In recent times, digital currencies like bitcoin have been disrupting traditional means of banking and transacting.
Digital currency refers to Internet-based forms of currencies or medium of exchange which are distinct from physical currencies.
The world is becoming less suspicious of digital currency and as such, the rate of adoption of these currencies keep on climbing.
Africa which has mostly joined the bandwagon of digital currencies held by decentralized organizations will be getting a digital currency from issued within its borders in 2017.
Senegal is set to roll out a digital currency that should be used in most of the Francophone West Africa countries like Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Lusophone Guinea-Bissau.
The digital currency is known as the eCFA and is designed to operate alongside the CFA, the West African Franc. It will be issued by the regional bank Banque Régionale de Marché for use by countries in the West African Economic and Monetary Union.
Senegal’s eCFA will be produced with technology created by eCurrency Mint Limited and will be designed to work with existing mobile money platforms like MPesa. The company behind the technology, eCurrency Mint Limited, helps central banks to create their own digital fiat currency, designed to be circulated alongside paper money as legal tender.
Jonathan Dharmapalan, founder and CEO eCurrency Mint says that the digital currency will have security features like that of paper money, which include a water mark, serial number and governor’s signature. According to him in an address to the Alliance for Financial Inclusion Global Policy Forum in the Mozambican capital Maputo back in 2015;
“By layering these together and binding them into a single instrument you have essentially created a central bank-issued digital currency,”
Tunisia was the first African nation to use blockchain technology to digitize its currency. The country launched their eDinar early in 2016. By adopting an eCurrency, Senegal is moving past scrutinizing the disruptive technology of cryptocurrencies to taking advantage of some of the benefits they present.
As Senegal’s Central Bank takes on the role of issuing e-currency, they maintain their role as sole issue of national currency and therefore stem the disruption inherent in decentralized cryptocurrencies like bitcoin before they even have a chance to take root in Africa.