With the rapid rise of cryptocurrency, digital currencies have become the new trend in the financial market. The beginning of 2020 saw a rise in the popularity of digital currency with various advanced countries like China launching their Digital Yuan, Britain launching Bitcoin.
African countries are not left out in this digital race. According to the 2020 Geography of Cryptocurrency Report by Chainalysis, people across the continent are estimated to have risen in their on-chain cryptocurrency activity from 67 percent in October 2019 to 78 percent in 2020.
This growing increase has made some African countries consider the idea of adding digital currencies to their legal tender. Here are four African countries that are buying into the digital currency hype:
In 2019, Tunisia became the first African country to adopt a digital currency called E-Dinar. The E-Dinar was officially launched at the Forex Club of Tunisia, with a transfer of one E-dinar between the head of the central bank, Marouane El Abassi, and a representative of the International monetary fund (IMF). E-dinars are available to transfer between citizens, with shops, cafes, and restaurants slate. The central bank also plans to use it in cross-border payments as time goes on.
Senegal followed Tunisia’s lead and launched a block-chain based digital currency known as eCFA. The digital currency has the same value as the current currency, the CFA Franc, and can be stored in all mobile money and E-money wallets.
In terms of security, the developers say that the currency will be secured by cryptographic protocols to ensure that it cannot be counterfeited.
Ghana recently announced its intention to pilot a central bank digital currency (CBDC). The Digital currency which would be tested in banks, payment service providers would be launched in September this year. The e-cidi is expected to be more efficient than the traditional cidi. It is also required to be more cost-effective for online and consumer transactions.
Amidst the central bank of Nigeria’s initial ban on cryptocurrency earlier this year, CBN is expected to launch the E-naira on October 1st. The resolution was made at a stakeholder’s meeting where the CBN stated its intention to adopt a digital currency due to the point that about 80% of central banks globally are exploring the possibility of adopting their own digital currency and Nigeria cannot be left behind in this pursuit. CBN said the importance of its digital currency will include macro-management, cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.