South African venture capitalist Michael Jordaan recently suggested that a single decentralized cryptocurrency could be a solution that would bring huge benefits to trade and investment in Africa. Jordaan, also the former CEO of FNB, one of South Africa’s leading banks, said that this single African currency “will greatly reduce border problems.”
Decentralized currencies in Africa
But in his tweet On April 27th, Jordaan explained why he believes that cryptocurrency (rather than fiat currency) is the solution to unlock the “world’s lowest penetration payment market”. Jordan said on Twitter:
Imagine one day, Africa has only one currency. (This currency) will make it easier to trade with each other and invest in the entire African continent. Unable to see all/most countries/regions that agree to central bank or monetary policy. It is more likely to be a decentralized cryptocurrency. But which one?
Nonetheless, venture capitalists admit that such decentralized cryptocurrencies must be “African or global stablecoins, which are not as volatile as Bitcoin or Ethereum.”
Benefits of a single currency
At the same time, a local report cited venture capitalists’ views on this idea and how countries benefited. For example, Giordaan said that because 55 African countries use 41 different currencies, this means payments are slow, expensive, and both importers and exporters face exchange rate risks. However, when African countries adopt a single decentralized currency, these problems are eliminated.
In addition to increasing inter-regional trade and investment, decentralized currencies will also prevent states from “attacking their own central banks by printing money and causing inflation.”
Although it seems unlikely that African governments will accept Jordan’s plan anytime soon, the venture capitalist said that he will continue to dream of an Africa that trades with himself like Europe and Asia, rather than relying on foreign aid.
Do you agree with Jordaan’s view that Africa needs a decentralized cryptocurrency? You can share your views in the comments section below.
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