For many Gambians, the terms cryptocurrency, bitcoin or blockchain are rocket science fields or completely alien financial terms to them. This is not only peculiar to a third world country like the Gambia, but as well as over a dozen of others on the African continent. And, in a country where the financial market is underdeveloped, with limited financial products as well as with a conventional banking penetration rate of approximately 25% for urban population and 5% for the rural areas, according to the United Nations Development Programme (UNDP), the concept of embracing cryptocurrency could be a raw dream.
However, a Gambian cryptocurrency enthusiast and banker with seven years’ experience Mr. Malick Bah, opined Gambians should fine tune with the realities of times and accept disruptive technologies such as the new crypto financial sector that is spreading in Africa like wild fire.
The Banjul-born banker, who relocated to Nigeria as Treasury Specialist in one of the international banks, noted that cryptocurrency is digital money created post-2008 global financial crisis, and stressed it’s real money as one can use it as a “medium of exchange, a store of value and a measure of wealth”.
The Gambia being a largely cash economy coupled with low digital literacy rates, many are skeptical whether such a financial system could strive well in this country as they argue on the safety and reliability of this latest financial tool which is not formally controlled by any given state or authority, but rather a lose decentralized system.
But as Bah explained, cryptocurrency could be converted to cash (fiat) for instance from bitcoin to dalasi and vice versa, adding that cryptocurrency is money, and bitcoin is the first cryptocurrency created by an anonymous person called Satoshi Nakamoto; while blockchain is a decentralized technology that facilitates/records crypto transactions.
Meanwhile, the International Monetary Fund (IMF) in December 2021 raised its concerns against the digital money, saying consumers are at risks as it cited that there is simply ‘inadequate disclosure and oversight’ in this space. It believes that crypto assets create some ‘data gaps’ and can open unwanted doors for money laundering as well as terrorism financing.
Apart from IMF, many people are raising concerns over the safety and reliability of crypto, but enthusiasts and bankers like Bah, are of the view that cryptocurrency usage has its merits and demerits just like using fiats like Dalasi, Euros, and US Dollars.
“We have over 18,000 coins (cryptocurrencies) in existence. And the most notable is Bitcoin and anyone with internet access can have access to these global currencies (cryptocurrencies),” Bah maintained.
The BSc in Economics holder, from the University of The Gambia (UTG), highlighted that crypto could be used as a medium of exchange, meaning one could use crypto same as they use fiats. According to CoinDesk, Ukraine has already received $100m crypto donations in the war with Russia.
For the Gambian crypto advocate, in terms of investment potentials, the Gambia has low secured investment opportunities that yields decent returns. He noted that cryptocurrencies (most notably Bitcoin) had made many people millionaires within a decade.
“People around the world trade Bitcoin like they trade stocks. Price of Bitcoin in 2009 was $0.06 and today, price of that same Bitcoin is $41,000,” argued Bah.
CoinMarketCap indicates that the crypto industry is a $1.5 trillion market. He explains that this system would promote financial inclusion and employment opportunities; and that cryptocurrencies can give rise to financial technology companies (Fintechs) and create jobs for the youth. But he equally sounded the alarm bell, hinting that the crypto technology is decentralized and not controlled by a single authority that owns or regulates it, thus creates a space for scammers to exploit newbies in this market. That since the crypto world is unregulated and decentralized, it is open to money laundering, and (with) price volatility of some cryptocurrencies/assets, “people can lose monies same way they gain high returns globally”.
Asked where is the Gambia in this cryptocurrency market? Bah answered that crypto data in the Gambia is very low, and the crypto market in the Gambia is currently via P2P (Person-to-Person). “There is no Fintech in the Gambia that offers crypto services at the moment, however, some few people are learning the technology and exploring opportunities,” he claimed.
Bah further observed that money is evolving and people see mass adoption of the cryptocurrencies globally, arguing cryptocurrency, like money, creates opportunities especially for retail investors. The crypto space is disrupting the global financial system and creating equal opportunities for people to invest and grow wealth. “Gambians should not be last in this digital era,” he posited. He added that anyone could buy cryptocurrencies via an exchange point like binance, coin-base). “One needs to understand it first before going into it,” Bah advised.
According to Forbes, Africa has the highest adoption rate (1200% in 2021) of cryptocurrencies globally, despite some countries like Nigeria banning crypto; people still explore the opportunities in crypto to hedge against local currency (fiat) devaluations. Some use it to send and receive remittances, especially when sourcing FX is difficult in a restricted currency.
Meanwhile, he forecasts that blockchain, for example, could help African countries settle land ownership disputes as Non-Fungible Tokens ( NFTs) can be used to record land ownership saying crypto give rise to Fintechs, thus promoting financial inclusion and growth.
The Gambian banker advises Gambians to remain open-minded to this disruptive technology and learn to embrace it. Hear him again: “We’ve seen the President of the United States issued an executive order to regulate the crypto space (not to ban it, and other major countries, including Nigeria and China launched Central Bank Digital Currencies (CBDC). The U.S is also looking to launch a CBDC to compete in the crypto space.”
Bah finally noted that Covid-19 has disrupted the tourism industry in the Gambia, and crypto could help artists in the tourism and music industries sell their products beyond.
