In the 1st-ever Africa Bitcoin Conference conducted in Accra, the leaders from the industry explored the ways through which Bitcoin could likely transform the financial infrastructure of Africa.
The target of this move is to offer significant instruments for unbanked people going through the issues such as economic sanctions, reliance on remittances, and currency instability.
Africa Realizes Bitcoin’s Potential to Cope with the USD Crisis
Keeping in view the crisis of the US dollar, William Ruto (the president of Kenya) recently presented an exclusive proposal. The initiative has an objective for the country to buy oil with the use of the native currency ‘shilling’ to deal with the fuel shortage created by the crisis faced by the USD.
The president alleged that the fuel shortage in Kenya is being caused by the crisis gone through by the US dollar.
While responding to this, his administration has taken several measures to cope with the shortage of the USD. The respective measures take into account permitting the citizens of Kenya to obtain petrol on a 6-month credit.
Along with this, they also include making contracts with UAE and Saudi Arabia-based platforms for the provision of jet fuel, petrol, and diesel on credit.
Such contracts, supported by the arrangements between the governments, include the delivery of fossil fuels by Emirates National Oil Company, Abu Dhabi National Oil Company, and Saudi Aramco to Kenya.
This arrangement is targeted at minimizing the pressure related to the demand rate related to foreign currency. In addition to this, it also attempts to avoid the rapid slump in Kenya’s shilling in comparison with prominent currencies like the USD.
The fossil fuels-related demand has increased to nearly $500M per month in Kenya. This accounts for a considerable part of the cumulative import bill of the country.
Bitcoin could eradicate the intermediaries like conventional banking institutions to enable straight payments of digital assets between individuals with no requirement of multiple fees or credit.
The Lightning Network is known as an L2 developed on the main chain of Bitcoin. It minimizes transaction costs, along with enabling rapid payments.
This makes the top crypto token more efficient for daily usage. Firms such as Yellow Card (the biggest centralized crypto exchange in Africa) are delving into the Lightning Network. The objective is to decrease transaction charges and offers matchless international payments.
Transacting funds through the blockchain of Bitcoin has some challenges, like high fees and transaction delays at the time of extreme demand.
The Lightning Network deals with such issues. In this way, Bitcoin becomes more beneficial and accessible for widespread utilization around the entire African continent.
Notwithstanding the likely regulatory issues, the ongoing innovative initiatives could pave the way for wide Bitcoin adoption in Africa.
Jack Dorsey Says BTC Adoption Could Ultimately the Government-based Endeavors to Administer Financial Operations
This would gradually be assistive in minimizing the reliance on the USD.
While appearing at the Africa Bitcoin Conference, Jack Dorsey (the chief executive officer of Block) pointed out that Bitcoin’s wide-ranged adoption could finally undermine the attempts being made by the authorities to harness the financial operations.
He also mentioned that continuous innovation and development are significant.
The adoption of the primary crypto in the mainstream financial ecosystem of Africa is witnessing huge hindrances.
Even then, a merger of innovative technologies such as the Lightning Network, partnerships between top market players, as well as grassroots initiatives to empower and educate the common masses could be helpful. This could bring about a unique regime of financial freedom.