The Chief Executive Officer (CEO) of both micro-blogging site, Twitter, and financial services company, Square, Mr Jack Dorsey, says that he plans to spend the next six months of 2020 in Africa.
In a tweet posted recently while at a trip at Addis Ababa Bole International Airport in Ethiopia, Mr Dorsey said that he had finished his tour of countries in West Africa, such as Ghana and Nigeria, as well as South Africa, in which he had a meeting of technology entrepreneurs and publishers, as cited by Cable News Network (CNN).
While Mr Dorsey did not specifically indicate where he is hoping to set up base while in the continent next year, he predicts that cryptocurrency reserves such as bitcoin will tend to have huge impact.
“Sad to be leaving the continent…for now. Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid 2020. Grateful I was able to experience a small part. Sad to be leaving the continent…for now. Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid 2020. Grateful I was able to experience a small part,” he says.
According to Google Trends, in an analysis done last month, bitcoin is the most popular cryptocurrency, in Nigeria and South Africa.
Weetracker further explains that this popularity is due to two factors in both countries: “economic reforms and currency devaluations.”
Nigeria, an oil producing country, has been under pressure to generate more jobs for its people and World Bank last Monday fears that chances are that over 30 million citizens in the country will become more poor.
This is despite Nigeria’s Gross Domestic Growth (GDP) being projected to rise from two percent in 2019, up by 0.1 percent the previous year.
In Nigeria, the financial technology company, Flutterwave, has made it possible for the citizens of the country to have the ability to purchase virtual currencies such as bitcoin and ethereum using the country’s core currency, the Naira, explains Moguldom.
In South Africa, whose currency is the rand, has been a downward trend for the last three years. In an analysis published on The Conversation, the Lecturer of Economics, Ms Fatima Bhoola, opines that it had been caused by the inflationary pressure on food prices and high costs of importation of consumer goods.
Would the South African Federal Reserve Bank (Sarb), as a regulator not be able to instill measures to reverse such a trend? Actually, such an attempt to influence the value of the rand is part of the problem, explains Ms Bhoola.
The double-edged part of this problem is that South Africans are turning to cryptocurrencies. This allure has caught the attention of Sarb as they noted the impact that cryptocurrencies might have on currency controls, such as the current one on the maximum amount can be sent outside South Africa by individuals and corporates alike, that is between one and ten million rand.
Towards this end, IoL reports, is that in the first quarter of 2020, Sarb plans to put the currency control restrictions in place as the virtual currency market in the country is currently unregulated.
This announcement has elicited a negative reaction, with local banks in South Africa, such as FNB, banning companies that do transact in the virtual currency, reports.
It is such perked interest in cryptocurrency in Africa that has the CEO of Twitter, Mr Dorsey, whose company is estimated to have a market capitalization of $ 23.6 billion, according to the Washington Post, to predict that virtual currencies will have an even bigger impact in the continent in the future.
Mr Dorsey’s announcement had analysts wondering what would happen to management of both his companies, Twitter and Square. CNBC, for instance, had an analyst from MoffetNathanson, Ms Lisa Ellis, explain that Africa has a market for financial technology (fintech) payment services, which are largely undertapped.
In countries like the Netherlands and China, the fintech savvy population has already tapped into payment services such as Ideal and Alipay, respectively.
Already, Twitter’s social media counterpart, Facebook, has announced its own virtual currency, Libra, meant for the global market, including Africa, though it is yet to be given regulatory consent by authorities from the United States of America (USA).