Many of the people investing in Bitcoin are not simply using it as a means of speculation, but as an alternative to more traditional, and in some cases, less stable and accessible currencies. According to a recent report by Bloomberg, around a third of customers at ‘La Maison du Bitcoin’ in Paris are using the cryptocurrency to transfer much-needed funds to their families in Africa. This is due in part to political and economic instability, but also to the ease of access that the cryptocurrency provides:
Manuel Valente, cashier, explains: “In many countries in Africa, there are more cellphones than bank accounts.”
Bitcoin only requires a mobile phone to be transferred, so it is more accessible for many people in African countries than a traditional bank transfer.
One such country is Zimbabwe. Following this week’s military takeover in the unstable nation, the price of Bitcoin jumped to double the international rate as residents scrambled to invest to avoid the inevitable inflation rate of one of the native currencies such as the South African Rand. Zimbabwe doesn’t have its own official currency – it abandoned the native Zimbabwean dollar after hyperinflation caused it to collapse in 2009, the same year that Bitcoin was launched. Venezuela, another country where Bitcoin is becoming increasingly popular has an accumulated inflation rate of a staggering 825%.
One thing which may prohibit the growth of the Bitcoin in emerging markets like this is the lack of facilities to physically pay for goods and services directly with the currency. Enterprising individuals are setting up licensed change points similar to ‘La Maison du Bitcoin’ which will convert Bitcoin into locally accepted currency and it is surely only a matter of time before local merchants begin to accept Bitcoin directly.