The first central bank to adopt a digital currency
While the details are still being worked out Senegal has adopted a digital currency as it’s new national currency. The new eCFA will operate alongside the existing CFA. This move will be closely watched by countries around the world but if successful the currency will be used in “most of Francophone West Africa Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Lusophone Guinea Bissau”.
With more of the world having access to smartphones and some form of internet access, 3rd world citizens have been using more forms of digital currency than ever before. Will this be the start of a global shift toward the acceptance of digital currencies or will the whole plan blow up? There is no doubt in my mind that their will be growing pains but it comes down to the acceptance by the citizens and safety from attacks on the network in place to handle all the transactions.
Click here to visit the original posting over at Quartz Africa.
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Senegal will soon begin using a digital currency, ushering in the use of blockchain technology by the central bank. It’s another opportunity for financial technology (fintech) to help emerging markets leapfrog traditional banking systems and bring financial inclusion to more people.
If the Senegal roll-out is successful, the currency will be used in most of Francophone West Africa Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Lusophone Guinea Bissau. Known as the eCFA, it is designed to operate alongside the CFA, the West African Franc. The eCFA will be issued by the regional bank Banque Régionale de Marché and will be used by countries in the West African Economic and Monetary Union (link in French), according to a statement.
The eCFA has been designed to work with existing mobile money platforms like MPesa, which have themselves been revolutionary for the millions of unbanked Africans. The e-currency will be produced with technology created by eCurrency Mint Limited, a company that enables central banks to create their own digital fiat currency, designed to be circulated alongside paper money as legal tender.
Just like paper money has a water mark, serial number and governor’s signature, these security features can be translated to a digital currency, explained Jonathan Dharmapalan, founder and CEO eCurrency Mint.
“By layering these together and binding them into a single instrument you have essentially created a central bank-issued digital currency,” Dharmapalan told a room at the Alliance for Financial Inclusion Global Policy Forum in the Mozambican capital Maputo in 2015.
The physical technology behind the currency is a digital currency production engine. In Dharmapalan’s presentation, the engine was a pyramidal structure with a tiny slot at the top. Each central bank will have their own engine, locked in a vault and kept offline. It will only be operational when the central bank wants to use it, he explained.
The advantages represented by the new technology have been tempered by a lack of clarity on how exactly the system will work. Skeptics say it’s unclear what kind of distributed ledger—the foundation of blockchain technology—the new currency will use, which could introduce a host of unforeseen regulatory and distribution issues for the West African regional bank.
Tunisia became the first African nation to use blockchain technology to digitize its currency, launching the eDinar earlier this year. Last year, Ecuador launched the first state-sponsored e-currency in the world.
Central banks around the world have kept an eye on the disruptive technology of cryptocurrencies. On the one hand, they’re excited about the distributed ledger innovation that allows the secure transfer of information, without a third party, according to a 2015 report released by the Bank for International Settlements (PDF), of which more than 60 central banks are members.
Digital currencies, however, are also difficult to regulate, and until now had no links to sovereign currencies. A digital currency issued by central banks allows national treasuries to make use of all the technological advantages of cryptocurrencies, without relinquishing control to decentralized organizations like Bitcoin.
With banks taking charge of issuing e-currency, they maintain their role as sole issue of national currency, disrupting the disruptor before independent blockchain currencies even gained a foothold in Africa.
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affirmative JTL. Next step bail ins…
December 21st I posted that Bitcoin blew through $800 U.S. As of 11:41 Central time,it is $926.85 U.S.
This is crazy, nobody wants digital currency, just another thing being forced on us. I used to run a shop and the fees for even taking card payments plus all the gear you have to buy to process them was unbelievable. Once they get their digital currency watch the fees go up, basically an extra 5% on every transaction
I wonder if anyone recalls the sites favorite person mentioning this?
The person actually there in Africa telling us what was really happening.
So funny, cant have that.
He saw things before most people did.
I always thought it interesting, 1 step ahead of people your smart as heck, 2 steps ahead of people your nuts.
I havnt forgotten his gold/euro discussion.
I am convinced he had it exactly right, thats when ya wanna own gold.
On that note…….
The banks and governments want digital cash, cash is used for what % of transactions now? 10%? 20%?
The melenials have no clue that cash= liberty, heck a huge % of any age bracket has no clue.
Looks to me cash is on its way out, except as they are saying for corner stores etc
Now there is talk of gold being confiscated?
Even if they dont confiscate, should a government frown on it,should it be “civil forfited”often enough, taxed or grabbed at boarders (which I have seen) would people believe its worth the hassle?
Heck, ya cant buy a coffee at a drive thru with an once of gold now.
What will the average person believe the value of gold is?
Will the public herd rush to gold?
Anybody know the new symbol for USAPF? Matthew?? Excelsior??
I would call or email the company or your broker. You shouldn’t have to wait for the NYSE listing in January.
Hi Matt,
I was looking at you gold chart posted on the weekend edition. Still looking to you like it might drop to 1110 area? Love to see any updated. Chart you have on that or GDX/GDXJ. Thanks.
Hi Doc Fan, GDXJ just filled the big 12/15 gap but I think this action is more than just a gap-filling exercise. Even if GDXJ does pullback from here, I don’t think it’s going to go materially lower than the 12/20 low. In fact, I really think that low will hold.
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=1&dy=0&id=p65838891521&a=483142924
GDXJ also looks good when priced in gold (but is at resistance right now):
http://stockcharts.com/h-sc/ui?s=GDXJ%3AGLD&p=D&yr=0&mn=11&dy=0&id=p49151000722&a=490095165
GDXJ hasn’t shown this much strength on the 60 minute chart since mid October. Perhaps we’ll see a quick pullback to the 28.60 area to fill yesterday’s gap. I don’t know and i don’t trade based on such possibilities. I hope you can see a 60 minute chart:
http://stockcharts.com/h-sc/ui?s=GDXJ&p=60&yr=0&mn=3&dy=0&id=p84000664630&a=486690674
Yes, I thought gold would go a little lower, and it still might, but it is certainly not a sure thing. The following chart will update this evening…
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=5&dy=22&id=p10670713934&a=496083091
GLD weekly:
http://stockcharts.com/h-sc/ui?s=GLD&p=W&yr=6&mn=7&dy=0&id=p30074242504&a=403938174
If I owned no gold or wanted more, I wouldn’t hesitate to buy it right now.
Thanks for all the charts and comments Matt, much appreciated!
Here’s another chart. GDXJ is up 12% since the 20th and looks ready to rally. The question right now is, how much?
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=9&dy=13&id=p43374257634&a=481625016
Thanks Matthew. I’m contacting my Broker to try and get this fixed.
I trade it with the Canadian exchange but I just entered USAPF on my platform and it shows a reverse split-adjusted price of $2.41 U.S., so it looks like it’s still the symbol.
USA got smoked by it’s peers today. Ugh.
Dan, it’s just not in sync, cyclically, with the many of its peers. USA is up 18.5% since its late November low.
http://stockcharts.com/h-sc/ui?s=USA.TO&p=W&yr=2&mn=7&dy=0&id=p23749055622&a=489469576
oops, “many” should be majority
SIL is up about 3.5% from its recent low…
http://stockcharts.com/h-sc/ui?s=SIL&p=W&yr=2&mn=7&dy=0&id=p87844801649&a=496097074
b, I mentioned Bitcoin several years ago, and stated it would perform better than gold, which it has.
Nigel, No one is forcing Bitcoin on anyone. The free market is choosing it.
it has very good merits, the best being it is a deflationary currency that cannot just be created out of thin air like the $
Of course what is a mystery to me is if they are flocking to Bitcoin I’m not sure why they aren’t flocking to gold as well.
imo, which mean nutin of course, people are flocking to Bitcoin because it is time, pirates hid chests full of gold but those days could be gone.
Gold wasnt used on the Enterprize, digital was.
What I am curious about is why some nations continue to buy gold.
Maybe to back the sdr?
I still think its a 5-10% asset of a diversified portfolio.
Pirates hid stolen gold, and bitcoin the con will be stolen also.
A fool and his money are soon parted……..
I find bitcoin interesting. It has its useful applications. But serious wealth preservation is not among them.
Jim Sinclair: “Bitcoin is a virtual game that is being made look better than gold or silver, to sell the concept of a world wide virtual currency.
It should change its name to “Nintendo Virtual Foolishness,” as it’s purpose is to win the hearts and minds of a public.
After that to construct a “Dollar Index Bit Coin” backed by tickets to Mars from Space Inc. with a picture of Elon Musk.
There is no computer game that can not be hacked, and there never will be. “
Another african nightmare………..
Bitcoin will and can be hacked…..what a joke…
Anything representing money or currency can “be hacked” or degraded, or stolen.
No object (real or crypto) is immune to this, including gold.
Everything has its disadvantages.
Throughout history gold and silver have been proven to be the best form of money, and yes gold is fiat, despite the collective gasps of all the gold bugs.
But gold is fiat for the right reason.
Bitcoin is money just as gold, or tobacco, or sugar cubes could be money.
yes it could be hacked, tobacco could burn and sugar cubes could melt and gold could be stolen or shaved.
right now the free market is choosing Bitcoin.
people need to broaden their concept of what money is.
To call gold fiat demonstrates lack of understanding of word ‘fiat’.
That’s a fact, yet even Armstrong does it. There are a lot of fools out there.
Yes, definitely lots of fools. Armstrong is worse than a fool.
Agreed. I was referring to his followers.
It may or may not be the free market choosing bitcoin.
The beauty of Bitcoin is not it’s monetary value,it is the future applications of the blockchain. All those who have watched the value steadily increase with out owning any will be the ones who continually discount its worth. By the time they get their arms around the technology, the train will already have left the station.
Concerning Bitcoin and trains leaving stations, imo the train left at $2.
As far as I was concerned it had no real use until taxes could be paid with it.
Obviously some people like it, but I have no use for it.
Transfering money was one of its big advantages I could never figure out, I can go anywhere in Canada and get cash where ever there is a bank at no cost now.
Even without a bank I can use a credit card, and if a card isnt accepted would the business take Bitcoin?
I havnt found a business I do business with that does yet.
Maybe in the future but now, I have no use for it.
b:
Like I said,”The beauty is in the future technology of the blockchain.”Everytime I try explain this concept to someone,they act like homeland security is about to come throug
through the door.
GH, my lack of understanding of the word “fiat”
really?
fiat means declare it to be so, by decree, an order.
We declare gold to be money, let it be so!
Why?
Because it is the best form of money, it has all the requirements of what true money should have. So we declare it to be money.
I know perfectly well what the word means and how to use it in the context of money.
It is you who obviously doesn’t understand it.
You are starting to irritate and bore GH
Good to know I’m irritating you Mr. Dunning-Krueger.
LOL! Good one and accurate, GH!
GH, I know you want to try to get your little digs in now and then, but if you are going to try to do it with a subject you obviously know nothing about you look foolish.
Better to keep your mouth shut
You’re the fool, JTL. Pieces of paper are believed to be money only due to government force (fiat). Gold is money by nature, not by government force. It remains money whether any silly “decrees” exist or not. Otherwise, there’d be no reason to outlaw it or confiscate it as many tyrants have. They’d simply declare that it is not money and leave it at that.
Your imbecility is getting very old.
Your right JtL, fiat is “by decree” doesnt matter if thats gold or kernals of corn.
Gold does have the best propertys as money tho, imo
But currency far from NEEDS to be gold.
Matthew, first of all you obviously either don’t understand what I say or you deliberately twist my words.
Before you make silly counterpoints go back and actually understand what I said.
“Pieces of paper are believed to be money only due to government force (fiat). ”
Did I ever state anything to the contrary in my above comment? NO.
Did I ever say paper was a good form of money or defend it? NO.
Did I ever say paper has any or all of the properties that represent good money? NO.
So why do you bother to interject something I never even said?
“Gold is money by nature, not by government force.”
I made it very, very clear gold because of its properties and attributes is the best form of money. Did I not?
You think you are smart but you need to learn how to read with comprehension.
Gold is not money by nature.
Gold didn’t come into existence and scream out “Hi I’m money”
People in the course of human events used it and found out this is the best form of money we know of. Everything else we might have tried is not as good. Gold is great for money.
“Hey gold is great money”
Let it be so.
In other words by fiat, because of its intrinsic value, gold is the best form of money.
You gold bugs really have to stop thinking fiat is some dirty 4 letter word.
You also need to learn how to read with understanding.
You imbecile.
Look moron, gold became money as a result of the preferences of human beings interacting freely. That’s about as NATURAL as it gets. Government coercion (violence) had nothing to do with it. Therefore, gold is not money by fiat, it is money by nature — human nature.
When J.P. Morgan said, “money is gold, and nothing else,” he did not do so because of some damn politicians.
I don’t expect a complete idiot like yourself to grasp any of this.
b, you seem to be one of the few people on this blog now that has any common sense.
I thought what I said was pretty clear, but some people have a hard time understanding or twist what I say.
Bix Weir ,,,,,$1,000,000 bitcoin might be conservative ……..
has Bix gotten anything right in the last 10 yrs……..
Bix Weir(d) who also says gold is far more plentiful in the US due to the Grand Canyon hoard….!!!!
Look moron, what don’t you get about what I am saying? What do you have the reading comprehension of a third grader?
I understand when you attack me whe we have differences of opinions but in case you don’t get it we are basically in agreement on this.
I’m not going to repeat my position again if you are too slow to understand it
No, Mr. 80 IQ, we’re not in agreement on this. The word “fiat” does not apply to gold in any way whatsoever.
And just for the record gold is money not just because it is a “preference” as you say.
It is money because it qualifies as money better than anything else could.
But it is still fiat.
Moron
Btw, Re: “It is money because it qualifies as money better than anything else could.”
That’s nature, dumbass. Gold is not money by decree any more than a car is car by decree.
Matthew, what don’t you get dumbass?
I AM NOT SAYING IT IS BY DECREE!
Did I ever say that? NO!
What a piece of shit you are, JTL. Just above, at 6:59 pm, you said: “But it is still fiat.”
Now kindly fvck off, would you?
Despite the lies and propaganda central banks love love love digital currencies.
Once they get it in their hands they will have complete control.
All it will take is the click of a mouse to disable you from accessing your account.