President Uhuru Kenyatta has signed the landmark agreement creating African Continental Free Trade Area, bringing 54 nations under one common market.
The world is currently experiencing ironical situations where the US is constructing a wall to the South while the UK is exiting the European Union as the rest of the world makes efforts to break down borders.
The irony is further emphasised by the fact that these two countries are right at the centre of adopting blockchain, a technology that has the potential to make the world borderless.
Commenting on blockchain entrepreneurs, Richard Branson opines: “If you are lucky enough to have made a lot of money through creating a borderless society and advocating a borderless society, it is highly hypocritical if you then want to build walls.”
That said, Africa is demonstrating a great example of breaking borders through the free trade agreement signed this year. This indicates a growing need for African countries to break borders and trade with each other more than they presently are.
“We will begin to interface with the idea and notion of a single currency, possibly even a digital currency, and it is possible that a digital currency will precede a real single currency,” he said.
COMESA has also laid out plans to apply blockchain technology for its digital free trade area to improve the time it takes for parties to transact and for documents to be processed.
Using Digital Currencies and Smart Contracts to Break Borders
When you think of blockchain technology, digital currencies are not usually far behind. The modern financial systems have further thickened the jurisdictional borders separating nations but digital currencies are slowly changing this status quo.
Recently, Kenya’s blockchain and AI taskforce recommended the creation of a digital currency, a step that could make a huge impact in the country if adopted. However, the idea of a digital currency could even have a greater impact if it was applied to the entire continent instead.
Currently, someone in Kenya cannot buy a product from a Nigerian merchant directly because of the obvious currency barriers. However, with an African digital currency built on the blockchain, the payment possibilities are endless.
For instance, Bitpesa’s blockchain-based platform is using bitcoin to reduce the barriers of sending remittances and making cross-border transfers.
Smart contracts also have the potential to make the world borderless where parties can transfer assets such as land on the blockchain without meeting in person. In this case, digital currencies are used to make payments once both parties fulfil their end of the contract.
NIMC of Nigeria has also proposed an African Identity on the blockchain that would allow Africa citizens to travel across the continent seamlessly with a single identity on the blockchain.
In reality, breaking borders is not an easy task. President Ramaphosa acknowledges that it may take time for Africa to use a single currency but there is promise because “people are now thinking beyond the borders of their own nation.”