Can Bitcoin be a solution for the African economy?

While the price of bitcoin has surpassed $17,000, Africa is considering the interest of virtual currencies.

The IMF looked at the rise in the price of bitcoin with some interest. Indeed, the international organization believes that this cryptocurrency could well have a bright future on the African continent and, more generally, in all developing countries. For Christine Lagarde, the IMF Director, there is no question of "rejecting virtual currencies." According to her, "cryptocurrency will have a role to play in developing countries. For example, think of countries with weak institutions and unstable currencies. Instead of adopting another country's currency, such as the U. S. dollar for example, some of these economies could see an increasing use of virtual currencies," says the IMF official, who calls this "dollarization 2.0." Instead of using the currency of another country, such as the U. S. dollar for example, some of these economies could experience an increasing use of virtual currencies.

Virtual currencies indexed to the dollar?

The International Monetary Fund could even play a role in the development of Bitcoin in Africa. "The IMF's experience shows that there is a tipping point beyond which coordination around a new currency is exponential. In Seychelles, for example, dollarisation jumped from 20% in 2006 to 60% in 2008." Christine Lagarde also estimates that virtual currencies "could be issued at a one-to-one exchange rate with the dollar, or tied to a stable basket of currencies. The issue could be entirely transparent, governed by a credible and predefined rule, a controllable algorithm... or even an ' intelligent rule' that could reflect changes in macroeconomic conditions."

According to ECOFIN, Blockchain technology could "solve Africa's development problems by improving existing instruments and developing new and effective tools for both finance and public management". According to the business community, bitcoin is now recognized by experts as a useful tool, "capable of tackling institutional weaknesses and economic and financial exclusion".

In any case, the institutions will soon have to sit around the table to discuss it. But from everyone's point of view, Bitcoin could have a real role to play on the African continent.