The Central African Republic has one of the lowest GDPs in the world and less than 1% of its inhabitants have access to financial services providers such as banks. On July 3, 2022, the country’s president launched massive plans to change this with the help of blockchain technology. A project that I also had the opportunity to work on and which could set a precedent for many emerging economies.

 

It’s expensive to be poor

When using blockchain in countries with less economic clout, you Accounting Directors Email Lists quickly think of the introduction of Bitcoin as legal tender in El Salvador. An experiment that I look at with great interest and find partly positive. Just under a quarter of the national GDP (gross domestic product) is earned in neighboring countries and sent back to the family in El Salvador by the workers. The high transaction costs charged by parties such as Western Union are $400 million annually . Money that the inhabitants of the poverty-stricken country can use very well. As the Economist recently nicely wrote: “ It’s expensive to be poor ”.

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Blockchain provides a digital infrastructure

The most important infrastructure needed for an emerging economy to really take off? Research by parties such as McKinsey , the Bill & Melinda Gates Foundation and the IMF put the financial infrastructure at number 1. The possibility of having a bank account to save and pay, take out insurance and loans. This is not yet common practice for more than 2 billion people worldwide, especially in countries with little economic strength. Often these people are not accepted as customers of a bank or the financial products are simply not available.

For me, the greatest impact of blockchain is not the price of cryptocurrencies, but the digital infrastructure it offers to build emerging economies in different areas. From finance to identity, from tourism to investments. It is not surprising that the Central African Republic (CAR) is now taking such big steps. President Faustin-Archange Touadéra has a PhD in cryptography .

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