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With the introduction of cryptocurrencies in African countries such as South Africa, Kenya and Zimbabwe, just to name a few, it also presents merchants with new business opportunities.
Currently Bitcoin is making a strong foothold in these African countries and shows no sign of losing its grip in the financial market. Bitcoin even showing signs and starting to look like the solution for the current negative financial state that Africa is experiencing.
Increasing Global Trade
One reason as to why so many people believe that cryptocurrencies will improve Africa’s growth and guarantee a more financially stable future is that it will improve our trade tremendously. Think of cryptocurrency as a language that is understood and spoken across the entire world.
In developing countries such as African countries, cryptocurrencies are actually more necessary than in first world countries such as the United States of America. This is because over there in America sending money and receiving money can be done within a matter of seconds, where in Africa it isn’t that simple.
Some cryptocurrency traders believe that people in first world countries will look to Bitcoin as an investment where countries in Africa, people will rather see Bitcoin as a new form of currency to use daily.
Going back to trading, most of the capital that flows into African countries are the result of their exports. African countries main income is from exporting of goods and services, and with Bitcoin being accepted as a form of currency it has made sending and receiving money across borders more secure and easier.
There is also scope for the use of Cryptocurrencies such such as the Ripple protocol to easily and quickly send funds from one bank to another.
Mass Population Adoption
As for the average person who isn’t part of a trading company, Bitcoin and cryptocurrency bring more opportunity to them as well. In most countries within Africa, financial services like banks and ATMs are not always available in certain areas. With cryptocurrency, it allows you to save, use, send, and receive money without having access to a bank, debit or credit cards even.
Using cryptocurrency, is also extremely safer than real currency, as cryptocurrency, is 100 percent digital, so it eliminates the risks of being stolen in robberies or other relating crime that occurs in these countries.
Using cryptocurrency to make payments costs even less than it does to send money through normal banks. This is important to know as sending money from an African country to another African country costs sometimes more than double as any other country to country transaction in other continents.
With cryptocurrencies being adopted by developing countries it guarantees a chance for them to catch up to first world countries financial wise, as it allows the price of goods and services to drop, making trade within Africa more active and affordable. Indeed, we have even seen from a South African cryptocurrency survey, that more and more people are getting used to Bitcoin.
The CEO of the Bitcoin company Bitpay, Stephen Pair says that adopting cryptocurrencies doesn’t mean that everyone will pay and be paid with Bitcoin, no. It just means that “they may perceive that they are paying in some other currency, but bitcoin will be the underlying technology that makes this work.”
So it’s clear that worldwide cryptocurrencies are creating new opportunities for businesses and consumer alike, but in developing countries cryptocurrencies is the solution to a better financial tomorrow.
8 thoughts on “How cryptocurrencies Can Be Used To Improve Payments In Africa”
Agreed. I also think countries such as Asia which have still not revolutionised the notion of micro finance.
That’s true. There are many in the world that can benefit from cryptocurrencies and micro-finance applications. The financial world is definitely changing a lot. Thank you for commenting.
I have not studied the whole bitcoin concept much so I am a bit ignorant here. Being a capitalist at heart, anything that aids in the free flow of global capital seems like a good thing to me. If I am understanding the point of the article, it seems that bitcoin and the underlying technology will assist in that area.
Tom @ Dividends Diversify recently posted…Turnabout is Fair Play! Let The Companies Do The Work.
That’s true. Bitcoin and other cryptocurrencies have the potential to aid in the flow of capital as it bypasses traditional financial channels like banks and credit cards and does so in a much cheaper and faster way. It will be very interesting to see how the crypto world plays out over the coming years. Thank you for stopping by and commenting.
Forgive me if I’m a bit sceptical, but I’m not entirely convinced. Considering that only about 2 billion people have access to the internet, and that it’s the other 5 billion people that mostly live in underdeveloped countries, how exactly are they going to use cryptocurrencies? That still requires computers and internet access, things that a lot of these people simply have no easy access to.
Not trying to be pessimistic, just genuinely interested.
Well it’s not necessarily about having a computer or an Internet connection when it comes to cryptocurrency usage in the developing world. It’s more about cel phones and data connectivity which has penetrated the developing world much more so than Internet and PCs. All you need is a cel phone with a data plan, which is already widely available, to benefit from cryptocurrency usage. You already see a wider adoption of the new technology in Zimbabwe. Thank you for sharing your thoughts.
It’s not terribly hard to save, spend, and send money. Most people have bank accounts and credit cards, and when they need to send money to a friend, relative, or acquaintance, they can use any number of online services, from PayPal and Square to SnapChat and Facebook.
I think that’s true in most of the western world but not in the developing. In those parts of the world people operate without a bank account or credit and transfer value using methods that bypass traditional financial channels. Thank you for commenting.