By the time the new supply makes its way to the hands of the middle class worker, prices have been adjusted to account for inflation. For example, in the US, those who are the first to receive new dollars (which are usually banks or government) benefit from the fresh supply as they use it in an economy where prices are already still set by the existing supply of money. For those who aren’t familiar with the concept, the Cantillon Effect is observed when new supply of money is printed and circulated in the economy. This is the Cantillon effect on steroids. About 30 or so years ago, ₦5,000 used to get you a new Volkswagen Beetle with a good sum left over.Just gleaning a few thoughts from the article we learn: The article never mentions cryptocurrency or bitcoin, but some of their points sound familiar. One newsletter they sent out was endearingly titled: Why Earning Naira (₦) Sucks. Stears Business is a thoughtful business publication based in Lagos, Nigeria that covers Nigerian finance, economics, and development. That’s why we strongly urge crypto investors and entrepreneurs to look at the opportunities on this continent of 1.2 billion people to start investing in and developing with and for them. And finally, the population is younger and more digitally native than elsewhere, making them a natural fit for the adoption of crypto assets. Second, there’s already a lot of fintech activity in Africa, so much of the financial system already works on digital rails rather than the legacy banking system. Not only are Africans using cryptocurrencies in their intended manner, but the continent also has several other characteristics that make it a prime spot to become the next major hub for crypto development.įirst, numerous economies on the continent are seeing rampant hyperinflation, making cryptocurrencies an attractive option in these countries. Users in Africa are sending and receiving digital assets the way Satoshi envisioned: peer to peer. Unlike the West and Asia where users access cryptocurrencies via exchanges, there is a significant and rapidly growing amount of activity via peer-to-peer trades in Africa. By 2019 Nigeria had risen to the 1st place with South Africa and Ghana also rounding out the top 5. In 2018, the top three countries with the most relative interest searching for Bitcoin were South Africa, Ghana, and Nigeria, respectively. But it’s actually Africa that has shown some of the strongest organic demand for Bitcoin. When you think of crypto development and entrepreneurship, you may think of activity in the US, Europe or Asia.
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