Throughout the history of the world there have been thousands of currencies developed, including silver, gold and brass coins as well as paper money. With technology beginning to dominate international growth, and the need for transparency in transactions, there has been a great movement towards producing emoney as well.
The first form of digital currency to be developed was Bitcoin, from an idea proposed by Satoshi Nakamoto. Created and held electronically, this type of money is known as cryptocurrency and is based on blockchain technology. It is produced using software designed to solve mathematical problems. One of the major differences between Bitcoin and paper currency is the fact that it can’t be decentralised, meaning that no single institution would be able to control the network. The currency is created digitally by a group of people that anybody can join, and a limit has been placed on the number of Bitcoins that can be ‘mined’ in this controlled online environment. To encourage transparency, the mathematical formula which is used for Bitcoin production is available for everybody to view online.
Bitcoin’s success has inspired the creation of other forms of emoney, most notably in several African countries. After Tunisia launched their blockchain technology based currency, Senegal quickly followed suit and announced that they will be using online currency alongside their paper one. Even though created from blockchain technology, it will still be controlled and distributed by the government and central banking system. This means that the amount that is in circulation will be easily monitored and regulated. Senegal’s e-currency, known as eCFA, has already passed the emoney regulations which have been set by the West African Economic and Monetary Union and is expected to be introduced into the system shortly.
These currencies have set Africa apart as the pioneers of a new era of financial stability. The security and transparency of the blockchain technology, means that the system cannot be tampered with and the economy will be allowed to thrive. After being introduced into circulation in Senegal the eCFA will be introduced in other countries that currently use the West African franc including: Ivory Coast, Benin and Niger.
Other forms of emoney is also being explored and developed on an international level and countries are adapting the technology to suit their specific requirements including China, Singapore and Sweden. Many banks have already started using blockchain technology to record and handle transactions, and other industries which require high levels of security and monitoring are researching ways of moulding it to suit their needs.