Africa has been dealing with inflation for quite some time now. Bitcoin and cryptocurrencies can be of big help to solving this problem for Africa. Digital assets can be substituted for local currencies. Central Banks in Africa have been compliant with policies, however this did nothing to utilize purchasing power of citizen’s money. For a while, people have associated Bitcoin with use on illegal activities, but do not realize the positive impact of it aiding third world countries and economies. As we know, Venezuela and Zimbabwe have recently dealt with dwindling economies and GDP. Now, they both have high demands for cryptocurrencies.
Fiat currency, these days, can be made out of nothing and this has been the case with banks around the world. Banks, interest rates, fluctuations in business cycles, and money supplies are causes of recessions. We will analyze inflation rates for African countries. The Federal Reserve estimates that 2% is a reasonable inflation rate for growth in the economy. With high inflation rates, people are not able to invest or save money. Inflation also causes insufficiency with capital stock and investments. In turn, this causes poverty and unemployment. 2% is the goal for every country. Can you guess which country is close to meeting these guidelines? Of course it’s the U.S. with a rate falling a little under 3%. This is not bad and is close to 2%. Nigeria and Ethiopia are just at about 15%. While Egypt is at 35% and Congo is at almost 70%! These are well over the 2% goals set by the Federal Reserve. Leading to the point that these countries are in major debt, poverty, and inflation crises. Nobel Peace prize winner Milton Friedman stated that the reason why these countries are dealing with these economical catastrophes is, “regimes or religious sects are not separated in power with central banks”. Regimes deal with things in an unethical and illegal manner, they forcefully have people to their liking elected in offices and governments. They use the government as their own personal fiat currency printing press.
The population of the African countries mentioned above, is at about 450 million. The people in these countries cannot save their money, let alone invest in anything. Cryptocurrencies can definitely be a lifesaver for these people. A person does not need a bank account, an ID, or a social security number to invest and trade in the global market. Bitcoin is still using the market share from fiat currencies to use as store value. Bitcoin is not only saving economies, but it is saving lives!