A Nigeria-based research and development economist, Gospel
Obele, has called “for a unified regulatory mechanism for cryptocurrency
trading.” He adds that such regulation of cryptocurrencies can
potentially “complement an African digital currency,” hence this needs
to be considered.
Cryptocurrencies Show the Way
In remarks
published by Joy Online, Obele insists that cryptocurrencies have
already shown how a single currency must function. The economist
explained:
Crypto has been able to build a level of singular markets
when it comes to digital currency use and trade across borders, and
this is a significant philosophy which the [African Continental Free
Trade Area] originates. One of the significant issues that the AFCTA
presents is an important opportunity for a singular currency in the
African Market. We all know because of the different development stages
of financial markets in respective member states.
Obele, however, concedes that the adoption of a single digital
currency by all African states seems impossible in the short term and
may prove to be “very much demanding over time.” Yet, according to him,
it is only such a digital currency that provides a “reasonable
alternative to reaching that level of synchronization to facilitate
trade activity across borders.”
Crypto Here to Stay
As some African central banks contemplate launching their own digital
currencies, privately issued cryptocurrencies are already being used as
a medium of exchange in some cross-border trades. For instance, in
Nigeria, where there is a shortage of foreign exchange, cryptocurrencies
like bitcoin are being used as an alternative means of payment. This
has helped some import businesses to stay afloat.
However, the growing use of cryptocurrencies when making cross-border
payments has seen some central banks impose measures that hinder this
practice. Commenting on this, Obele reminded central banks that
“cryptocurrency has come to stay.” Therefore, instead of restricting the
use of such digital currencies, the economist wants central banks to
understand the technology that underpins such digital currencies — the
blockchain. He explained:
“So we need to go back to the fundamentals to get things right to be part of the crypto revolution.”
