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Idris Elba Promotes Cryptocurrency in West Africa
BOSTON, Mass. – Golden Globe-winning movie star Idris Elba is taking a leading role in promoting financial freedom in his ancestral home of West Africa. He has collaborated with Stellar Development Foundation, a non-profit organization dedicated to creating equitable access to the global financial system through blockchain technology. Together, Elba and the Stellar Development Foundation have assembled a strategic team with the goal of integrating millions of West Africans, who currently lack personal financial tools, into the global economy. Their main strategy is to promote and expand cryptocurrency exchange to achieve financial freedom in West Africa.
The banking challenge in West Africa
Less than half of adults in West Africa have access to banking services. Even in Nigeria and Ghana, the region’s two largest economic powers, less than half the population has formal bank accounts. In other sub-Saharan African countries, such as South Africa, citizens often avoid traditional financial services due to mistrust in banks’ motives, ATM fraud, and oppressive bureaucracy within financial institutions. Many see cryptocurrency, powered by blockchain technology, as a solution to counter these ongoing problems.
Cryptocurrency acts as a hedge against currency manipulation, which many developing country governments are committed to promoting international trade efforts or reducing debt interest burdens. Such practices, which involve a deliberate devaluation of the currency, are morally wrong because they reduce the purchasing power of ordinary working-class citizens by increasing inflation. Cryptocurrencies also help curb monetary inflation.
The majority unbanked
Many of the world’s poor, equal to 75%, lack bank accounts, highlighting the challenge of creating wealth without savings or reserves. People in developing countries point out that long distances to banks and high fees associated with account opening, maintenance, transaction costs and minimal balance penalties make traditional personal finance inaccessible. Historically, not having a bank account also meant not having access to credit, as credit card payments typically require withdrawals from a checking or savings account.
Accessibility to transport and banks
Transportation in Africa represents a significant challenge, given that the continent has the capacity to do so higher transportation costs in the world. These high costs make it particularly difficult for West Africans to access banks, making the task almost impractical. Additionally, West Africa has only 7.8 ATMs per 100,000 residents, which is the second-lowest rate on the continent, just above East Africa.
THE African Development Bank Group (AfDB) states: “To open a savings account at Ecobank, one of the largest pan-African banks in Africa, an individual must meet the following requirements: complete account opening form, a valid identity document of each signatory ( current driver’s license, ID card, international passport, student ID card for students or registered association), proof of address (bills from the previous three months, site visit, certificate of residence, rental agreement), two photos card among others. While such requirements may be routine, the majority of the population in low-income countries may not meet more than one.” The fact that only 13.7% of West Africans have access to financial institutions reflects these problems.
The role of cryptocurrency
Coinbase and Exodus Wallet, two of the largest digital cryptocurrency wallets, do not charge account opening fees or minimum balances. Exodus charges fees for selling or trading digital assets on its app. Both of these apps, along with many others, are available for free download on the iOS App Store and Google Play Store. Online desktop versions are also available.
To open accounts on these platforms, consumers need only one valid ID, which is much easier than the multiple forms required by many traditional banks in Africa. With 60% of West Africans having access to the internet and only 13.7% have a bank account, cryptocurrency could significantly close the financial accessibility gap in West Africa from a market penetration perspective. It allows for large-scale financial coverage from the comfort of your home, eliminating the need to travel to physical banks.
Contrary to the opinions of cryptocurrency detractors, cryptocurrency can serve as an independent alternative to traditional banking because individuals can purchase cryptocurrencies without needing a credit card or bank account. Local shops in villages can easily act as intermediary sellers of various cryptocurrencies, allowing customers to do so buy crypto coins directly with cash.
Impact on international trade
American trade relationships with many West African nations have indeed injected money into their economies through investment, but they also come with their share of negative effects. The strength of the US dollar, the world reserve currency, Often hinders emerging markets limiting the growth potential of local currencies. If organizations like the Organization of African Trade Unity banded together to use a default cryptocurrency for transcontinental trade, it could weaken foreign currencies and revive the African economy.
The vision of Idris Elba
In 2023 interview with CoinDesk, Idris Elba drew a relevant comparison between his field of video production and his newfound interest in promoting financial freedom in West Africa. He recounted how growing up he only had four TV channels to choose from, but now there are countless options available via cable, Internet and subscription streaming platforms. This expansion has allowed directors, screenwriters and actors to choose from a wide range of mediums to showcase their creative work.
Pending
Looking ahead, the expansion of cryptocurrency in West Africa holds enormous promise for bridging the financial gap for millions of people. By simplifying banking processes and making financial services more accessible, Idris Elba and the Stellar Development Foundation are laying the foundation for a new era of economic empowerment. As these technologies gain traction, they could fundamentally transform the financial landscape, promoting greater inclusiveness and prosperity across the region.
– Daniel Osmani
Danial is based in Boston, MA, USA and focuses on business and celebrity for The Borgen Project.
Photo: Flickr