A lot has been written about the potential of bitcoin for emerging economies, with an emphasis on countries in Africa. Here, local currencies have been victims poor fiscal and monetary policies. These countries, also bear the brunt of a deep rooted overdependence on the US dollar. Payment infrastructure to the rest of global economies, weak local currencies and reliance on the US dollar for settling offshore transactions are all inextricably linked.
According to a swift report,
Cross-border payments intra-Africa and between Africa and the rest of the world are skewed towards USD usage and USD clearing via North American banks. Transaction costs remain high at least partly because a large proportion of settlement processes within Africa involve banks outside of Afric
One needs not to look far, Nigeria’s economy is 90% reliant on oil exports and, the US dollar. The Naira, at 345 to the dollar, has taken a nosedive over the past year, along with the decline of commodity and oil prices. Its foreign exchange reserves have not been this low in 11 years.
The Central Bank of Nigeria is in a precarious position,