ZoneBitcoin EditorialAccording to a recent report by Bloomberg, Ghana is experiencing one of the most serious financial crises in its history. The report, released this weekend, says 70 Ghanaian investors are affected by a “cleanse” of the country's banking sector.
Let’s take a closer look at this.
Is it time for one of the fastest growing economies in Africa to turn to cryptoassets in pursuit of financial freedom?
If today we speak specifically about Ghana, it is with the indirect aim of ringing other bells for other African countries.
A banking crisis that has been raging for 3 years
Why do Ghanaians need bitcoin now, more than ever? The Ghanaian banking crisis began on August 14, 2017. The Bank of Ghana revoked the licenses of UT Bank Ltd and Capital Bank Ltd and approved a purchase and assumption transaction with GCB Bank Ltd which then transferred all deposits.
The following year, the Bank of Ghana subsequently revoked the universal banking licenses of five banks, including UniBank Ghana Limited, Construction Bank, Sovereign Bank, Royal Bank and Beige Bank. In addition, it issued a license to a newly established bank – Consolidated Bank Ghana Limited -, 100% owned by the Government of Ghana.
After a difficult period dealing with the aftermath of the banking sector upheaval, the BoG then revoked the licenses of 23 insolvent savings, loan and finance companies just a few months ago (as of where we are writing this article in October 2019)
The crackdown, which caused many local lenders and thrifts to close their operations, “triggered a wave of fund management,” most of which were not liquid enough to satisfy the demands of their investors.
This is why 70 Ghanaian investors are believed to have no access to $000 billion in investments, more than a third of the private funds sector in Africa.
This is where we can come back to the fact that bitcoin seems a very good alternative. Unlike the traditional system, Bitcoin and other decentralized technologies do not need an intermediary.
If you invest in the right products and with the right infrastructure, you should be the only one who can manage your Bitcoin and cryptocurrency investments.
This crisis in Ghana is somewhat reminiscent of what happened in Cyprus about five years ago. For those who don't remember, the European island nation was forced to bail out its commercial banks, resulting in thousands losing their savings.
The ideal time to consider the contribution of cryptocurrencies?
With the current turmoil in the financial ecosystem in Ghana, one may ask the question: “Is it time for Ghanaians to view crypto-assets as investments with real ownership and transparency? valid?"
Bitcoins and other decentralized cryptocurrencies fit perfectly in such situations. For investors and consumers to escape the uncertainty of such a disorganized space, they will need to hold assets that they directly control.
Cryptocurrencies allow users to own their assets and give them independence from regulated, traditional and established systems. With cryptoassets, no financial institution is responsible for the safekeeping of your funds and therefore cannot mishandle your funds.
Let's not forget that the appearance of Bitcoin took place in 2018, just after the global financial crisis which brought down Goldmans Sachs. Bitcoin - according to its inventor - was intended to be the unstoppable means of avoiding artificial bank bailouts....
This is also why for many African economies, such as Zimbabwe, it is a solution that is fully discussed. This is, moreover, the case of "Mano" project » carried by Ethiopian bitcoiners who claim that bitcoin could help the country grow exponentially.
Unlike the current situation where thousands of Ghanaians are unsure about the future of their funds due to changes in the financial sector over the past three years, cryptocurrency users still have control of their funds and can access it at any time.
Imagine a pregnant woman in a village in Kumasi, Ghana, who kept her money in a savings and loan institution before giving birth to the bank, but cannot access her funds. She cannot access it and therefore pay the hospital because the banking establishment has gone bankrupt. A situation, certainly, dramatic but oh so real...
It is in such financial situations that the advantage of cryptocurrencies takes on its full meaning.
If she held bitcoin instead, she could pay in BTC or easily exchange it into local currency, paying her bills without any hassle.
An ever-growing craze for cryptocurrencies in Ghana
Perhaps the situation of the pregnant woman described above has already been notified by many people in the country. Similar situations make many people turn to cryptocurrencies, especially bitcoins.
Moreover, according to Elizabeth Rossiello, the CEO of BitPesa, Ghana is the second country in West Africa (after Nigeria) to allow commercial transactions in bitcoins through the BitPesa platform.
BitPesa allows you to settle transactions in bitcoin. The company was created in Nairobi in 2013 and is now established in Kenya, Nigeria, Uganda, Senegal, Morocco and the DRC.
Other countries are on the waiting list for an ever greater expansion of the use of cryptocurrencies in Africa.
Ghana, a pioneer country in the use of cryptocurrencies in Africa
Currently, Ghana ranks third among countries listed on Google Trends for the keyword search term "bitcoin" and Accra ranks second for the keyword search term "buy bitcoin". That's how strong and persistent this craze is. We can also mention this group of young people who work on the development of blockchain projects in the country, with specific axes such as tradeEg.
With a more deliberate push towards education and adoption – such as the BlockTech Women's Conference, held last week in Accra 2019 – the existing interest in cryptocurrencies could translate into growing adoption likely to disrupt the West African country's current financial system.
Moreover, this situation in Ghana may recall the major crisis that the country is currently going through.'Argentina. Basically, are you waking up and realizing that cryptocurrencies are the unstoppable solution to failing banking systems?
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