Nearly 150 million people use the franc of the Financial Community of Africa (CFA) on a daily basis, from Senegal in the extreme west to Gabon in the center of the continent.
Used in 14 countries, the CFA is pegged to the euro, printed in France and its monetary policy is controlled by Western powers. As Fodé Diop, a Bitcoin (BTC) Lightning developer hailing from Senegal details, “the IMF and the French government still control the currency.”
While the 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 to realize the value of their life savings had been slashed in half.
Gloire, the founder of Kiveclair, a Bitcoin Beach-inspired refugee project in the Congo, told Cointelegraph that the CFA “makes whole countries dependent,” and “it is usually the poorest who suffer.” He explained the situation in 1994:
“The most striking example is that of 1994 when France and a privileged few decided to devalue the CFA Franc. There is no guarantee that such a thing will not happen again, especially since the global economy is threatened.”
Prior to the creation of Bitcoin, West Africans could store their money in euros, U.S. dollars or traditional stores of value: real estate and commodities. For everyday people, however, those options are not readily available.
Mama Bitcoin, the first retailer to accept cryptocurrency in Senegal, told Cointelegraph 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 want of a better word, colonial money. Bitcoin, however, Bitcoin belongs to everyone.”
With the arrival of Bitcoin and cryptocurrencies, indeed, there is now a viable alternative. Gloire suggests that “Bitcoin can help the countries of the CFA Zone to free themselves from France to finally turn the dark page of colonization.”
In Senegal, Mouhammad Dieng, co-founder of SenBlock, a nonprofit organization for crypto promotion and adoption, told Cointelegraph that he doesn’t “like the CFA, because its monetary policy does not allow us to develop. Bitcoin is a less risky alternative to make the transition to an African digital currency.”
Interestingly enough, the hope to replace the CFA is not restricted to grassroots cryptocurrency advocates. Governments of West African countries have been vocal in their efforts to improve the CFA and develop some autonomy.
With the current monetary policy, CFA zone countries are obliged to send more money to France than other countries due to colonial ties — there is zero sovereignty over the currency.
A new currency called the ECO was flouted as a replacement for the CFA. However, it would still be pegged to the euro and biased to France. Concerning digital currencies — which Dieng mentions — the e-Naira, the digital version of neighboring Nigeria’s currency, has influenced the view of the CFA governments with regard to digital currencies and CBDCs. However, an e-ECO or e-CFA has not yet been planned.
Notwithstanding, the opportunity for a stronger currency in the CFA African territories is vast. The GDP of the CFA region is roughly $170 billion and covers 14 independent countries. It’s a huge region with tremendous untapped resources, particularly agriculture and minerals.
Pape Alioune, a software engineer who founded Shintsha, a cryptocurrency exchange that allows payments via mobile money, told Cointelegraph: “‘What country can develop without its own money or, better yet, a neutral money?”
The Senegalese–South African team behind Shintsha — which will soon rebrand to Mole App — has created an innovative way of addressing the low banking levels in Africa. The exchange hopes to onboard more and more Africans into Bitcoin and crypto through mobile money, an Africa-centric solution.
Mobile money,…
Read More: cointelegraph.com