Can Bitcoin blow up Africa's banking system? See what people are saying at Africa Bitcoin Conference in Accra

The Inaugural Africa Bitcoin Conference took place in Accra, Ghana, in December of 2022. Jack Dorsey, the CEO of Block, and his top executives were present at the event to discuss Bitcoin and its potential to disrupt and transform Africa's existing financial system.

Bitcoin has been regarded as an unfamiliar form of money since its inception in 2008. It has been alternately criticized as a complex toy for libertarian techies, a legalized form of gambling, a speculative bet to get rich quick, and a vehicle for criminals and fraudsters to conceal the origins of their ill-begotten gains. However, this parallel financial system can also serve as a tangible social good, providing an entry point into the financial system for people who would otherwise be left out.

In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a significant portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that does not require intermediaries to approve transactions can be a lifeline for survival.

As cryptocurrency continues to rise in prominence and become a growing flashpoint for regulators, Dorsey and his deputies are providing an essential counternarrative: Bitcoin brings financial power to people who would otherwise have none.

According to Mike Brock, the CEO of TBD at Block, a unit that focuses on cryptocurrency and decentralized finance, it does not matter if the price of Bitcoin goes up or down because he can still use it as a vehicle to move money around the world instantaneously. He can exchange dollars for Bitcoin and then Bitcoin for Brazilian real. Brock emphasizes that there is a market for Bitcoin in every corner of the world today.

Moving money in Africa is a complicated and costly process. Access to commercial bank branches is limited, especially for people living in remote and rural areas. Digital banking options are also limited. Moreover, hyperinflation, widespread government corruption, and capital controls that trap domestic cash in banks are prevalent, which means that money can stop making sense altogether.

According to Ray Youssef, CEO of Paxful, part of the problem is Africa's quasi-colonial payment framework, in which roughly 80% of cross-border payments originating from African banks are processed offshore, mostly in the U.S. or Europe. That translates to higher costs and processing times that are sometimes measured in weeks.

“We’re able to settle into bank accounts or mobile money accounts, without the recipients having to interact with bitcoin themselves,” Parah tells CNBC.

“Over time, we’ve seen that there are still people who really don’t understand how to use bitcoin; who don’t care about bitcoin. What they do care about is their problems getting solved,” continued Parah.

It feels like a wire transfer or a Venmo payment, according to Strike CEO Jack Mallers.

“It’s instant. There’s no debt. There’s no credit. There’s no delays,” explains Mallers.

The big question now is, can Bitcoin do any good for the African economy, can it help the banking system or will it make things worse off?