Is Bitcoin poor Africans’ alternative reserve currency?

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Africa’s majority poor have no means of income and those who do only have it for subsistence and not investments or any other economic empowerment endeavours.

With tech, life in Africa has become easier especially with fintech which is enabling the movement of cash resources even among the poorest.

Bitcoin, even though a foreign concept to many non-tech Africans, has been hailed as a solution for many of the continent’s challenges cutting across many sectors in addition to the financial one.

While it may be seen as a solution whose time is now to be implemented, it is not an easy ride.

In June 2019, the world’s biggest social media platform, Facebook, announced that it was getting into the cryptocurrency field to address transaction charges across the globe.

The tech giant’s founder, Mark Zuckerberg, said the social network giant was joining hands with 27 other organisations around the world to start the non-profit Libra Association. Out of this association, the organisations would create a new currency called Libra.

Early this year, Facebook said that it was shifting from making the Libra token to supporting existing government-backed currencies and the Libra token when it is eventually completed and ready to launch.

Read: Blockchain in Africa: The next frontier

With the giant’s plan seemingly having veered off course, for now, it shows that tech may not be the panacea to all our financial problems.

But according to a CoinMarketCap report released in April this year, African women are adopting the bitcoin as the covid-19 pandemic continues straining the global economy putting millions of people under financial stress.

Just like it happens with recessions, people from all walks of life started looking for alternative income streams.

The report reveals that the number of women in the cryptocurrency industry increased by 43.24 per cent in the first quarter of 2020 with another study published in December 2019 by Bitcoin (BTC) fund operator, Grayscale, showing that 43 per cent of investors interested in bitcoin are women.

This figure was up 13 per cent from 2018 and the number is actively growing.

Noteworthy, though, is that just like with other currencies across the globe, bitcoin did not survive the declining wave since it lost nearly 50 per cent of its value at 43 per cent on March 12, touching a low of US$3,900.

Across the crypto market, the sector’s cap hit a low of US$150 billion, 57 per cent lower than the previous month

Read Also : The Cryptos Evolution

In South Africa, Paxful notes that women who have started successful side hustle powered by bitcoin.

“Not only are these side jobs providing women with additional income, but they are also giving individuals an opportunity to develop new skills in the bitcoin and blockchain space. Blockchain skills are in high demand internationally and may unlock new career opportunities or set the ground for running a successful business in the future,” notes Paxful, which offers money transfer services.

According to the service provider, bitcoin already drives a whole range of entrepreneurial ventures including arbitrage, remittance, e-commerce and educational projects, to name a few, beyond speculative activities.

The company has rolled out a number of educational programmes globally to educate more people about the crypto industry especially women considering pursuing opportunities in bitcoin and blockchain.

The report notes, “While bitcoin is oft-touted as “digital-gold,” it sold off the hardest, which caused people to question its status as a purported safe-haven asset.”

Read also: How Forex Trading Is Going To Be Affected By Cryptocurrency

However, in Q1, both bitcoin and the crypto market, in general, have outperformed global benchmarks for equities, like the MSCI World Index and S&P 500.

“Our sector can still do better to attract more female blockchain professionals and entrepreneurs. At Paxful, nearly 40 per cent of our global workforce is female and we continuously keep our eyes out for more female collaborators, community builders and problem solvers,” says Tugba Abadan, Paxful’s Head of Middle East and Africa.

The company adds that it has witnessed a steady increase in the number of women participating in its entrepreneurship programme, the Paxful Peer Programme which helps crypto enthusiasts become their own bosses.

Paxful’s Community Coordinator in Kenya, Yvonne Kagondu, says that many Africans suffer the consequences of high levels of unemployment and poverty.

She adds, “It’s very important to be on the lookout for as many opportunities as possible and find one that suits you best. I found blockchain technology intriguing and decided to focus on bitcoin, which eventually led me to mentor other young female professionals and fellow small business owners.”

Another study estimates that one in three working South Africans has a side job for an extra income. The covid-19 lockdown has put millions of people under challenging circumstances as they faced losses of jobs and income opportunities.

The pandemic has pushed people to look for alternative income sources, so the interest in crypto and bitcoin entrepreneurship has grown rapidly.

As contactless payments are encouraged, people are opting for non-cash in-person trades using cashless means and bitcoin has become one of them though not as popular as others like Kenya’s M-Pesa.

As time goes by, Africa’s reserve currency may just shift bringing a change and rethink of strategies to keep established service providers afloat.

Read: Rwanda and Kenya providing rich ground for cryptocurrency growth in East Africa

 

I have 10 years of experience in multimedia journalism and I use the skills I have gained over this time to meet and ensure goal-surpassing editorial performance. Africa is my business and development on the continent is my heartbeat. Do you have a development story that has to be told? Reach me at njenga.h@theexchange.africa and we can showcase Africa together.

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