Let Cryptocurrency Not Destroy Nigeria and the Global Economy, by ‘Tope Fasua
Most Nigerians are cynical about their country. So I hear most people asking if the country’s economy hasn’t already been destroyed. Well, my message has always been that our nation is what we make it. All these beautiful countries to which we wish to migrate are only better than Nigeria in the measure of the sacrifices, vision, hard work, pragmatism and perseverance of their people, over an extended period of time. Young Nigerians must look away from the disappointing past, take hold of their country in many ways – intellectually, in terms of productivity, reputation and others – and create the future they deserve. Some of the trends we see so far among young people – the get-rich-quick syndrome, the practice of fetishism for money, easy crimes, the predilection for gratuitous display of money and excessive lovemaking – give no indication that Nigerian youth are eager to build a critical mass large enough to positively shape their own future. It can be explained as a product of frustration. But high unemployment and poverty are one thing, while playing football with money or dancing to it in drunken sprees to show that “you have now made it” is another and is only practiced in Nigeria. We have to look within.
Since time immemorial, the average black man has seemed unwilling to accept the fact that he has to work three times as hard as anyone else to get out of the trouble he finds himself in. The task facing the growing Nigerian demands that we forget ourselves-gratification for the time being, that we abhor pleasure and embrace hard and smart work, that we focus on producing tangible goods, which even a boy or girl ten-year-old girl begins to think about her own unborn children and work for them. We must prepare to run faster than others if we are to break this cycle of oppression and need. We must understand that today’s investment will lead to tomorrow’s grace and prize. Therefore, today’s youth cannot chart the future with the same standards as those they criticize (the old). They don’t even have the luxury of engaging in destructive behaviors – like some of the ones I’ve mentioned above – on the pretext that old people have messed things up and so their own reaction is to mess things up further . If they do, we will only live in a vicious circle of misery, treated like outsiders around the world, rocked by conflicts, wars and terrorism, and parading the worst economies, while the world laughs at us privately and openly takes advantage of us. I write with deep pain in my heart. I don’t know how else to express it. There are no brownie points for the young, pointing the finger at the failures of the old – who were once young. What needs to be done is to rise up and fix the nation; and the ingredients have been listed above.
I write about young people, partly because we live in the digital age, the age of cryptography. Everywhere I turn, young people in Nigeria are being crypto-enlightened. The rhetoric from crypto merchants not only taps into the need to be smart and modern, but also the need to break away from the traditional economy…and by extension your country. The new era of finance says you could live your life in the cloud, store your money in the clouds, or at best join a virtual group of bohemians who have created – or are creating – their own financial and economic rules. By extension, it also implies that young people today have less and less usefulness for their country, and more and more resentment for this country in our own case. The Naira means less and less to today’s youth, just like Nigeria, or Ghana, or Mali, or Cameroon and their currencies. It seems quite natural to simply obey the latest trends and innovations, but is there anyone who can help us think more deeply about these questions?
While cryptocurrencies have their own uses and values, especially nowadays many young people are using stablecoins to hedge against fluctuations in the naira by retaining the liquidity they have in coins like USDT (United States Dollars Tether), and they can also much more easily transfer funds from wallet to wallet without having to go through a bank, there are serious implications for the macro economy some of which are:
1. Cryptocurrency promises are usually overhyped. To date, the market is down from a few months ago. This means that young people are subjecting their cash to unnecessary volatility. From hedging against the falling Naira with the USDT, most youngsters are becoming more adventurous. It’s like being drawn into gambling. Many have lost a lot but are usually silent when it happens. The few hype-men also speak only when there is a rise in the market.
2. As we age and the economy naturally shifts into the hands of today’s youth, economic management will be more difficult as too much local currency will be converted into crypto, even as local economic managers struggle to retain sovereignty. traditional currencies.
3. While 2 above can be seen as a fait accompli (a losing battle) as sovereigns scramble to create electronic versions of their own currencies to compete, the real challenge will be that national savings and investments will be negatively impacted. Every economy will feel the impact as more and more money flows through space, but struggling and growing economies like ours may simply collapse if more and more people see no reason to keep their savings in local banks or even invest in anything here.
4. Despite the popularity of cryptocurrencies among young people, they have failed some of the fundamental qualities of a good currency, such as being a suitable medium of exchange, a store of value, and stability.
The other day I was talking about the Nigerian stock market with high profile men and wondering why we have had very few new listings (new companies going public) since the crash of 2009. MTN was a recent big addition. It has become apparent that ‘investment’ in notional or pseudo-assets such as cryptocurrencies by today’s savvy Nigerians is direct erosion and in direct competition with the funds that might go into the market. scholarship. This means that most new listings or initial public offerings (where companies are actually raising money for expansion or otherwise), have to struggle harder to succeed. And we’re saying companies aren’t even willing to sign up. I then wondered how to grow this economy? How do you find financing for struggling or growing businesses that produce real goods and services that people actually need? Because there are not many businesses in the world that were built from the cryptocurrency revolution. But if the national economy continues to experience meltdowns, won’t that encourage people even more to convert their cash into cryptocurrencies and so we have a chicken and egg scenario, not knowing what caused what – if investments in cryptocurrencies trigger divestment everywhere else in the traditional economy, or the collapse of the traditional economy causes people to flee to crypto? The bottom line is that the traditional economy – and by extension societies, economies and nations – will descend into chaos. It’s clearly a race to the bottom for everyone. Is it something our young people envision and desire? Are we already booking entry into a dystopian world?
Will cryptocurrency lead to a global economic collapse of unprecedented magnitude? Anything worse than the Great Recession of 2009-2011? Some mainstream economists and financiers think so. Will cryptocurrencies finally liquidate economies like Nigeria’s? Just as we have now seen that the push for 100% green energy could be our albatross and impede our economic development and we have raised this issue with the UN and other bodies, who is anyone talking to cryptocurrency; currencies that simply float in the air without anyone’s backing? From a purely economic point of view, I think we need more analysis to fully understand the risks.
‘Tope Fasua, economist, author, blogger, entrepreneur and recent Presidential candidate of the Abundant Nigeria Renewal Party (ANRP), can be contacted via [email protected]
Support the integrity and credibility journalism of PREMIUM TIMES
Good journalism costs a lot of money. Yet only good journalism can guarantee the possibility of a good society, an accountable democracy and a transparent government.
For free and continued access to the best investigative journalism in the country, we ask that you consider providing modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you help sustain relevant journalism and keep it free and accessible to everyone.
Make a donation
ANNOUNCEMENT TEXT: To advertise here . Call Willie on +2347088095401…