Dr Abderrahmane Mebtoul, University Professor, international expert, chartered accountant at the Higher Institute of Management in Lille (France) 1974.
“Cryptocurrencies” are virtual digital assets based on blockchain technology through a decentralized ledger and encrypted computer protocol. A crypto asset is not a currency, its value determined solely by supply and demand, not relying on a trusted entity like a central bank.
1.- In 1976, Austrian Friedrich von Hayek, Nobel Prize in Economics, predicted in his work the denationalization of currency, an alternative economy where the State loses the monopoly of monetary issuance, an idea taken up in the 1990s by cyberpunks and it was only in 2009 that the first cryptocurrency, Bitcoin, was born, a product of distrust in the system caused by the American subprime crisis. From that date, decentralized finance continues to grow and its dematerialized, decentralized, traceable, and tamper-proof means of payment tend to attract more interest after going through the Covid-19 health crisis. Recently, the digital world has seen a rapid development of blockchain, made possible thanks to virtual currency like Bitcoin, its most well-known application. The report entitled “Time for Trust: The Trillion-dollar reason to rethink blockchain”, published in October 2020 by PricewaterhouseCoopers (PwC), the British firm specializing in auditing and accounting, estimates that blockchain technology could bring in $1.76 trillion to the global economy by 2030, and the Commission on Science and Technology for Development, a subsidiary body of the UN Economic and Social Council, in its report of March 4, 2021 entitled “Leveraging blockchain for sustainable development: perspectives and challenges”, highlighted the possible impacts of blockchain technology in achieving sustainable development goals.
2.- Cryptocurrency could impact sectors such as banks, insurance, real estate, health, energy, transportation, politics and online voting, virtual identity, logistics (supply chain), social networking, cloud storage, industrial patents, certification of diplomas, electronic signature, identification of connected objects, intellectual property, fair trade, and online voting, which would be a technology for security combining inviolability and inalienability while allowing flawless traceability and transparency without any intermediary. But can the use of this virtual currency be applied without risks in destabilized economies like the majority of African countries, dominated by the informal sector both in the real and financial spheres, often with discrepancies between the official currency and that of the parallel market exceeding 100%, where the e-commerce sector, for example, can only exploit these currencies if there is a real digital/electronic economy? Furthermore, the use of this virtual currency implies a high level of qualification for the individuals in charge of financial operations, adapting to the fourth global economic revolution, the cornerstone of both internal and international exchanges, with blockchain technology contributing to an attempt to redefine the notion of trust through its intrinsic ability to manage transactions innovatively, directly peer-to-peer, without intermediaries, on a consensual and secure basis.
3.- However, BTC is known for its volatility, its use in potentially dishonest transactions, and the exorbitant electricity consumption required for its mining, being considered a safe haven in case of economic difficulties in developing countries, where the fiat currency is weak and unstable, both as an investment and as a safe haven. To ensure compliance with this restriction by their citizens, some countries have put in place heavy sanctions against anyone conducting transactions in virtual currencies due to its significant fluctuations in value, with impressive increases but also huge decreases. Another reason, the ban on Bitcoin and, more generally, cryptocurrencies could effectively combat tax evasion, drug trafficking, and money laundering, made possible by the lack of traceability of virtual currency where the use of bitcoins and other virtual currencies creates a parallel monetary market that harms the official market, penalizing the entire financial system. This explains why many African states prohibit the use of bitcoin and any other cryptocurrency without removing the technological barriers that still hinder its widespread adoption such as standardization, interoperability, processing speed, scalability, as well as legal and regulatory uncertainties (the probative force of information from the blockchain, applicable law and jurisdiction in case of dispute).
