Could Bitcoin Ease The Pain Of Africa’s Migrant Workforce?
ВВС: Bitcoin might conjour up visions of dark doings on the Silk Road website and wildly fluctuating value for some – but could it provide a safe haven for the money sent home to loved ones by Africa’s diaspora? Over 30 million Africans live in the diaspora. They sent almost $40bn (£26.5bn) home in 2014, a figure that is likely to grow significantly in the coming years.
While north African countries such as Morocco, Algeria and Egypt receive the most, east African countries are particularly dependent on remittances.
The average per migrant is almost $1,200, representing 5% of GDP on a country-by-country average.
Yet the cost of sending this money is high.
The Overseas Development Institute (ODI) reports Africans in the diaspora pay an average of 12.3% to money transmitters to send $200 home, while the cost of sending money between African countries is also high. Each year, the ODI says total fees amount to $1.4bn.
Part of the reason for these high costs could be a lack of competition; Western Union and MoneyGram control 50% or more of the remittance market in most Sub-Saharan African countries. But help may be at hand from an unlikely source: digital currency Bitcoin.