Many analysts expect a big bitcoin explosion in Africa in the coming years. There are already hints that bitcoin payments will become more common in Ethiopia and throughout Africa.
This is because bitcoin is viewed as a reliable store of value, especially in nations where fiat currencies are volatile. The Ethiopian birr is a good example.
Bitcoin in Ethiopia and Africa
Many have said that cryptocurrencies have the ability to disrupt established financial institutions, and recent trends show that bitcoin use in Africa is increasing. The number of monthly bitcoin transfers under $10,000 into and out of Africa grew by 56% in June 2020 compared to the same time last year. June 2020 trades totaled $316 million. Nigeria, South Africa, and Kenya were among the greatest donors to this volume of bitcoin payments.
However, Ethiopia is clearly spreading bitcoin. Decentralization is one of the most compelling features of bitcoin, since it implies that the value of bitcoin is not linked to the success of a national economy.
This has been one of the main incentives for using bitcoin in Ethiopia, where the birr is known for its volatility.
Ethiopia today unveiled new Birr notes for 10, 50, and 100, as well as a new Birr 200 note. The new notes will deter unlawful activity, corruption, and smuggling. The new notes’ enhanced security measures will also stop counterfeiting.
New birr notes in the denominations of 10, 50, and 100, as well as a new 200, show this. The Ethiopian government took this step to tackle 20% inflation and liquidity difficulties. Bitcoin’s cashless nature makes it more appealing to local consumers and companies. The birr may change, but bitcoin will not. This gives it an alternative to Ethiopia’s fiat money.
African businesses accept bitcoin payments
Sad to leave Africa…for now. (Especially bitcoin!) Africa will shape the future. I’ll be living here for 3-6 months in mid-2020. Glad I got to see a little of it.
Jack Dorsey, co-founder and CEO of Twitter, is a huge supporter of Africa’s bitcoin future. In future efforts to create bitcoin in Africa, Dorsey’s name may come up. However, without the help of wealthy foreign investors like Dorsey, African firms have been using cryptocurrency for many years.
In Ethiopia, the Yirgacheffe Coffee Producers Union is one significant collective using blockchain technology. The Union has started exporting coffee and receiving payments in bitcoin, and hopes to use blockchain to make wages and commerce more equitable. People have also benefited from bitcoin. Hanna Teklie is an Ethiopian businesswoman who migrated to South Africa and built a pan-African marketing network. Teklie is a bitcoin broker that helps Ethiopian traders buy bitcoin mining equipment.
While that kind of company enriches crypto speculators, the typical African consumer will gain from bitcoin’s practical implementation. Bitcoin payments are becoming more popular throughout Africa. The finest South African online casinos like Punt Casino and African Grand allow players to deposit and withdraw payments through bitcoin. Including bitcoin alongside established payment options like Visa and Mastercard helps standardize cryptocurrency usage.
Bitcoin ATMs, which have sprung up all across Africa, make this even more apparent. These machines are frequently found in cities and enable customers to purchase and trade bitcoin. Ghana, Uganda, and Nigeria already have ATMs, and it is just a matter of time until Ethiopia does too. Around 1,000 Ethiopians invested in bitcoin in 2018. In the next years, more African businesses will be exploring the possibilities of cryptocurrencies.
Despite the government’s efforts to create additional fiat currency denominations, the attraction of bitcoin payments should continue to grow in Ethiopia. Several other African economies, including South Africa, Nigeria, and Ghana, are anticipated to follow suit.