Over centuries the way that the world deals with money and trading has changed many times over. The system that we’re most familiar with in today’s world would be the one known as fiat currency which is regulated by the banks that rule the world.

We all know how it works. Whether it’s a bank account, credit card or debt facility, the use of the system is fairly standardised all over. Anyone who needs to interact or function in the fiat system will just need to go to their nearest bank and arrange the necessary facilities.

The system seems to work well in most of the world, although consumers may be boiling over to give a few recommendations about the customer service of certain banks… But that’s expected with any service delivery industry and isn’t the focus of this article.

First world countries and main metropolitan areas of most third world countries are more than familiar with being part of the system and are of the opinion that the system suffices in regulating how we trade goods and services in our everyday lives.

But what happens with countries where there isn’t the presence of a regulatory bank or the necessary infrastructure to support the functioning of a regulatory bank? Herein lies the problem with Africa…

Economists all over the world will agree that trying to successfully implement the fiat money system in a third world African country becomes increasingly difficult for regulatory authorities. There are so many factors that influence the effort or even the decision to try and make facilities available to people in these countries.

Rampant poverty and horrendous growth and inflation rates are strong factors in making the case for cryptocurrency in African countries. Cryptocurrency may be able to provide African customers the ability to safely store value and ultimately be a medium to safely mitigate inflation.

Bill Gates makes a very interesting point: “Banks are not necessary but the banking function is”. Giving a few moments of thought to this point will make a person see that the exchange of wealth is a non-negotiable function in society, whereas the bodies that regulate it may take any form. The main point is about providing the service to individuals in order for them to work towards their own financial freedom.

In the traditional model of banking, all regulations and authority are held by the banks that provide the system. In contrast, the cryptocurrency model works on blockchain technology which allows the network to independently confirm transactions by the registered cryptographers. This is incredibly appealing to African countries as many believe that the corruption of African politics is the main contributor to the lack of funds.

The main issue with any system designed with specific human intervention roles in the process is that it can always be overridden. Blockchain technology allows secure confirmation of transactions by arbitrarily selecting users on the network. This could be a major help in assisting to protect consumer’s wealth.

The cryptocurrency broker network is still largely underdeveloped in Africa. There are a few platforms that have been started and are slowly growing in popularity. Countries in Africa are starting to realise that cryptocurrency may be the answer to them catching up with the rest of the world and possibly skip the incredible struggle of trying to implement the traditional banking infrastructure.

To date, there are more than ten registered cryptocurrency exchanges in Africa who are providing efficient and cheap services to consumers. It’s important to note that the biggest challenges with implementing cryptocurrency systems that have been noted by government has to do with user acceptance and training.

It’s hard to ignore that the education level in African countries leaves much to be desired despite the fact that there are many philanthropic organisations that are trying to aid governments with providing education to its citizens. Consequently, there is a direct lag in technological training which will have a further impact on rolling out new systems and the training that comes with it.

Given cryptocurrency’s freedom from needing the layers and layers of corporate structures for governance, it may be a solution that will be welcomed with open arms. The gaping hole in African banking infrastructure makes cryptocurrency an obvious solution.

There is of course a deeper benefit than simply improving a banking system. As previously mentioned, African countries are indeed blighted by the corruption of their governments. An independent, objectively managed wealth network will ensure that consumers are in control of their own wealth and could bring amazing outcomes to the wellbeing of economies.

The benefits continue further than just the citizens within a country. There are also benefits for travellers and refugees. The challenges faced by foreigners in countries which are not their own are almost always due to financial reasons or not being able to access finances from their home country. A cryptocurrency network will enable foreigners to not only have access to their wealth but also use it in emergencies.

The prospect of a financially free population is indeed overwhelming for governments to come to terms with as it brings into question the true scope of government’s function in society but it may spark the discussion that could steer countries to greener pastures.