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Can Bitcoin Free West Africa From CFA Franc Tyranny?

By Guest Writer on May 20, 2016


The “CFA Franc” is a currency used by 14 African countries, which represents 38% of the African population, and this wicked money affects 150 million lives. France created the CFA Franc in 1945 at the end of World War II for its African colonies. It is literally a copy and paste of the monetary system that Germany imposed on France during its occupation to loot France.

Some of the tools of that financial weapon used by Germany against France have been exploited for more than half a century with the same arsenal on former French African Colonies. For example, even though they are many Franco-African treaties dealing with the CFA Franc, giving the impression than the currency is controlled by the African nations, it is actually not the case.

Africans have no real control over the currency. On the Board of each of the Central Banks of CFA countries, seats are reserved for the French Republic and the voting and decision mechanisms are established so that France can influence the outcomes of the decisions.

The Technology Salon that asked, How Will the Bitcoin Revolution Impact Digital Financial Services?, inspired me to share with you how I think Bitcoin could potentially free West Africa from the tyranny of the CFA Franc.

  • Zero Cost of Coinage
    One key issue is the requirement that the CFA Franc is printed in France and the African countries using the currency have to pay France for the printing services. Yet the Bitcoin payment system is free to use and open for anyone to use it. With Bitcoin technology, anyone can use the currency without requiring approval from any government payment processing services.
  • Flexible Monetary Value
    The value of the CFA Franc is determined by France and has been devalued in 1994 at 50%, one French Franc, previously worth 50 FCFA became 100 FCFA (1). While the value of Bitcoin fluctuates, no one country manipulates it in order to control the economy of another country. Also, if Bitcoin is used as an immediate transfer value, vs. a store of wealth, the long-term exchange rate doesn’t matter.
  • Easier Intra-Africa Trade
    The CFA Franc are emitted by three Central banks, the West African Central Bank (BCEAO), the Central Africa (BEAC) Bank and the Federal Islamic Republic of the Comoros Central Bank (BCC). Even-though they are technically the same Franc, there is no real convertibility between the three zones creating a trading fence between them. Bitcoin value is universal and anybody in the world could purchase goods from anyone without any intermediary.
  • Lower Forex Costs
    The countries using the CFA Franc pay huge commissions disguised in the Operations accounts deposit to France for the convertibility of their currency. Indeed, France is the only country in the world, which guarantees to convert the CFA Franc in Euro (and therefore in most major currencies) and its monopoly creates hefty commissions while doing these operations. Bitcoin can allow money transfer between two remote locations instantly, with very little to no commissions. Bitcoin has the same value worldwide and does not need to be converted to fiat money.
  • No Operations Accounts
    France has established a clearing house which forces the former African Colonies to deposit 50% of their currency with the French Central Bank. Whenever a former colony sells exporting goods on the international market, that country must keep 50% of the sales in what is called the operation accounts. Prior to 1973, all of these countries were depositing 100% of their transactions in these operations accounts. With Bitcoin there is no central bank and this constraint is eliminated.

Still, we need to be honest about Bitcoin’s potential. All crypto-currencies require important technological infrastructure that’s often lacking in West Africa, which means Bitcoin is still inaccessible to most of its population.

That doesn’t mean we need to wait for West Africa to gain financial independence with fiat currency – we can and should share the fantastic possibility of Bitcoin with the population of the region today.

Sewa Agbodjan is a systems analyst from Togo

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2 Comments to “Can Bitcoin Free West Africa From CFA Franc Tyranny?”

  1. Thanks for sharing this, Sewa. One of the most interesting, honest, and timely posts that has been shared through this newsletter in a while! Who needs neo-colonialism when this is outright colonialism in modern times! I learned so much from this and I dare say that Bitcoin could indeed be a disruptor. Or better yet, create a West African version of that concept!

  2. Andry says:

    Bitcoins seems to be the innovative way to go through political dominancy within past colonised governement (visible or not), This is also the only democratic way to freedom. Money should be a tool but not an economical way to get profit over money transactions. Mentality of new african money user should change.