Third world countries, like those in Asia, South America and mine here in Africa, could all really benefit from an adoption of blockchain technology and cryptocurrency. And the reasons are multiple, which I will go into here. Cutting edge technology like this will benefit those who are early adopters. We are at the cusp of the fourth industrial revolution and third world countries, like ours could actually use this turning point to leapfrog ahead and find themselves a world leader overnight. It will benefit the economy, the government and most importantly the people themselves on Main Street. No longer can we allow the elite of Wall Street and the finance sector to be the only ones to make advancement while the vast majority of us are left in the gutter of history, picking up the scraps, and today our weapon of choice is the open, transparent distributed ledger technology of our new digital era.
In some first world countries, as well as emerging markets like China, we see an interest in central bank digital currencies (CBDCs), and the race is on to turn the world money system into a cashless digital one. It’s inevitable and we can’t stop it now, for better or worse. However, emerging leaders like India are still dragging their feet on the adoption because they want to keep their systems of control in place, I presume. One minute they are banning digital assets, and the next we see their Supreme Court reversing that law as unconstitutional. So the debate rages on and slows the adoption, when we should be leaping at the opportunity to streamline and improve the financial system’s efficiency.
India already banned large denomination bank notes, taking them out of circulation, precisely for the reason of curbing black market activity, but they stopped there, when they could be placing all transaction on the digital ledger. Modifications by Modi (see the pun there) might be required to customise the blockchain for each country’s requirements, but this cryptocurrency revolution is here and he only gets in the way by clinging to the past systems that benefit the rich alone. Fail to make your move now and you will see China taking the lead and leaving the rest of us in their dust. And India is the first one to require a stronger defence against the rise of China – they are the immediate neighbor to the south and first in line to be ridden over roughshod as China flexes its muscles in the battle for global domination, as well as ongoing land grabs on the Kashmir border between the two new emerging world super powers.
Here in Africa, we are already China’s bitch, if you’ll excuse the figure of speech. And globally the emerging market economies are selling out to China, from South America to east Asia. So we had better step up our innovation and digital technology advancements, instead of accepting all the loan money from the red dragon, all of which come with huge obligations and loss of minerals and natural resources, including food. Here in South Africa our Reserve Bank have already discussed introducing a CBDC so it may just be a matter of time. Yet time is of the essence at this juncture in the tech race.
Emerging economies can follow the lead of USA if they wish and limit bitcoin use but they should really become informed regarding the use of a cashless system build on the blockchain architecture. India, with the second largest population in the world after China, have a huge advantage in their young population and will invariably be in the top five nations as a result, simply by sheer force of numbers. That’s how China is doing it – demographics show these nations will have massive GDP, as well as local economic growth based on internal consumer growth, regardless of international trade. The exponential effect of population growth is unstoppable at this rate, and all those people will want their efficiency of money and velocity of money smoothed out and improved. And the nations who can facilitate that will lead the race to become the biggest GDPs, ultimately even outpacing USA. Someone needs to keep up with China, and India is the closest competitor, both literally and in numbers.
Nigeria, Brazil and some other nations also show demographic and economic potential as leaders in time, and with blockchain and digital finance they will be able to compete with the biggest of them. The global map will not look the same in a decade from now, at least economically, and possibly politically if not geographically. And these large nations are all home to the millions of migrant workers who ply their trade in foreign lands in order to send money home to the family. This remittance system – sending money home monthly – is a multi billion dollar industry in itself. Unfortunately Indians, for example, were forced to pay 6% of their $83 billion sent home in 2019, which is a huge cost in fees for middle men, when blockchain technology could remove that altogether, or at least limit it to a fraction in fees.
If you used certain cryptocurrencies to send money in cross-border payments, fees could actually be eliminated. Some coins are basically free to send, so you simply convert your hard earned cash – any amount you like - into something like Dash, XRP, Cardano, etc and send it to your family anywhere in the world for less than a few cents, and they can cash it out for use. Argentina, where the currency is in collapse again, is showing a massive spike in cryptocurrency adoption and use, all out of deep necessity. The cryptocurrency – in their case Dash – is so cheap, fast and easy to use, and more stable as a store of value than their own fiat currency, that it is now the preferred system to trade, pay for services, or buy and sell goods. In other words already cryptocurrency is on the way to surpassing a collapsing fiat currency. And more nations may go the way of Argentina and Zimbabwe and Lebanon, as their fiat currencies go down in the flames of hyper-inflation due to excessive money printing.
Having said that, I can’t help but think of the mighty USA doing exactly the same type of mass money printing right now in their attempt to prop up their currency, which is also the entire world’s currency in a big sense. Such unprecedented and massive currency printing, in the name of QE, can only lead down the same road as Argentine or Venezuela – to hyper-inflation and devaluation of the dollar. Purchasing power evaporates and commodity prices simply sky-rocket. That’s why the gold price is today at an ATH for the decade, around $1800 an ounce. And all prices will follow, like food and all the basics for our survival.
Now these leading nations may be reluctant to use bitcoin but they can use the same blockchain technology to create their own CBDC instead. It will be centralized of course, but it will assist in stamping out another problem that is plaguing the economy of most nations, namely corruption. From the top to the bottom, and especially with the middle men bureaucrats in government in some third world nations, there is so much bribery and skimming off the top, that the systems of the economy don’t flow smoothly and they are leaking like a sieve. So much is being lost to theft, and yet this could all be stopped overnight by using a digital ledger technology like blockchain to verify all money transfers. Transparency International is an anti-corruption watchdog agency that tracks each nation’s standard of honesty and my nation is way down the list, along with so many third world nations here in Africa and Asia too. South Africa is at no 70 on their list, with India and China at no 80. Pakistan is at no 120 – not looking too good there. At least you’re not ranked at no 173 like Afghanistan. Nevertheless much of this corruption, often petty government or civil servant theft, can be eliminated when one can see the exact flow of currency on the blockchain ledger. The nation who adopts this solution soonest, will be the leader of tomorrow.
Refs: https://www.transparency.org/en/cpi/2019/results/table
https://decrypt.co/34030/five-reasons-why-india-is-crying-out-for-a-crypto-revolution
(image pixabay)