Blockchain, Cryptocurrency and Africa by Diya Wang (Georgetown University) and Zhiqiang Qing (University of Maryland), Interns
The Blockchain, Cryptocurrency and Africa panel discussion was hosted on April 10th at the African Union Representational Mission, Washington D.C. The discussion aimed to introduce blockchain and cryptocurrency to the Diaspora and African delegates in town for the Spring Meetings of the World Bank and the IMF. During the discussion, issues including defining what is blockchain and cryptocurrency, how blockchain changes the nature of money, a forecast of the development of blockchain and cryptocurrency in Africa, the impact of government regulations, current barriers to the use of these technologies and many other issues were brought up.
Cryptocurrency is internet-based money not bound by geography; transactions are stored in a database called a blockchain, a group of connected computers that record transactions in a ledger in real time. Many experts say the conditions on the African continent are great for cryptocurrency. Interest in cryptocurrency in Africa keeps increasing despite the medium’s controversy. One of the main reasons that Africa is turning to cryptocurrency is to fight high inflation. For example, when Zimbabwe’s inflation skyrocketed in 2015, some Zimbabweans turned to Bitcoin. Also, the large increase in mobile technologies usage in Africa has supported the development of cryptocurrency. According to the GSM Association, there will be 725 million mobile phone subscribers in Africa by 2020, which enables more Africans to have the tools to plug into the cryptocurrency ecosystem.
Before the discussion, we were interested in this topic but were unfamiliar with the status of blockchain and cryptocurrency in Africa. We were surprised to learn how enthusiastic many on the continent are toward this new technology, as evident during the discussion. It was also interesting to learn about some of the limitations, the double spending problem, for example, in the process of developing such innovations. We also learned a lot about the emerging markets’ perspective toward some controversial financial instruments.
Today, our world is welcoming another transformational stage, where technology and innovation are reshaping the whole society. Blockchain and cryptocurrency are leading technologies that have the power to reshape the world. As William Michael Cunningham, CEO of Creative Investment Research, commented at the conclusion of the event, “The functionality of cryptocurrency is superior to that of paper money. Eventually, cryptocurrency is going to dominate.”