Facebook and Crypto Currency, prospective sinkhole for Africa’s wealth

E. Ablorh-Odjidja

June 22, 2019

The prevailing view is Africa has wealth.  A lot of this wealth is drained illegally and constantly out of the continent into foreign banks.  

But hold on.  We are about to enter into a new era when illicit financial outflows can be activated with stealth and the receipts switched into foreign bank accounts.

 I don't have enough ideas on how the banking systems of the world work. And very little knowledge about how crypto currencies like Bitcoin are structured.  What I have is a disturbing thought about the prospect of crypto currency’s impact on Africa.

And my apprehension about the prospect is dire and more intense than that of a driver inside a mini car, who sees a huge tractor trailer careening downhill towards him.

This crypto currency is going to make theft of national wealth easy, thereby endangering fortunes on the continent. 

This concern, at first, was only about the modality of Bitcoin, but now here comes Facebook.

For others the threat probability is still moot.  But considering the historic lack of foresight on the part of some of our leaders, the urgency of intervention against a crypto-currency incursion in Africa must be raised.  

The unexamined acceptances of new concepts and ventures in the past, mostly to our detriment, must not continue.

Facebook, a social networking service, is an accepted, successful foreign venture, with an already huge clientele on the continent. 

It has plans to imbed crypto currency on its platform, a giant, which has huge membership base.  Its success to do so can be assured because of its large footprint. 

Therein lies the danger - the prospect for enhancing a money exchange means that has gone one way and so far proven disadvantageous to Africa.

Facebook’s clientele has probably never cared about crypto currency and how it worked.  They just didn't know what it was.  And so did the rest of the world, till the release of Bitcoin, by Satoshi Nakamoto, round about 2008. 

Bitcoin is described as a “new electronic cash system that uses a peer-to-peer network … It’s completely decentralized with no server or central authority… a non-trust-based system, that bypasses central authorities like banks and government for transactions,” says SourceForge.

The ability to bypass "central authorities and governments" must be a red flag.  But would many governments in Africa care?  There are doubts.

Facebook, with its reach, dwarfs all governmental financial institutions in Africa, in terms of population client base, wealth and reach.  Its impact as influencer in this regard is colossal and should, therefore, be worrisome.

The probability is, Facebook's attempt to get into the crypto-currency market would be assured a faster reach and success in Africa than anywhere else in the world. 

Oddly, the attempt, instead of engendering fear, will be welcomed because of the secrecy aspect and the equal opportunity it offers corrupt officials and common criminals to complete currency transactions. 

The convenience for syphoning off monetary wealth from nations, via the crypto-0currency way, will become the most attraction for the corrupt, including most in power.

For those who want to stop corruption in our society, there is the need to watch our banks for openness and accountability.  But the crypto-currency modality will prevent this and will prove to be a huge headache.

With crypto currency, an African country or state's ability to control its wealth becomes vulnerable.  It will be like drilling a hole in a barrel to put a syphoning hose in. 

Yet be certain that some African leaders will be quick to embrace the Facebook crypto currency project for who knows what benefits. 

African currencies, which are already weak, through corruption, can now be rendered relatively useless against crypto currencies like that of Facebook.

Even advanced nations of the world are yet to comprehend fully the dilemma and the liabilities posed by crypto currency and its processes.

A Bitcoin transaction allows the corrupt individual a huge degree of anonymity that can overwhelm his or her government’s ability to detect identity, control or store successfully the nation's own wealth. 

 Banks will be like sieves, with monies in them sipping out to overseas destinations. 

Money laundering, by and for the willing, will be open season as this anonymity protection veil is enabled by the crypto currency system. 

Corrupt leaders, the likes of former President Sani Abacha of Nigeria, can transfer stolen wealth faster and damage sooner a country's financial health through the crypto currency system than the real Abacha did with his numbered bank account depositories at Switzerland. 

Abacha's stolen money was eventually found and some retrieved.  With crypto currency, that possibility of recovery cannot be achieved; at least not that easily.

“I expect that within two years, we’ll be in a place where people can shove their money under the virtual mattress through crypto currency, and they’ll know that wherever they go, that money will be there.” – Sarah Granger, Author, and Speaker wrote.

And “You can‘t hinder someone to use Bitcoin, you can‘t prohibit someone to accept a payment, you can‘t undo a transaction,” said Ameer Rosic of Blockgeeks, in order words the transaction cannot be cancelled or stopped like a written check.

As "noble" a thought as some may think, that crypto-currency is for the free market, they are clearly not thinking of how damaging it might be to the wealth of corrupt developing nations of the world.

With the rapant larceny and lack of accountability for state wealth in Africa today, the interests of many nations will not thrive under a crypto-currency regime. 

Nations in Africa will not win.  Facebook and others like it will win. And corrupt officials will be made happier.  Happier than the numbered bank accounts did for Abacha.

According to Price Waterhouse, “four of the 10 biggest proposed” crypto offerings are using Switzerland as a base. 

Thus, the synonymous nature of the old numbered accounts, which our local plunderers are familiar with and the new crypto currency is being established on the same platform.

Some countries are reacting to what seems to be a potential crypto currency threat.  They either allow it for trading, with some restrictions, or banned it outright.

For instance, Bitcoin has been barred by the Central Bank of China from financial institutions in China since 2014.

Crypto currencies in Russia are legal, but the purchase of goods must be made with the Russian ruble. 

The United States and Canada have placed crypto currency under the North American Securities Administrators Association, to prevent crypto currency scams and in a sense harness somehow its use.

There is absolute ban on trading or crypto currency usage in many North Africa and Middle East countries. 

There are "implicit bans" on the system. Indonesia, Lesotho, Saudi Arabia, Taiwan and others are reacting to the advent of crypto currency in their banking systems like they would to attack on their power grids.

However, many governments are still silent on the subject.  

Hopefully, our so called “honorables” in governments of Africa are not planning to hitch our national wealth to the crypto- currency grid. The danger is stark.  Our economies must not be hitched to ruinous ideas today like we did during colonial times.

To be a critic of crypto currency is not asking to be labeled luddites.  We are just trying to prevent scammers from taking advantage and to encourage the proper storage of national wealth.  

E. Ablorh-Odjidja, Publisher www.ghanadot.com, Washington, DC, June 22, 2019

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