a huge part in crypto adoption and expansion in the future due to its match in use cases that the people need.

How it plays out in the next decade and the timeline is still to be determined.

CNBC concludes:

“The actual location of crypto assets is an anomaly. At what point does it leave the country?” continued Marais.

Ultimately, Ngako believes that once Machankura begins to scale, it will be a major driver of bitcoin adoption across the continent. To that end, Ngako is raising money and building — a common refrain among the entrepreneurs on the ground in Accra.

As Dorsey said in Africa, “More and more mass adoption will, in my belief, take away all the oxygen” from governments attempting to control behavior through financial oppression.

“So what do we do? We build, we build, we build, we build, we build, they can’t stop us. And that’s what’s important.”

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