History has it that before money was invented, trade by barter has always been a medium of exchange. The Mesopotamian people invented shekel 5000 years ago which was considered the first known form of currency. In Africa, we have used cowries, we have used stones, gold, and then coins followed by paper bills with value denominations to represent money. The money then over time became a way to distinguish between people and places based on the currency they hold and spend. This development made the continent of Africa grow further apart as competitors rather than allies.
Today, on the lips of most people are statements like digital currency, virtual currencies, cryptocurrency, bitcoin and so on; the next evolution in the fintech space. Today, most countries and governments are deciding on building their own digital currency, otherwise called the Central Bank Digital Currency. Many debates have been taken about whether these new initiatives by the banks are the same as the popularly used and known cryptocurrency. It is best to summarize it as a regulated version of cryptocurrency with some degree of government controls and of course, pegged to a local currency value.
Most focus and interests in designing these CBDCs have primarily been centered on security, transaction speed and a few other things, but not much on what more it could do to liberate and provide more opportunities for the citizens. A few wise men and leaders once dreamed about a unified currency for Africa, measured in unique gold metal, though this was ages ago. A few flaws existed in this which were totally mitigated, today’s technology has made it more than possible as it has been successfully done for over a decade with Bitcoin.
CBDCs of course are striving to achieve more by design, inventing a currency that still obeys the old financial rules while blending the new possibilities offered by technology such as programable and transparent transactions. Most countries see this as an attempt to boost the liquidity, utility, and value of the local currency as well as the economy.
However, lack of adequate regulations and understanding of the terrain has limited the possibilities and extent of CBDCs because of the fear of the unknown. When compared to the achievements of the current trends in the space, a well-regulated CBDC without the innovation-stifling element might be able to achieve more because of the acceptance and increased adoption.
Blockchain technology in recently launched platforms or software was designed to provide interoperability between chains. Transformationally, a few offer Parent-Child chain architecture allowing more security in various chains or in this case, currencies on the same platform. Some other solutions trying to rival or recreate this solution uses an already established system to offer a banking platform for many currencies as seen on centralized exchanges and custodial wallets. But with this, a lot could go wrong which can be averted or countered with a fully decentralized platform.
As an East African traveling across the region, imagine, having a single blockchain wallet fully decentralized, transparent, secured holding various currencies for each country and able to spend, exchange and do much more on a single secured application.
With the capacity of smart contracts and creating decentralized applications, new businesses and jobs will be created. All designed to boost the economy and improve livelihoods. Chain transactions will be monitored around the clock giving the government the ability to protect all interests through an existing KYC from the banks fused into account creations. Countries are united not by currency, but by the platform, a single chain, and connected digital solutions.
As Fintech space continues to evolve, CBDC offers further disruptions, but a better design will not be one that further disintegrates a continent, but one that unites it. Ardor Blockchain a product of Jelurida Swiss, enhanced development from NXT blockchain, the first pure PoS consensus algorithm built-in 2013. Ardor offers a unique Parent-child chain architecture that allows the full design of a deserving CBDC unites East African Communities. See a demo at www.eapesa.com. Jelurida Swiss currently has two African extensions, Jelurida Africa in the Federal Republic of Nigeria and Jelurida Tanzania registered in the United Republic of Tanzania.