Africa for long has been a significant contributor towards innovation and adoption in the cryptocurrency sector. With several African countries ranking high on adoption indexes, digital assets have emerged as a financial solution for many that had earlier felt left out. Now as the industry evolves within the continent, financial experts are devising what the next collective step by government and lawmakers could be.
Speaking at the 2021 African Economic Conference, experts opined that the creation of a common cryptocurrency could boost trade in Africa and aid economic recovery from the Covid-19 crisis.
Comon cryptos can solve trade issues
CEO of the West Africa rating agency, Anouar Hassoune, further noted that such a move could not only lower the cost of conducting business but also give Africa an identity. He said,
“We need to come up with a cryptocurrency that is acceptable to each member state. It’s better to do it at the continental level, and we have the expertise to do it… It’s a matter of governance, not an issue of technology.”
He also added that such a cryptocurrency could act as an alternative to monetize from its other endowments such as gold and other commodities.
However, it was also argued that the continent would first need to synchronize national rules and protocols governing the financial systems of respective countries to make the reforms achievable.
Such a regional outlook towards cryptocurrency innovation has also been seen in other areas, such as Europe. The idea of a Digital Euro has been toyed around for quite some time by financial experts in the Eurozone. Just last week, the European Central Bank (ECB) released a paper outlining the prerequisites for successful implementation and translatability of its CBDC.
To be designed as a means of payment, the Digital Euro is expected to cut costs by eradicating the middleman and also combat the foreseeable competition of stablecoins or other CBDCs. The ECB’s main concern only rises from its potential threat to cash and other forms of fiat currency.
Since the African Union is also a functioning body overlooking financial activities among other things, it could replicate Europe’s regional approach towards cryptocurrency.
Although, the industry’s biggest African contributor, Nigeria, has already released its own CBDC called e-Naira, which could hinder its participation in such a grouping. Moreover, many countries are not as open towards the cryptocurrency revolution and hence could prove to be reluctant in embracing a common African cryptocurrency.