The operators of Bitcoin (BTC) predict that Bitcoin (BTC) has the possibility of outrunning and replacing the dollar and other currencies that are difficult to transact in some parts of Africa. Some multinational companies engaged in the services of virtual currencies such as Bitcoin (BTC) and cryptocurrencies are predicting that Ghana will be the first country on the continent to accept Bitcoin (BTC) as payment. This is as a result of the increasing number of Ghanaians that are said to be engaging in virtual currencies despite a warning from the Bank of Ghana urging the public to stay away from it.
The CEO of BitPesa, a virtual currency operator, Elizabeth Rossiello stated that Bitcoin (BTC) will soon replace the U.S dollar as the main intermediary currency for Africa countries trading abroad. She further stated that African countries who have their local currencies dollarized get stuck, that is, unable to perform certain transactions. To add, purchasing items becomes more expensive.
IS BITCOIN (BTC) TO REPLACE THE DOLLAR OR LOCAL CURRENCY?
The CEO of Coinbase pointed out in one of his tweets time back that, many will find this crazy, but I think Bitcoin (BTC) could surpass the dollar as reserve currency within 10-15 years. But still, one concern may stand out, its volatility and the fluctuations.
Bitcoin (BTC) comes as a great replacement for the U.S. dollar and not the local currency. It will lead to the stabilization of the economy and hence Africa should take advantage of it. Bitcoin (BTC) will help trade with other currencies and still maintain its value and will provide better gains as its value rises in the market. Stressing the need for African countries to accept and legalize Bitcoin (BTC), Rossiello maintained that African countries will be the best to gain from Bitcoin (BTC) transactions. The currency can help reduce exchange rate volatilities in African countries by making local currencies stable.
What we see is a need for a middleman for all payments. In Uganda, there are some shops that are accepting Bitcoin (BTC) as payment. It can help trade with other currencies which never used to be easy. The fluctuations have been a source of income for most of the people who are using Bitcoin (BTC) for trades, and occasionally for storing their funds. Although it’s a risky behavior, and some African leaders are cautioning youths who are engaging in cryptocurrency without clear knowledge.
DANGERS OF BITCOIN (BTC)
Touching on the dangers involved in Bitcoin (BTC) transactions, Rossiello, pointed out that it is good the Bank of Ghana and other central banks across the continent have cautioned their citizens to be careful. This is mainly because there are no rules on Bitcoin (BTC) in the country yet. This can be linked to the reason why the government has not yet come up with a better assessment of the currency.
WHAT ARE THE POSSIBLE EFFECTS?
The effects of Bitcoin (BTC) replacing the dollar will be looked at in both positive and negatives.
Positive impact includes;
1. The stabilization of the countries exchange currency
2. The ability of citizens to easily purchase other currencies which used to be difficult.
3. It will help the country to combat inflation.
4. Bitcoin (BTC) will help trade with other currencies while maintaining its value and will produce a better gain as its value rises in the market.
5. The currency can help reduce exchange rate volatilities in African countries by making local currencies stable.
The negative aspects of the coin replacing the dollar will be linked to the cryptocurrency’s volatility and fluctuations in the market and it coming without any form of financial assistance. But, Bitcoin (BTC) has already assisted in stabilizing local currency of some African countries. BTC played a very big part in the unstable financial systems in Zimbabwe which, based on records, experienced one of the highest rates of inflation. During the period of inflation in the country, people turned to Bitcoin (BTC).
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