Africa is large, young and dynamic. What happens when a country like Ethiopia puts Bitcoin to the ultimate stress test?
I. Little Brother Bitcoin
Ethiopia, like most countries, is bound to have a Central Bank Digital Currency (CBDC), in the flavor of a U.S. dollar backed Ethiopian birr. This new CBDC will allow the State to continue printing currency in the digital age.
As reasoned by Alex Gladstein in Cato Journal’s recent essay, “Financial Freedom and Privacy in the Post-Cash World”, “Society is currently undergoing a historic shift away from paper‐based, bearer asset daily money toward completely electronic, corporate ledger daily money. This change is part of a long trend of disuse of all bearer instruments, like stock certificates and bearer bonds.”
This strategic removal of cash (and some might argue privacy) from the economy will allow the State to go on spending, which will add to the inflation and debt cycle via its new digital currency. Some actors, including bureaucrats and self-serving organizations, will enjoy this increased State spending. Viewed from the perspective that petroleum production backs the USD, it’s fair to conclude that many of the actors in this inflationary-debt bubble have been acting in bad faith. More toxically, it may be commented that these “fiduciary” leaders of money and policy are intellectually dishonest and morally bankrupt. Henry Kissinger, for example, might add that “It is not a matter of what is true that counts, but a matter of what is perceived to be true.” And any honest dissenters to this hegemony, with the late Jamal Khashoggi coming to mind, are often met with a deadly response.
Ethio Telecom (the State-owned monopoly provider) introducing TeleBirr is a decades-late step in the right direction toward digital money. Integration and application building, as well as hardware and infrastructure challenges still remain, but new capital will allow for a larger customer base. At present, only