Guellord MbusaSending money across Africa is a bit like trying to walk through a minefield in papier-mâché shoes. This is a challenge that the African diaspora faces the most. Indeed, when you want to send money to Africa using traditional or modern methods such as mobile money for example, it is better to be ready to say goodbye to your time and a good part of your money.
Why is it difficult to send money across Africa and why is sending Bitcoin a preferable alternative?
Hold on tight, because in this article we'll explain this complex mix of high transfer fees, foreign exchange costs and currency conversions that will make you cry. Furthermore, we will show you how Bitcoin is emerging as a promising alternative and a solution to these problems.
The financial challenges of the African diaspora and the fight against poverty
Despite notable economic progress in certain regions of the world, Africa remains faced with a stubborn challenge: endemic poverty. This persistent situation is rooted in a complex web of factors, including corruption, political conflict, social and economic inequalities, and barriers to access to education and health care. These financial obstacles force thousands of young Africans to consider perilous migrations. They have no choice but to seek more promising economic horizons in order to help their loved ones.
Once established, the African diaspora, scattered across the four corners of the planet, plays a crucial role in providing financial support to families remaining in Africa. However, the transfer of money to the continent is hampered by exorbitant transfer costs. Banks and specialized companies in France, for example, impose fees up to 6,7% on transfers outside the European Union. Thus, for a simple transfer of €150, the consumer will be billed €10,03 in fees. For many Africans, these services feel like highway robbers, leaving beneficiaries with crumbs instead of the promised cake. Additionally, families will need to be patient, as processing speeds are as slow as a snail on sleeping pills.
This obstacle course results from the fact that African countries do not have solid financial institutions and their currencies do not inspire confidence.
Therefore, the money must pass through several banks to reach its destination. This involuntary journey leads to additional fees from correspondent banks and currency conversion fees. And as if that wasn't enough, the lack of infrastructure and regulatory barriers join the party, increasing the bill even further.
Of course fintech solutions like Waves or even mobile money can prove more interesting than traditional methods like Western Union. However, this remains expensive and somewhat complex to set up (travel, sending documents, etc.).
Faced with such complications, a cheaper and faster alternative then takes on a whole new dimension: the Bitcoin.
When Bitcoin comes to the rescue of the African diaspora
At the heart of financial tumults, the African diaspora discovers an unexpected ally in its fight against the exorbitant fees of traditional transfer services.
- Bitcoin transactions offer an alternative more economical and faster, thus allowing a more efficient financial flow to Africa. This emerging technology has the potential to reduce financial barriers that hinder financial support internationally, providing a glimmer of hope to African countries.
- La decentralized finance (DeFi), introduced with bitcoin, reveals the potential for economic transformation on a continent-wide scale. Where financial obstacles erected impenetrable walls, bitcoin emerges like an electronic key, opening previously locked doors. It is an underlying revolution, a financial upheaval that promises to shake the foundations of financial control on a global scale.
This emerging technology, far from traditional palaver, offers a glimmer of hope in Africa's often dark skies. It is a digital outburst, a mocking laughter addressed to the excessive costs imposed by traditional finance. Who would have thought that one day, financial salvation would come dressed in bits and bytes, ready to defy convention with a well-established electronic smile? Africans are the ones who, first, must say a big thank you to the famous anonymous, Satoshi Nakamoto.
Bitcoin enables a money transfer system with minimal fees
At the heart of the tumultuous agitation of global financial markets, Bitcoin presents itself as a liberating Messi, carrying a reckless vision: to free individuals from the oppressive constraints of the conventional banking system. Born from the imagination of an enigmatic pseudonym, Satoshi Nakamoto, this decentralized network aims to go well beyond the aspect of a simple digital currency.
Indeed, bitcoin truly embodies a counterbalancing force to monopolistic financial institutions. It is especially on the African continent that its potential shines brightly, where limited access to traditional financial structures erects insurmountable barriers. Bitcoin is shaping up to be an ideal cross-border transfer route, freed from the burdensome fees imposed by orthodox banks known as remittances. A refuge has a particularly overwhelming burden for the African diaspora. This cryptocurrency thus commits to democratizing financial flows, injecting tangible hope into African populations in search of inclusive, equitable and decentralized solutions.
How bitcoin makes it easier to transfer money in and to Africa
As mentioned at the beginning of this article, financial transfer to Africa and, or between African countries is a complex and laborious process.
To understand this, let me give you a picture. For example, for a Zimbabwean who wishes to send a few banknotes to a friend residing in Rwanda, he must change his currency at least three times.
The remittance service provider will then find themselves juggling Zimbabwean dollars, before converting them to a more universal currency such as the US dollar or Euro, before engaging in a meticulous dance to convert it back into Rwandan francs. It is therefore possible that our Zimbabwean friend's few notes made a trip to an American bank before reaching his destination.
This approach generates additional costs depending on the transit banks and currency conversion rates. All this without mentioning, and long processing times.
And if that wasn't enough, infrastructural gaps and regulatory barriers join the celebration, further amplifying transactional spending.
Fortunately, bitcoin presents itself as an enlightened response to this challenge. It doesn't bother with the beaten paths of other money transfer services. It's a money transfer system that does things differently using blockchain infrastructure, and you don't need to become a Bitcoin guru to use it.
Crypto platforms for the uninitiated
Of course, to send bitcoin to another person, all you need to do is have a bitcoin wallet and make a transaction. The recipient receives the bitcoin directly in their wallet and can therefore use it freely. He can spend it or choose to convert it into local currency, using peer-to-peer platforms for example, such as Noons, widely used in Africa.
However, some people in the diaspora are confronted with the fact that the recipients are not necessarily fans or users of bitcoin. What to do in this case? Well, with platforms such as Bitnob, it is possible to send funds in bitcoin without needing to first have bitcoin. Your fiat currency is then converted into bitcoin before being converted back into the local currency of the recipient's country. And believe me, this process is faster than the fastest pizza delivery guy on your block.
Thanks to the lightning network of Bitcoin, transactions have become fast.
The best part of all this? Minimal fees. With bitcoin lightning, you pay a fraction of a dollar for Lightning transactions. Yes, you read correctly. A fraction. For example, if you want to send 100 euros to Africa or from one African country to another, you will only have to pay a little more than 1 euro in fees. Compare that with the exorbitant fees of traditional methods such as PayPal or Western Union, you will understand why bitcoin is an answer for the African diaspora. So the next time you want to send money across Africa without breaking the bank, just consider sending bitcoin.
Bitcoin as an alternative to the inflation of local currencies
African currencies, often with limited purchasing power, are subject to rapid depreciation due to currency fluctuations and inflation. Thus, the Sudanese pound (due in particular to the recent conflict) has experienced inflation of more than 99%, closely followed by the Zimbabwean dollar or the Ghanaian currency which exceeds 80%.
This situation of high inflation has a detrimental influence on the financial stability of families dependent on money transfers. The high costs of converting various African currencies significantly reduce the amount actually received by the recipient, presenting a significant challenge for those who rely on these transfers to meet their daily needs.
Faced with this deterioration of African currencies, Bitcoin is emerging as a robust alternative. Thanks to its decentralized nature and blockchain technology, Bitcoin offers increased security, minimizing the risk of fraud and theft. The growing growth of popularity of Bitcoin on the African continent contributes to its democratization, with more and more individuals adopting this cryptocurrency to retain value and carry out international transactions efficiently.
Conclusion
In conclusion, Bitcoin presents itself as a viable solution to overcome the financial challenges and circumvent the remittance fees that the African diaspora is severely faced with. With lower fees, increased security, and growing adoption, Bitcoin offers a promising way to facilitate financial transactions within the African diaspora.
Additionally, platforms such as Bitnob allow you to send money in bitcoin even if your recipient is not a bitcoin expert.
