Nearly 150 million people use the Financial Community of Africa (CFA) franc every day, from Senegal in the far west to Gabon in the center of the continent.
The CFA, used in 14 countries, is pegged to the euro, printed in France and monetary policy controlled by Western powers. As Fodé Diop, a Bitcoin (BTC) Lightning developer from Senegal details“the IMF and the French government are still in control of the currency.”
While its official peg to the euro is 1 euro to 655.96 CFA francs, its purchasing power has eroded over time. In 1994, the World Bank devalued the CFA franc against the franc from 1:50 to 1:100. That year, West Africans woke up and realized that the value of their savings had been halved.
Gloire, the founder of Kiveclair, a Bitcoin Beach-inspired refugee project in Congo, told Coin-Crypto that the CFA is “making whole countries dependent” and “usually the poorest who suffer.” He explained the situation in 1994:
“The most notable example is that of 1994 when France and a privileged few decided to devalue the CFA franc. There is no guarantee that something like this won’t happen again, especially as the global economy is under threat.”
Before the creation of Bitcoin, West Africans could store their money in euros, US dollars or traditional stores of value: real estate and commodities. However, those options are not readily available to ordinary people.
Mama Bitcoin, the first retailer to accept cryptocurrency in Senegal, told Coin-Crypto that the CFA is “disempowering”. She suggests that Bitcoin could provide a way out.
“Our money belongs to France, the CFA is made in France and is – for lack of a better word, colonial money. However, Bitcoin belongs to everyone.”
Indeed, with the advent of Bitcoin and cryptocurrencies, there is now a viable alternative. Gloire suggests that “Bitcoin could help the countries of the CFA zone free themselves from France to finally turn the dark page of colonization.”
In Senegal, Mouhammad Dieng, co-founder of SenBlock, a crypto promotion and adoption non-profit, told Coin-Crypto that he “don’t like the CFA because monetary policy doesn’t allow us to develop. Bitcoin is a less risky alternative. to make the switch to an African digital currency.”
Interestingly enough, the hope of replacing the CFA is not limited to cryptocurrency proponents. Governments of West African countries have spoken out in their efforts to improve develop the CFA and some autonomy.
With current monetary policy, CFA countries are required to send more money to France than other countries because of colonial ties – there is no sovereignty above the coin.
A new currency called the ECO was violated as a replacement for the CFA. However, it would still be pegged to the euro and biased towards France. As for digital currencies – which Dieng mentions – the e-Naira, the digital version of Nigeria’s neighboring currency, has influenced the opinion of the CFA governments regarding digital currencies and CBDCs. However, an e-ECO or e-CFA is not yet planned.
Nevertheless, the chance of a stronger currency in the African CFA territories is huge. The GDP of the CFA region is approximately $170 billion and includes 14 independent countries. It is a huge region with huge untapped resources, especially agriculture and minerals.
Pape Alioune, a software engineer who founded Shintsha, a cryptocurrency exchange that enables payments via mobile money, told Coin-Crypto: “‘What country can develop without its own money or, better yet, a neutral money?”
The Senegalese-South African team behind Shintsha, soon to be renamed Mole App, has come up with an innovative way to tackle low banking levels in Africa. The exchange hopes to get more and more Africans on board Bitcoin and crypto via mobile money, an Africa-focused solution.
Mobile money, originally derived from a Kenyan invention called M-Pesa, allows SIM cardholders to pay each other with credit. It is incredibly popular in Sub-Saharan Africa, from Senegal to Somalia to Malawi. Orange Money is one of the most popular outlets, although Free Mobile and Wave also exist.
The myriad of mobile money options available to West Africans. Source: CoinTelegraph
Alioune estimates that “more than 80% of the adult population uses mobile money in Senegal, and it is comparable in other countries that use the CFA.” Africans use the technology the same way Northern Europeans use contactless payments – it has become a reflex, part of the daily routine.
While there is a sense of optimism in West Africa regarding the future of cryptocurrency and more routes to buy crypto, “education remains the main hurdle to overcome.” That is according to Nourou, the founder of Bitcoin Senegal who is on a mission to facilitate Bitcoin adoption in his home country.
For Nourou, as the literacy rate in his home country is only 50%, he speaks with entrepreneurs, entrepreneurs and educated members of the community. “Most people in West Africa have at least heard of Bitcoin. It’s a matter of reaching the right people and spreading awareness,” he told Coin-Crypto.
Nourou agrees with Gloire that it’s not just about Bitcoin, it’s “absolutely necessary to educate people about money”. Gloire adds that while learning about money is essential, people “need to understand that it’s possible to decide your fate without asking permission.”
He cites the example of smartphones “penetrating Africa at a good pace” to illustrate that Africa can pick up and work with new technologies. A whopping 46% of the Sub-Saharan population in Africa owns a smartphone and, as it turns out, mobile money is booming.
“The biggest challenge is teaching young people that a simple phone and an internet connection are effective weapons to protect themselves from the CFA by adopting Bitcoin.”
For Idrissa Seck, a Bitcoin enthusiast and payment agent at French bank Société Générale, understanding money is key to understanding Bitcoin. “To understand Bitcoin and ultimately fall in love with it, you need to understand money and the current financial system,” he told Coin-Crypto.
Pay mobile money in addition to MasterCard, Visa and now Bitcoin. Source: CoinTelegraph
Dieng reiterates, “educate education, education,” adding that you should “spend at least 50 hours learning before investing in crypto.”
Regarding the future of Bitcoin and cryptocurrencies in the CFA zone, Gloire takes inspiration from the “Salvadorian experience”, which is “going pretty well”. The first country to adopt Bitcoin as legal tender, El Salvador’s highly anticipated Bitcoin bonds are imminent. For Gloire:
“Several other countries could certainly include Bitcoin in the means of raising funds without going through institutions that rarely have positive interests for the plethora of populations.”
Africa, according to Mama Bitcoin, has all the ingredients to make meaningful use of cryptocurrencies. It is moving towards greater freedoms. It comes back to the idea that “Bitcoin belongs to everyone”.
Nourou from Bitcoin Senegal best sums up the relationship between Bitcoin and Africa. When asked if Bitcoin’s creator, Satoshi Nakomoto, could be an African, he replies:
“What do you mean? Satoshi is African.”