Saved As Bitcoin, Spent as Fiat Currency: Are Africans Now Saving In Cryptocurrencies?

Natalie (Flickr)

“If I have money I don’t need presently, I’ll definitely change it to cryptocurrency and let it gain in value.”  This is what Mr Adeyemo Sunday had to say when asked him if he would save his fiat currency in the bank or instead, as a cryptocurrency. 

Switching from his bank app to his crypto wallet, he pointed out one by one, reasons why he thought cryptocurrency was brilliant for long term saving. From remittance fees to several bank charges, one could understand why he preferred to save in his cryptocurrency wallet.

Money has come a long way from the days of bartering to commodity money, and to fiat. Money doesn’t possess any value in itself, it only has value because people know it will be accepted as a form of payment. Money evolved because economic activities became heavy. Trade by barter could not sustain the amount of economic activities that were taking place across the world. 

Commodity money came and it still wasn’t enough. By the time Marco Polo traveled the silk road in A.D. 1271 and was trading in with paper currency, one could tell the fiat currency was the ultimate means of exchange and savings. Or, is it?

Although fiat currencies are efficient for spending, they may not be as efficient for savings. Leke Abiodun,  a Bitcoin enthusiast says “If it’s not in my crypto wallet, then, it’s buying me stuff.”

READ ALSO: The Best Bitcoin Books For Beginners

In the climes we are currently in, saving is more important than spending. According to crypto-trader, Adams Ola, “With the rate of consistent devaluation of foreign exchange, I believe smart investors and indeed, wise millennials  would adopt/hedge their investment in an asset class that defies the economics of state owned currency…”

It is a fiat-booby-trap.” Kunsha Javed believes the fiat currency was designed to keep us in debt. He says it will keep leaking out of our hands like water. “Any wise person will tell you saving money helps in life, but that is old and boring. Also, it never happens.”, Javed told 

It doesn’t just leak out of hands, in some cases, it vanishes into thin air. Kunsha’s metaphor is quite accurate, but water isn’t the only element fiat currency can be likened to. It vanishes into thin air, and in some cases, burns out like fire. 

Rainy Days’ Savings Ironically Drenched in Rain

In Ghana, it rained on the savings of 70,000 thousand people. $1.6 billion was drenched in the rheums of the fiat currency. In a bid to clean up the banking system, the Ghanian government left many in financial ruin. A high level of financial crime needed to be curbed, but innocent investors were caught in the crosshairs.  “The government needs to step in to build confidence again,” the words of Lord Mensah, a finance lecturer. But does the financial system need a makeover or a complete overhaul?

Like Adeyemo and Abiodun, a number of people are beginning to change how they save. The traditional safes in which they keep funds seem to occasionally metamorphose into a ravenous fiat eating beast. 

Numbers don’t lie. The number of people who would save as cryptocurrencies outweigh those who would save as good old fiat. According to 73% of Argentines prefer the cryptocurrency saving method. Of the 1,113 people who participated in the survey 69.5% had invested in cryptocurrency at some point. 

An evolution is imminent. Could fiat, the ultimate form of money be gradually going through an evolution? 

The trend in far-away Argentina isn’t so different here in Africa. The current economic situation has also increased cryptocurrency activities in Africa. Cryptocurrency transfers have risen by 56% this year. Last year alone, $8 billion worth of crypto was received in the continent. The main reason for this hike are remittances and fiat currency devaluation.

Daniel Whyte isn’t a cryptocurrency enthusiast or trader. He has never had anything to do with blockchain technology, but he has heard of it. 

“If you had enough money to spare, would you save it as cryptocurrency”? asked Whyte. 

” I would consider it… I believe the world is going there now, but I don’t have a full picture.”, he replied. Although Whyte admits that he could join the crypto movement, he further emphasises that he would only do so after much consultation. His desire for a surety is only logical, as not all tales of the “new money” leave a juicy taste in the mouth. There is certainly room for doubt.

Ola Jegede gives a more practical picture of the difference between fiat saving and crypto saving. “If I bury $100 in the ground for 2 years by the time I dig it up I won’t be able to afford what was $100 two years ago. If I do the same with Bitcoin….more value.” He says.

With Stablecoins, Cryptocurrency Volatility is Minimised

Fiat currencies aren’t as volatile as cryptocurrencies. Their values change from time to time but the changes are not as severe as with cryptocurrencies. So why put your money in something so unpredictable?

Samuel Attah, blockchain enthusiast and writer, has a way round the volatility of these cryptocurrencies. “Stable coins.“, he says, though still a cryptocurrency, these coins are pegged to something else like the US dollars, for example. So while an African currency depletes, saving it as a stable coin pegged to a stronger currency retains and increases its value while it remains stable.

Money only holds value because people let it hold value. It is quite evident that a lot of value is being attached to cryptocurrencies. Next money or not, the current financial system is becoming inefficient and a change is imminent.

Crypto or Fiat: What’s your preferred method of saving your money?

Let us know your thoughts on this using either of the comments box.

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  1. I think the point made by Mr Samuel Attah should be looked into….yes we all think crypto currency is the only way we can save our money and earn as the value increases but then it’s only favorable to the foreign currency [USD]….As this currency increases in value so does our local currency [NGN] losses it’s value so I will say; as much as we invest in crypto we should not neglect our local currency also

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