The recent Bitcoin and cryptocurrency market bull run has invited amateur and pro investors in the West to question their portfolio allocations and risk tolerance, while global media outlets have given attention to the upcoming “Era of the Blockchain”. Amidst all the madness, though, very real questions about the underpinnings of economies and societies are being brought to light — what happens when money is completely digital, and who should be the gatekeepers of money when currency can flow as easily as information? What new opportunities await when the unbanked population of the world (2 billion adults worldwide) suddenly have full control and mobility of funds using only a smartphone?

Without rehashing how government-backed fiat currency operates, and how banks control the flow of capital, it is imperative to consider what the future of money will look like when supply is controlled by mathematics and not economic policy. In 2008, the government of Zimbabwe printed so much of its currency that in a single year, a loaf of bread increased from $1 to $100 billion. Couple that with the fact that even in 2014 66% of Sub-Saharan Africans did not have a bank account, it is obvious that there is a large power disparity between institutions and the people who rely on them.

Enter blockchain technology and decentralized digital cryptocurrencies.

Getty Images/Mike Goldwater

By connecting with the network and engaging in an initial transaction, users are able to convert fiat money into the digital currency of their choice, each with strengths and weaknesses for different use cases. All a user needs to begin using a digital currency is a smartphone with basic internet connection, and they can instantly begin enjoying the benefits of indiscriminate and low cost money exchange or commerce. Interesting to note is that African mobile connections have been growing quickly every year, with more than half a billion smartphone users across the continent today.

Africa is experiencing a digital and connectivity revolution at the same time as cryptocurrencies make a strong case for avoiding banks altogether — could the continent provide a best-use case for incorporating a digital payments infrastructure in emerging economies? For context, in 2017, 51% of Americans prefer to shop online, and 80% have made an online purchase in the past month. In Africa, “50% of the continent [is] expected to have access to the internet by 2025, and online shopping could account for 10% of retail sales, or $75 billion,” according to Quartz Africa [McKinsey]. If users decide to incorporate cryptocurrencies into this growing sector, the direction of growth could very well be dictated more by people and be less influenced by the permission of banks or private sector payment processors.

The key here is permission.

Nobody needs to give permission to people to implement these technologies or to access global markets. In countries that have long been subjected to the effects of colonization and are even now being “bought” by outside powers, emerging digital currencies promise more independency of financial decisions. The Internet has removed barriers to communication from the world, and blockchain technology now allows value to transfer just as easily across an entirely trustless network. While banks have not effectively supported the economic growth potential of the world’s 2 billion unbanked, cryptocurrencies have the potential to support independent and widespread growth. Given the speed at which information and value can now travel, and the massive population potentially affected by these developments, it will be interesting to see if a power paradigm shift occurs, and the unbanked in fact drive economic disruption across developing nations.

Written by Colten Nahrebeski (Client Partner) and Dede Tete-Rosenthal (Project Manager) at relativ*